Retention Bonuses Not Compensable

Retention Bonuses Not Compensable

From time to time the ADF has introduced retention bonuses designed to address a shortfall of suitably qualified personnel.  Examples include the:

• Pilot Retention Bonus Scheme established in 1996 and involving a one-off payment of up to $120,000 to suitably qualified personnel in return for a five year commitment to serve; and
• Submariners Completion Bonus Scheme established in 1999 and involving a one-off payment of $35,000 to suitably qualified personnel in return for 2 years effective Collins Class Service.

Cases have arisen and claims been made in circumstances where injured members of the ADF would in all probability have qualified for such a bonus except for the effects of a compensable injury.  In such cases, the member will have effectively suffered a substantial financial loss.

Section 8 of the SRC Act is the appropriate provision dealing with a claim for such a loss.  It does not allow such compensation to be paid.  Essentially s 8 establishes the rate of compensation payable for a loss of earnings and gives consideration, under s 8(1), (6) and (9), to the rate of salary or wages payable to the member.

A retention bonus is a one-off lump-sum payment rather than a payment of salary or wages.  It is a capital sum given in consideration of an undertaking to give further service and does not come within the terms of s 8 .  No other section of the SRC Act has any relevant application.