Careful: the shell syntax you've written: >& filename is for C shell and its ilk. Generally, perl will use a Bourne-type shell for implementing system().

Basically, the >& file syntax in C shells is equivalent to the Bourne shell >file 2>&1 syntax others have posted here.

If you're at the stage where you need finer-grain control over redirection, error output, etc., than the simple facilities of system, consider making more use of Perl's own built-ins. You can search the CPAN for process management tools, (which are usually platform-specific, such as Win32::Process or OS2::Process), or just write your own fork/exec.