The Full Court of the Federal Court recently delivered its judgment in Bluescope Steel Ltd v The Australian Workers’ Union and Commissioner of Taxation  FCAFC 84.
The matter was on appeal from an earlier determination about the proper interpretation of ‘ordinary hours of work’ and ‘ordinary time earnings’ in the Superannuation Guarantee (Administration) Act 1992 (SGA Act).
The case concerned employees who received earnings referable to the overtime or penalty rates on public holidays that they did not necessarily work. These earnings were paid as part of an annualised or aggregate salary. The issue in the appeal was whether the clauses in the relevant instruments required the employer to make superannuation contributions referable to earnings in respect of those additional hours or penalty rates. There were particular instruments that were examined by the Court.
However, in summary, the effect of the instruments were that the:
Employees working under an annualised salary system worked up to 43.5 hours per week (38 hours plus 5.5 “additional hours”) to meet the needs of the business. The employees working under the annualised and aggregate salary systems were also rostered to work on public holidays. The employees’ annualised or aggregate salaries included payment for not only the base salary, but also the additional hours and public holidays. The essential difference between the annualised and aggregate salary is that in the former a body of additional hours (5.5 per week) is pre-paid as part of an additional hours component.
To read more analysis of this case, please log on to KPMG Tax Now.
If you are yet to register for KPMG Tax Now, please do so.
© 2020 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Liability limited by a scheme approved under Professional Standards Legislation.
KPMG International Cooperative (“KPMG International”) is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.