The question of the degree to which an employer may “set off” other matters against particular claims was relatively recently addressed by the Full Court of the Supreme Court of Western Australia in James Turner Roofing Pty Ltd v Peters  WASCA 28; (2003) 132 IR 122. Having referred, at , to the misuse of the phrase “set off”, Anderson J, Presiding Judge, said , “The term “set off” is conveniently used merely to denote a defence by the employer to the effect that the payments which he actually made to the employee were sufficient to discharge all of his obligations.”
At , his Honour continued, having referred to a number of well-known cases, including Poletti v Ecob (No. 2) (1989) 31 IR 321 (“Poletti”) to say:
o “…I think the relevant principles that are to be extracted from them can be stated as follows:
1. If no more appears than that (a) work was done; (b) the work was covered by an award; (c) a wage was paid for that work; then the whole of the amount paid can be credited against the award entitlement for the work whether it arises as ordinary time, overtime, weekend penalty rates or any other monetary entitlement under the award.
2. However, if the whole or any part of the payment is appropriated by the employer to a particular incident of employment the employer cannot later claim to have that payment applied in satisfaction of his obligation arising under some other incident of the employment. So a payment made specifically for ordinary time worked cannot be applied in satisfaction of an obligation to make a payment in respect to some other incident of employment such as overtime, holiday pay, clothing or the like even if the payment made for ordinary time was more than the amount due under the award in respect of that ordinary time.
3. Appropriation of a money payment to a particular incident of employment may be express or implied and may be by unilateral act of the employer debtor or by agreement express or implied.
4. A periodic sum paid to an employee as wages is prima facie an appropriation by the employer to all of the wages due for the period whether for ordinary time, overtime, weekend penalty rates or any other monetary entitlement in respect of the time worked. The sum is not deemed to be referable only to ordinary time worked unless specifically allocated to other obligations arising within the employer/employee relationship.
5. Each case depends on its own facts and is to be resolved according to general principles relating to contracts and to debtors and creditors………
Further, this case is a classic illustration of the situation described in Poletti v Ecob (No 2) (1989) 31 IR 321, where the Full Court held, at :
“The first situation is that in which the parties to a contract of employment have agreed that a sum or sums of money will be paid and received for specific purposes, over and above or extraneous to award entitlements. In that situation, the contract between the parties prevents the employer afterwards claiming that payments made pursuant to the contractual obligation can be relied on in satisfaction of award entitlements arising outside the agreed purpose of the payments.”
And see Bobridge v Choppair Helicopters Pty Ltd & Anor (2016) FCCA 2301 per Burchardt J