United Services Union (on behalf of Geoffrey Taylor) and MM Kembla Products [2005] NSWIRComm 223

Industrial Relations Act (General) Regulation 2001 LEGISLATION CITED: Industrial Relations Act 1996

Austeck Pty Ltd v Charalambos Atsalos [2003] NSWIRComm 290 Flaherty v Intertan Australia [2000] NSWIRComm 225 Robert Jackson and National Aboriginal Islander Skills Development Association (NAISDA) Inc [2003] NSW IRComm 118 Sportsvision Australia Pty Ltd v Tallglen Pty Ltd (1998) 44 NSWLR 103 CASES CITED: CH Magill & 1 Or v National Australia Bank Limited [2001] NSWCA 221, revised [2001] NSWCA 321 17/09/2001 Shead v Summit Western Pty Ltd t/as Blacktown Mitsubishi (1998) 81 IR 347 Kagan v Primus Telecommunications (Aust) Pty Ltd (No 2) [2000] NSWIRComm 185 Condon v G James Extrusion Company (1997) 74 IR 283 McBlane v National Transport Australia Ltd (1997) 77 IR 185

HEARING DATES: 11/25/2004; 02/25/2005; 04/22/2005

Mr C Bolger of counsel for the Appellant instructed by the United Services Union LEGAL REPRESENTATIVES:

Mr A Harding for counsel for the Respondent instructed by Toomey Pegg Drevikovsky Lawyers

• 18 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES FULL BENCH CORAM: Walton J Vice President Grayson DP McLeay C

New South Wales Local Government, Clerical, Administrative, Energy, Airlines and Utilities Union (on behalf of Geoffrey Taylor) and MM Kembla Products

Application by New South Wales Local Government, Clerical, Administrative, Energy, Airlines and Utilities Union on behalf of its member Geoffrey Taylor for leave to appeal and appeal against the decision of the Commission given on 2.9.2004 in matter no. IRC 6001 of 2003

1 The New South Wales Local Government, Clerical, Administrative, Energy, Airlines and Utilities Union (on behalf of Geoffrey Taylor) seeks leave to appeal and if leave be granted, appeals pursuant to s 187 of the Industrial Relations Act 1996 from a decision of O'Neill C given on 2 September 2004. The appeal initially challenged the Commissioner's decision as to the proper construction of the MM Kembla Products (Clerical and Administrative Employees) Enterprise Award which was on the appellant's case below, the industrial instrument which set Mr Taylor's conditions of employment. The Commissioner found that the award properly construed did not apply to Mr Taylor and on the basis not disputed at first instance, that Mr Taylor's annual remuneration for the purpose of s 83 (1) (b) of the Act was greater than the amount of $85400 prescribed by clause 5 (1) of the Industrial Relations Act (General) Regulation 2001, dismissed his application for relief from alleged unfair dismissal for want of jurisdiction. 2 When the matter came on for hearing before the Full Bench on 25 November 2004, the appellant sought and with considerable reluctance on the part of the Full Bench, was permitted to amend the appeal application to raise the issue not raised below namely, the issue of annual remuneration. The matter then went over to a later date for argument and on 25 February 2005 in its ex tempore decision (see [2005] NSWIRComm 64) leave to appeal in relation to all matters other than annual remuneration was refused by the Full Bench; fresh evidence was admitted pursuant to s 191 (2) of the Act and a programme was fixed for the filing of written submissions with which this decision now deals. 3 During the course of argument on the questions of leave on 25 February 2005 the attention of the parties was drawn to the Full Bench decision in Austeck Pty Ltd v Charalambos Atsalos [2003] NSWIRComm 290. As neither party had addressed or considered Austeck and its ramifications for the questions raised in the appeal as amended, the parties were afforded the opportunity to file further submissions. That has now been done. 4 The questions said by the appellant to be raised in the appeal are relevantly as follows:-

1. The meaning of "annual remuneration" in terms of s83(1)(b) of the Act.
2. Whether payments made by an employer to "top up" a superannuation fund which guarantees to beneficiaries, which are also employees, a minimum return on invested funds should be included in the calculation of an employee's "annual remuneration" for the purpose of s83(1)(b) of the Act.
3. Whether the superannuation "top up" payments said to have been made by the Respondent in respect of Geoffrey Taylor for the financial year ending 2003 should be included as part of his "annual remuneration" for the purpose of s83(1)(b) of the Act.
4. The failure by the Commission to consider whether, as a matter of principle, the said "top up" payment should have been included in Geoffrey Taylor's annual remuneration for the purposes of s83(1)(b) of the Act.
5. The prejudgement by the Commission of Geoffrey Taylor's "annual remuneration" for the purposes of s83(1)(b) of the Act.
6. Whether there was sufficient evidence before the Commission to properly determine the question of jurisdiction and whether Geoffrey Taylor's "annual remuneration" for the of s83(1)(b) of the Act exceeded the sum fixed by the Regulations.
7. The relationship between general payments to employer sponsored superannuation funds and the remuneration of a specific employee's "annual remuneration" for the purposes of s83(1)(b) of the Act.
8. Whether the Appellant should be allowed to adduce further evidence as to the nature of superannuation "top up" payments alleged to have been made by the employer.
9. Such other questions as identified by the Honourable Commission in considering the Appeal. 5 Without limiting the scope of the questions set out above we agree with Mr Harding of counsel for the respondent and as much is clear from the submissions of Mr Bolger of counsel for the appellant that the issues to be determined can be conveniently summarised in the following way:- Firstly, are contributions by an employer to an employee's superannuation fund upon the fund failing to achieve a specified minimum return, at the level required to put the fund in the same position " as if " the minimum return had been achieved, properly to be characterised as " remuneration " for the purposes of determining whether or not an employee falls within the jurisdictional exclusion in of s83(1)(b) of the Industrial Relations Act (1996)? Secondly, and if the answer to question 1 is in the affirmative, should the contributions be excluded from the calculation of " annual remuneration " for the purposes of s83(1)(b) if, at the time the employment is terminated:

1. An obligation on the part of the employer to make a "top up" contribution has not yet crystallised; and
2. It is not possible at that time to ascertain whether or not the employer would have become subject to such an obligation (by reason of under performance of the fund) had the employee remained in employment for the financial year in question? 6 The operation of the Metal Manufacturers Group Superannuation Plan as it applied to Mr Taylor provides the factual background to the legal issues in dispute. 7 When Mr Taylor had completed his probationary period at Metal Manufacturers Limited, he was required to join the Metal Manufacturers Staff Provident Fund. Mr Taylor nominated the defined benefit investment option, which effectively guaranteed the rate of interest he received on his superannuation investment at 5%. The management of the Fund was governed by the Metal Manufacturers Staff Provident Fund Trust Deed (which was amended from time to time). The relevant clause of the Trust Deed dated 30 June 1992 (replicated verbatim in the Trust Deed dated 30 June) provided: INVESTMENT OF FUND 1.12 Investment Powers and Minimum Return ... 1.12.5 Minimum Returns

If in any year ended 30 June the Determined Rate is less than five (5) per centum per annum the Company and the Affiliated Companies between them shall pay to the Fund as soon as convenient after the close of that year the amount necessary to increase that rate to five (5) per centum per annum in respect of those persons who were Members on 30 June 1992. "Determined Rate" means an annual rate of interest determined in accordance with any applicable requirement of the Relevant Law as follows - (a) four and one-half per centum (4½%) per annum in each financial year to 30 June 1986 and in the period 1 July 1986 to 31 March 1987; (b) following 30 June 1987, a rate declared by the Trustees on the advice of an Actuary appointed by them to apply to the period 1 April 1987 to 30 June 1987, having regard to the investment earnings of the Fund during that period; (c) following each subsequent 30 June, a rate declared by the Trustees on the advice of an Actuary appointed by them to apply to the financial year ending on that 30 June, having regard to the investment earnings of the Fund during that financial year PROVIDED THAT in respect of persons who were Members on 30 June 1992 the Determined Rate shall not be less than 5% (d) for the purposes of calculating benefits under this Deed, an interim rate determined by the Trustees on the advice of an Actuary appointed by them to apply from the end of the most recent period in respect of which a rate has been declared under (b) or (c) above, having regard to the best estimate of the investment earnings of the Fund since the end of that period. 8 From 30 March 2001 the management of the Fund was transferred, by way of agreement, to William M Mercer Pty Ltd. From that date, the rate of Mr Taylor's superannuation investment return was guaranteed by clause 2.5 of the Participation Agreement between Mercer Retirement Trust and Metal Manufacturers Limited: 2.5 MINIMUM EARNING RATE 2.5.1 The investment earning credited to the Member Account of an Eligible Previous Fund Member for a financial year may not be less that 5% of the member Account Balance of that Member on the last day of the financial year excluding investment earnings that would otherwise be allocated (by whatever means) for that period and taking into account the timing of payments and receipts during this year. 2.5.2 If the effect of clause 2.5.1 is to require an additional payment to be made to the Member Account of an Eligible Previous Fund Member that is not otherwise available to be met out of investment earnings for that Member, the Trustee shall advise that Member's Employer of the amount required for payment. 9 We state at the outset that this case turns on very particular circumstances. As the Full Bench noted in Austeck, the question of whether an applicant's annual remuneration exceeds the prescribed amount is essentially a question of fact to be determined according to the circumstances of each case and having regard to the purpose of s83(1)(b). When Mr Taylor's employment was terminated, there were only fourteen "Eligible Previous Fund Members" to whom clause 2.5 applied. Mr Shan Murphy of Mercer Human Resource Consulting Pty Ltd (a corporate authorised representative of Mercer Investment Nominees Limited) advised the respondent's financial controller, Mr Chris Tobin, that in his experience the guaranteed interest rate was unique: he was not aware of any other plan in the Mercer Super Trust with a similar feature. We note that the most common type of superannuation funds are accumulated contributions funds. But for the issues relating to the application of Austeck, leave may well have been refused. 10 It may be seen from the clauses extracted above that in years where the superannuation fund earnings are 5 per cent or greater than 5 per cent, no employer "top up" is required and this was the case it would seem from 1992 to 2001. Although the characterisation of such payments as "top-ups" is, to an extent, misleading (it was really an adjustment where the investment return was insufficient, depending upon how the Fund operated in practice) we will use the expression as it was used throughout this matter by both parties. 11 Conversely, in years where the fund does not perform and the annual return is less than 5 per cent, as it was in the financial years ending 2002 and 2003, the employer upon advice from the trustee as to the amount, is required to make up the shortfall by means of the so-called "top up" payment. In the financial year ended 2002, the fund returned negative earnings of 3.1 per cent and the "top up" payment to Mr Taylor's account was $30048.71. In the financial year ended 2003 the fund again returned negative earnings, this time 0.7 per cent and the "top up" payment (made in July 2003) was $22320.91. However, Mr Taylor's employment was terminated in the financial year ending 2004. When Mr Taylor received his superannuation payment upon termination, no "top up" was required, or made under the Deed or his contract of employment. It is the payment relating to the financial year ended 2003 that is central to the controversy here. 12 If that amount is included in the calculation of Mr Taylor's annual remuneration, then the annual remuneration is greater than the amount of $85400 relevantly prescribed by the Industrial Relations (General) Regulation 2001 for the purposes of s83(1)(b) of the Industrial Relations Act 1996 and Mr Taylor being award-free is exempted from the unfair dismissal jurisdiction. CONSIDERATION 13 We shall discuss the following two issues in turn: whether the "top-up" payment of $22,320.91 should be included in the calculation of Mr Taylor's "annual remuneration"; and, more generally, whether such payments in this case could properly be described as "remuneration" within the meaning of s 83(1)(b) of the Act. 14 The Full Bench in Austeck considered the following question (in the context of the annual salary of the applicant in that case): "in determining an employee's annual remuneration, should it be done on the basis of actual remuneration earned by the employee in the 12 months preceding termination of the employment" [41] 15 In determining that question the Full Bench in Austeck said at [45]:- We consider that a reference to "annual remuneration", in the literal sense of that expression, is at odds with an interpretation that favours looking at what the applicant earned in the 12 months preceding termination of employment. We consider that the expression " annual remuneration" should be construed as the rate of remuneration fixed by the contract of employment at the point of termination. The word 'annual', in the context in which it appears, conditions the word remuneration so that the expression 'annual remuneration' is given the meaning - the rate actually fixed as the contractual yearly remuneration.

At [47] and 48]:- The purpose of s83(1)(b) is to exclude certain employees from seeking relief for unfair dismissal under Ch 2 Pt 6 of the Act. Parliament has determined that employees whose conditions of employment are not set by an industrial instrument and whose annual remuneration is greater than the prescribed amount should not have access to the relatively inexpensive, quick and informal mechanisms for resolving such complaints; that they should press their complaints in the ordinary courts. Where a jurisdictional objection is taken, the Commission is required to make an assessment as to whether or not a particular applicant is excluded by virtue of s83(1)(b) by reference to his or her annual remuneration. The Commission's task is not to determine what the applicant earned during the 12 months preceding his or her termination of employment but rather whether or not the applicant's annual remuneration was greater than the prescribed amount.

In other words, an inquiry as to what an applicant actually earned in the 12 months preceding termination is misdirected. It is also the case that if one were to take that approach literally, an employee who had not been employed for the whole of that period, or who may have been absent on leave without pay for the whole or part of the period under consideration, would be disadvantaged. It would also mean, for example, that an employee whose annual remuneration was $100,000 made up of $40,000 base salary and $60,000 in commission but who had not received the commission payments at the time of termination because of the nature of the commission scheme, but who was owed such payments, would attract the Commission's unfair dismissal jurisdiction. We do not consider that such an outcome was intended by the Legislature.

And at [51] and [52]:- The question of whether an applicant's annual remuneration is greater than the prescribed amount is essentially a question of fact to be determined according to the circumstances of each case and having regard to the purpose of s83(1)(b). The inquiry would inevitably focus on the terms of the applicant's contract of employment. That is, it would be necessary to look to the applicant's contract of employment to determine what the applicant was entitled to in terms of remuneration (as opposed to what he or she might have been paid), to annualise the remuneration if necessary, and compare the outcome to the prescribed amount.

Further, we consider that the point in time at which to determine an applicant's annual remuneration is at the time of termination. This must be so because in assessing whether the annual remuneration is greater than the prescribed amount, the prescribed amount is that which applies at the time of termination. This follows from cl5(2) and (3) of the Regulation. 16 Mr Bolger for the appellant submitted that, in the light of Austeck, the Commission's task is not to determine what was earned during the 12 months preceding termination but rather whether the annual remuneration was greater than the prescribed amount. The appellant contended by reference to Austeck that annual remuneration calculated at the time of termination would necessarily have regard to what an employee was entitled to in terms of the contract of employment as opposed to what may have been in fact paid. 17 Mr Bolger further submitted that the contractual obligation to make "top up" superannuation payments at the time of Mr Taylor's dismissal in October 2003 would not arise or could not have existed because the fund performance for that financial year would not be measured until the end of the financial year as at 30 June 2004. There was no evidence upon which to found a conclusion that the fund was underperforming at the time of dismissal and that Mr Taylor was therefore entitled to a "top up" payment for that financial year. In fact, on the further evidence adduced the contrary applies as the investment return for the financial year ended 30 June 2004 was 13.2 per cent. Accordingly, the value of Mr Taylor's entitlement to a "top up" payment for the financial year in which his employment ceased was nil. 18 Mr Bolger for the appellant contended that the "top up" payment made to Mr Taylor's credit for the financial year ended 30 June 2003 should therefore be excluded from the determination of his annual remuneration in consequence of which, the application for relief from unfair dismissal is within jurisdiction. 19 As to the application of the principles in Austeck the respondent submitted as follows:-

1. The principles provide valuable guidance in the calculation of wages, salary, fixed percentage superannuation contributions and other benefits which can be readily identified and measured from the contract of employment at the point of termination. Austeck itself was concerned with the quantification of the applicant's annual salary;
2. Also in this category are commission payments which are owed but unpaid at the point of termination. The Full Bench in Austeck recognised these amounts should be included in the calculation of annual remuneration although its comments in this regard were strictly obiter dicta (see [48], [55]);
3. Austeck did not deal directly with the treatment to be given to contractual entitlements such as bonuses, commissions and superannuation "top up" arrangements in the present case, in circumstances where, at the point of termination: · there is no present entitlement to payment; · it is impossible to know: (i) whether or not an entitlement to payment would have arisen had the employee remained in employment (for example, upon the occurrence or non occurrence of certain future events); and (ii) if an entitlement to payment would have arisen, the quantum of the entitlement; 4 . There is no sensible reason for excluding such payments from the calculation of annual remuneration simply on the basis that, at the date of termination, they happen not to have accrued. Such a result would produce anomalous and arbitrary consequences and would be inconsistent with the purpose for which s 83(1)(b) was intended: (i) payments in the nature of bonuses, commissions or superannuation " top ups " could only be counted towards annual remuneration if the termination of employment took place in the window between the date of those payments becoming payable and the date of payment (however long or short that period may be); (ii) the Commission's jurisdiction in relation to a particular employee would therefore be liable to " rise and fall " with the timing of payments - rising when a payment obligation was accrued but unpaid, and falling when payment occurred; (iii) it would produce different results for employees on identical packages, depending on the date on which a particular employee ceased employment; (iv) in the case of employees for whom commissions and bonuses make up a large part of their remuneration but who have no accrued entitlement to payment at the date of termination, it would mean that their entitlement to access the unfair dismissal jurisdiction would be adjudged by reference to an artificially low reading of " annual remuneration ". 5 . In respect of the types of payments identified at 3. above (and only those payments), the logical measure to adopt in quantifying them for the purpose of calculating " annual remuneration " is to include the actual payments received over the 12 month period prior to termination. It is submitted this is the correct approach. Grayson DP adopted this approach in relation to bonuses in Flaherty v Intertan Australia Ltd [2000] NSWIRComm 225, a decision not overturned by the Full Bench in Austeck . To the extent that Austeck may currently warrant some other approach (and this may be doubted since the issue of contingent payments did not directly arise in Austeck ), the respondent respectfully invites the Full Bench to revisit the principle in Austeck noted in 2. above to accommodate payments comprehended by a contract of employment but uncrystallised at the point of termination. 20 We agree with the broad thrust of the respondent's first four submissions outlined above. Austeck specifically left open the manner in which the Commission should approach benefits to which there was no entitlement at termination to a specific sum in the context of s 83(1)(b). We also agree that it would be inappropriate (and contrary to authority) to exclude such payments from the calculation of "annual remuneration" simply because, at the date of termination, they happen not to have accrued. Nor, we might add, should they be excluded simply on the basis that calculation of their monetary value proves difficult. 21 In this case, we think the better view is that Mr Taylor had an uninterrupted entitlement to interest at the rate of 5% on his superannuation investment, and that the employer's obligations in order to maintain that rate of return were assessed at the end of each financial year, based on the investment earnings credited to his Member Account for that financial year. In some years (such as from 1992 - 2001), the employer's obligations were nil. 22 We disagree with the respondent's final submission as to how such entitlements should be calculated, both in this case, and as a matter of general principle. We prefer the approach of the Full Bench in Austeck - cases of this nature must be decided according to the circumstances of each case. It would be unhelpful to prescribe a set method of calculating all annual remuneration which cannot be readily identified and measured from the contract of employment (such as wages, salary, fixed percentage superannuation contributions etc) when it is clear that such remuneration can take so many forms: see, for example, the discussion by Sams DP in Robert Jackson v National Aboriginal Islander Skills Development Association (NAISDA) Inc [2003] NSWIRComm 118 regarding credit card reward points which were converted to frequent flyer points. 23 In this case, we will with respect adopt and conform to the principles discussed in Austeck. In that light we can determine the rate of remuneration at the date of termination: we know, that for the financial year ended 30 June 2004, the value of Mr Taylor's entitlement to a "top up" payment was nil. It may be, as the respondent suggested, that in some cases the appropriate manner in which to calculate components of annual remuneration will be to refer to actual payments received over the 12 month period prior to termination. Indeed, the Full Bench in Austeck appears to have left open this very possibility. However, there is nothing in the Deed or employment contract to suggest that this is such a case. Accordingly, it is not necessary to refer to the financial year preceding the termination of Mr Taylor's employment, nor to include the payment of $22, 230.91 made in relation to that year in the calculation of Mr Taylor's annual remuneration for the purpose of s 83(1)(b). 24 We do not consider that Flaherty, decided as it was before Austeck, and turning as it did upon its own particular facts (including close analysis of the employer's obligations pursuant to the employment contract), assists us in our determination of this case. 25 It follows from the foregoing discussion that we reject the respondent's submissions as to the irrelevance of evidence concerning the Fund's performance after the termination of Mr Taylor's employment. It is not to the point that post-contractual conduct is inadmissible to aid in the construction of a contract (as noted in Sportsvision Australia Pty Ltd v Tallglen Pty Ltd (1998) 44 NSWLR 103 at 116; C H Magill & 1 Or v National Australia Bank Limited [2001] NSWCA 221; revised [2001] NSWCA 321 17/09/2001 90-131). Such a narrow approach is neither warranted nor justified. The Commission's task in determining the value of Mr Taylor's annual remuneration, is not restricted to contractual interpretation, but also involves statutory interpretation on matters of jurisdiction and an examination of the operation of the contract of employment and of the Deed. 26 For the reasons described above, we agree with the appellant that the "top up" payment of $22, 230.91 should not be included in the calculation of Mr Taylor's annual remuneration. Indeed, as we discuss below, we have real reservations as to whether such top-up payments should be properly described as "remuneration". 27 It is well settled that in the context of Part 6 of Chapter 2 of the Act, Unfair Dismissals, the meaning of "annual remuneration" is not confined to cash benefits or salary, but is to be construed in its ordinary broad sense as comprehending an employee's total package as a reward for work performed (see for example Shead v Summit Western Pty Ltd t/as Blacktown Mitsubishi (1998) 81 IR 347; Kagan v Primus Telecommunications (Aust) Pty Ltd (No 2) [2000] NSWIRComm 185). 28 Mr Harding for the respondent contends and correctly in our view that whilst the term "annual remuneration" in its ordinary broad sense (Shead's case) should not be construed so widely that it is given an operation beyond its wide meaning (Kagan), it has been held to be sufficiently broad to encompass superannuation contributions by an employer whether by way of statutory obligations or contributions beyond those required by legislation (see for example Condon v G James Extrusion Company (1997) 74 IR 283; McBlane v National Transport Australia Ltd (1997) 77 IR 185). 29 It is worthwhile reviewing the Full Bench's discussion in Kagan referred to above in its entirety: 11 The extracts from the judgments in Shead v Summit Western Pty Ltd t/a Blacktown Mitsubishi and Higgins v Prospect County Council demonstrate that, although the word "remuneration" is to be construed relevantly as having a wide meaning and operation, it should not be construed so widely that it is given an operation beyond its wide meaning. For example, if money be received over and above what is reasonably considered consideration for the employee providing his services to the employer, then such moneys would not be considered to be remuneration, or part of the remuneration paid or payable to the employee. Although the ordinary meaning of the word "remuneration" is not confined to cash benefits, nevertheless it must involve the notion or concept of payment for services rendered or work done. Further, although in some circumstances, as considered by Kearney J, remuneration may include gratuitous payments which may not be strictly contractual entitlements, nevertheless they must be payments which are referable to or arise from the performance of work, the provision of services or the carrying out of the duties of employment. To take a simple example, if money is paid by way of a mileage or per kilometre allowance to an employee for the use of a motor vehicle in the course of employment, such payment would not be considered to be remuneration; nor would payment referable to, for example, a meal allowance provided in conjunction with the need to take a meal during the working of overtime. 30 Clearly, remuneration must involve the notion or concept of payment for services rendered or work done. In both Kagan and Austeck the Full Bench has focussed on the importance of an employee's entitlements under their contract of employment (although we note the reference in Kagan to gratuitous payments which may not be strictly contractual entitlements). In Austeck (at [51]) the Full Bench stated that an inquiry as to an applicant's annual remuneration would inevitably focus on the terms of the applicant's contract of employment. In McBlane v National Transport Australia Ltd itself, Harrison DP held (and we agree) that "in this case superannuation is clearly and positively part of the contract of employment from the outset" and should therefore be included in the calculation of "annual remuneration" for the purposes of s 83(1)(b) of the Act. 31 In the present case, the respondent submitted that the "top up" payments can properly be characterised as a benefit in the form of consideration for the employee providing services to the employer (Kagan at [11]) in that:-
4. they were superannuation contributions paid by an employer on behalf of an employee;
5. they were an employee "benefit" (Szczepanowski 14/2/05, annexure B, Recital B) available to the applicant solely as a result of his employment with the respondent;
6. when Mr Taylor left employment with the respondent his entitlement to all employer superannuation contributions, including "top up" benefit, ceased;
7. the applicant was aware of his entitlement to the benefit. It appears from the evidence that he and other employees were provided with a copy of the 1992 and 1995 trust deeds and, when the change in funds occurred in 2001, documentation explaining the effect of the changes, including that the "top up" benefit would remain if employees elected to remain in the defined benefits part of the fund (which the applicant chose to do);
8. in making the payments, no element of discretion was involved. The payments were not gratuitous payments made "out of the blue" and "without any prior reference, consultation or notice to the applicant in these proceedings" (cf. McBlane at 190). Rather, they were payments made in favour of the applicant pursuant to definitive contractual arrangements known to the applicant and which benefited him; and
9. the fact the trigger for the payments, and the size of the payments, depended on external factors such as the performance of the superannuation fund does not detract from the essential quality of the payments as employer superannuation contributions "beyond those required by the legislation" (Condon at 287). External factors commonly impact on the nature and quantum of employee benefits. For example, Commonwealth superannuation guarantee legislation directly affects employer superannuation contributions and bonus payments are often subject to factors outside the scope of the employment relationship such as prevailing economic or industry conditions or the financial performance of a group of companies in which an employer is a member. 32 Without needing to decide the matter, we note that we have some doubts as to the respondent's characterisation of the "top up" payments as "superannuation contributions". From our analysis of the Trust Deeds and the Participation Agreement, the payments were not made as primary contributions to the Fund by an employer, but rather took the form of a guaranteed interest rate for Fund members of a particular class (those who had been members since July 1992). The fact that the employer's obligation to make "top up" payments arose from the Trust Deed following advice from an actuary appointed by the trustees (and later from the Participation Agreement) - ie the legal framework for management of the superannuation fund - reinforces the notion that the payments were related to an investment relationship, and were concerned with maintaining the investment level of the fund, rather than being payment to individual employees for services rendered or work done. This is also supported by the fact that, more often than not, "top up" payments were not made. In our view, the reference in Condon v G James Extrusion Company to superannuation contributions "beyond those required by the legislation" envisaged original contributions to the employee's superannuation fund, such as for example contributions equal to 10% of the employee's salary when the legislation only required 9%. Such contributions would clearly be referable to services rendered or work done or to the contract of employment. Although we recognise that there is a fine line between "top up" payments of this nature made by an employer in a defined benefits superannuation fund and payments which would typically be described as "employer contributions" (to distinguish them from employee contributions), we feel that there may be an appreciable distinction for the purposes of s 83(1)(b) of the Act. 33 In conclusion, the "top up" payment of $22,230.91 relating to the financial year ended 2003 should not be included in the calculation of the applicant's annual remuneration for the purposes of s 83(1)(b) of the Act. Accordingly, the applicant's annual remuneration did not exceed the threshold of $85, 400 prescribed by the clause 5 (1) of the Industrial Relations (General) Regulation 2001. 34 We make the following orders:

1. Appeal upheld and the decision of O'Neill C given on 2 September 2004 is set aside.

2. Matter number IRC 6001 of 2003 be referred back to O'Neill C before whom it should proceed to conciliation and if necessary, hearing.

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