The following general performance objectives apply to all participants in the Program:

1. Maintain or exceed your current personal performance levels.

2. Continue to demonstrate the EnerMech values and leadership competencies at a level appropriate for your role.

3. Conduct yourself, to the reasonable satisfaction of the Company, in accordance with EnerMech's policies and procedures.

4. Abide by the EnerMech code of Business Conduct at all times.

5. Fully engage and support the delivery of the 2024 budget.

Further specific performance objectives may be provided to you through the central program management office, and objective setting sessions held between the senior leadership team of the Company, the Board, and their appointed advisors. These objectives will be confirmed no later than 30th April 2024 and may be amended from time to time."

• [11] The Respondent submitted that the parameters upon which the Retention Payment would be paid to Mr Duffy were within his control and would be considered the ordinary requirements for ongoing employment. The Respondent submitted that the eligibility criteria in the Retention Letter did not include any materially new obligations, nor did they impose any heightened or exceptional performance benchmarks.

• [12] The Respondent submitted that including the additional retention payments in the annual earnings was consistent with s.332 of the Act and cited, paragraph [1327] of the explanatory memorandum of the Fair Work Bill 2008 (Cth) which outlined:

"1327. An employee's earnings do not include payments for which a is not ascertainable in advance (such as variable performance bonuses). This means that payments made, but which were not anticipated or agreed to in advance (either because the type of payment was not anticipated, or the value of the payment was not agreed), will not be included. A legislative note provides examples of payments that cannot be determined in advance. These payments include overtime (unless the overtime is guaranteed), commissions and incentive-based payments and bonuses."

• [13] The Respondent submitted that if the $23,077.31 (AUD Equivalent) in retention payments were accepted in addition to undisputed base salary and allowances, then the total annual remuneration (excluding superannuation) for the Applicant at the time of his termination was $191,533.36. The high-income threshold for the 2024-2025 financial year was $175,000 (excluding superannuation) gross per annum.

• [14] The Applicant submitted that while he completed the conditions for the retention payment, given the non-guaranteed nature of this bonus and the fact that it was tied to a fixed term, the retention payments should not be considered as part of his annual remuneration for the purpose of determining eligibility for an unfair dismissal claim.

• [15] As stated above it is not in dispute, and I accept that the Applicant was not covered by a Modern Award or Enterprise Agreement. Section 332(2)(a) provides that an employee's earnings do not include "payments the amount of which cannot be determined in advance." The legislative note under s.332(2) refers to "commissions, incentive based payments and bonuses...".

• [16] It is apparent from the submissions filed, that the payment of the Retention Payment was contingent on the Applicant maintaining or exceeding levels of performance and proficiency in the skills required to complete his job activities. It appears from the documentation, his success or failure in that regard would ultimately be determined, to some extent, at the discretion of the Respondent.

• [17] The requirements included that he had to maintain or exceed his current personal performance levels, continue to demonstrate the EnerMech values and leadership competencies at a level appropriate for his role, to conduct himself to the reasonable satisfaction of the Company, in accordance with EnerMech's policies and procedures, abide by the EnerMech code of Business Conduct at all times and fully engage and support the delivery of the 2024 budget.

• [18] The payment of the Retention Payment was also contingent on the Respondent reserving the right to provide to the Applicant further specific performance objectives, through the central program management office, and objective setting sessions held between the senior leadership team of the Company, the Board, and their appointed advisors. The objectives to be confirmed no later than 30 April 2024 and may be amended from time to time. It is clear from the language attached to the Retention Payment that the Respondent reserved the right to modify the arrangements that may be required to be met in order to receive the Retention Payment. In the circumstances, despite there being a formula for the Retention Payment, it is not a payment the amount of which can be determined in advance, because the amount payable is contingent on certain things happening which are not certain.

• [19] On the basis of the submissions, it is clear that when the Retention Payment is excluded, the Applicant's earnings do not exceed the high income threshold.

For the reasons set out above, the jurisdictional objection that the Applicant's earnings exceeded the high income threshold at the time of termination of $175,000 is dismissed. The matter will be listed for further directions.

[1] Retention Letter dated 24 March 2025.

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