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ARTICLE · 28 NOVEMBER 2007

Annual Leave And Commission Payments - What Is Your Liability?

A recent case has found that payments in lieu of accrued but untaken annual leave made to an award-free employee earning regular commission in New South Wales, and who was employed immediately prior to Work Choices, must include commission, and not be calculated on base pay alone

AustraliaEmployment and HR
Pamela Flynn
Pamela Flynn
Sheila Barry
Sheila Barry

A recent case has found that payments in lieu of accrued but untaken annual leave made to an award-free employee earning regular commission in New South Wales, and who was employed immediately prior to Work Choices, must include commission, and not be calculated on base pay alone (Brad Mason v Citigroup Pty Limited 5509/06).

Key Facts

  • Mr Mason was employed in November 2001. His contract of employment stated "You are entitled to annual leave and long service leave in accordance with the legislation." The relevant legislation when Mr Mason commenced employment was the Annual Holidays Act 1944 (NSW) (AH Act).
  • T he AH Act provides for calculation of annual leave payments based on "ordinary pay". Ordinary pay includes bonus and incentive payments for employees with a base salary of $144,000 or less.
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