Breach of employment contracts in the federal courts

It would come as a surprise I am sure to those who were responsible for the concept of federal courts in Australia that the Federal Circuit Court has jurisdiction to deal with a breach of contract claim between an employer and an employee in the complete absence of an anchoring federal law context, such as misleading and deceptive conduct by a corporation. But that is how it now is, at least in so far as contractual bonuses are concerned.

“Small claims jurisdiction

  1. This claim is brought in the court’s small claims jurisdiction pursuant to section 548 of the FW Act.  Small claims proceedings can only be dealt with if:
  1. a)           an applicant indicates they wish to have their matter dealt with as a small claim; and
  2. b)           importantly, the claim relates to an amount referred to in section 548(1A) of the FW Act that an employer was required to pay to or on behalf of an employee:
  3. i)           under the FW Act or a fair work instrument;
  4. ii)           because of a safety net contractual entitlement; or

iii)          because of an entitlement of the employee arising under section 542(1) of the FW Act.

  1. Section 542(1) of the FW Act relevantly provides:

For the purposes of this Part, a safety net contractual entitlement of a national system employer or a national system employee, as in force for time to time, also has effect as an entitlement of the employer or employee under this Act.

  1. A “safety net contractual entitlement” is defined in section 12 of the

 

FW Act to mean:

An entitlement under a contract between an employee and an employer that relates to any of the subject matters described in:

(a)          Subsection 61(2) (which deals with the National Employment Standards); or

(b)          Subsection 139(1) (which deals with modern awards).

  1. Section 139(1) of the FW Act identifies the following subject matters:
  1. a)           minimum wages … and
  2. i)           …
  3. ii)           incentive-based payments, … and bonuses;

  1. Therefore, a bonus payment, in the nature of the bonus sought by the applicant, is an amount which falls within section 548(1A) of the FW Act and can be the subject of small claims proceedings. I am satisfied that the court has the requisite jurisdiction to deal with this claim.
  1. I now turn to consider the issues raised by the applicant’s claim.

Small claims jurisdiction

  1. This claim is brought in the court’s small claims jurisdiction pursuant to section 548 of the FW Act.  Small claims proceedings can only be dealt with if:
  1. a)           an applicant indicates they wish to have their matter dealt with as a small claim; and
  2. b)           importantly, the claim relates to an amount referred to in section 548(1A) of the FW Act that an employer was required to pay to or on behalf of an employee:
  3. i)           under the FW Act or a fair work instrument;
  4. ii)           because of a safety net contractual entitlement; or

iii)          because of an entitlement of the employee arising under section 542(1) of the FW Act.

  1. Section 542(1) of the FW Act relevantly provides:

For the purposes of this Part, a safety net contractual entitlement of a national system employer or a national system employee, as in force for time to time, also has effect as an entitlement of the employer or employee under this Act.

  1. A “safety net contractual entitlement” is defined in section 12 of the

 

FW Act to mean:

An entitlement under a contract between an employee and an employer that relates to any of the subject matters described in:

(a)          Subsection 61(2) (which deals with the National Employment Standards); or

(b)          Subsection 139(1) (which deals with modern awards).

  1. Section 139(1) of the FW Act identifies the following subject matters:
  1. a)           minimum wages … and
  2. i)           …
  3. ii)           incentive-based payments, … and bonuses;

  1. Therefore, a bonus payment, in the nature of the bonus sought by the applicant, is an amount which falls within section 548(1A) of the FW Act and can be the subject of small claims proceedings. I am satisfied that the court has the requisite jurisdiction to deal with this claim.
  1. I now turn to consider the issues raised by the applicant’s claim.”

 

IERODIACONOU v CATCH.COM.AU PTY LTD (2019) FCCA 3099 1 November 2019  Mercuri J