Australian Communication Exchange Limited ACN 003 044 899 v Deputy Commissioner of Taxation [2001] FCA 462

FEDERAL COURT OF AUSTRALIA

Australian Communication Exchange Limited ACN 003 044 899 v Deputy Commissioner of Taxation [2001] FCA 462 SUPERANNUATION – employer's obligations pursuant to the Superannuation Guarantee (Administration) Act 1992 (Cth) – whether superannuation guarantee charges payable for certain financial years – whether the employees' conditions of employment oblige the employer to contribute to a superannuation fund – construction of the provisions of the Clerical Employees Award (State) (Qld) – construction of the phrase "the employee's ordinary time earnings" – whether the phrase "ordinary time earnings" applies to casual employees.

WORDS & PHRASES - "ordinary time earnings" Superannuation Guarantee (Administration) Act 1992 (Cth) AUSTRALIAN COMMUNICATION EXCHANGE LIMITED ACN 003 044 899 v DEPUTY COMMISSIONER OF TAXATION Q 63 OF 2000 DOWSETT J 26 APRIL 2001 BRISBANE

IN THE FEDERAL COURT OF AUSTRALIA

QUEENSLAND DISTRICT REGISTRY Q 63 OF 2000

BETWEEN: AUSTRALIAN COMMUNICATION EXCHANGE LIMITED ACN 003 044 899

APPLICANT

AND: DEPUTY COMMISSIONER OF TAXATION

RESPONDENT

JUDGE: DOWSETT J

DATE: 26 APRIL 2001

PLACE: BRISBANE

REASONS FOR JUDGMENT 1 This matter concerns the obligations imposed upon employers by the Superannuation Guarantee (Administration) Act 1992 (Cth) (the "Act"). Pursuant to the Act, an employer may become liable to make a payment, the quantum of which will depend upon whether its employees' conditions of employment oblige it to contribute to a superannuation fund. The present applicant employs employees pursuant to the provisions of the Clerical Employees Award (State) (Qld) (the "Award"). Clause 3.5 of that award provides relevantly that: Every employer shall contribute on behalf of each eligible employee as from 20 November 1989 an amount calculated at 3% of the employee's ordinary time earnings, into an Approved Fund as defined in this clause. Each such payment of contributions shall be rounded off to the nearest ten (10) cents. 2 The presently relevant question is the meaning of the expression "the employee's ordinary time earnings" in connection with the applicant's employees, all of whom are said to be "casual" as defined in cl 4.7 of the award as follows: (1) Definition – A casual employee shall mean an employee who is engaged by the hour and who may terminate employment or be discharged at any moment without notice. (2) Rate of pay – Employees shall be paid an hourly rate by dividing the weekly rate of the appropriate classification by 38 and adding a loading of 19% thereto. (3) Hours – All time worked outside the spread of ordinary working hours or in excess of 8 in any one day or 38 in any one week shall be paid for at overtime rates except where the arrangement of hours are worked in accordance with clause 4.1(i)(f). Provided a minimum of two hours shall be paid for each engagement. 3 The reference to cl 4.1(i)(f) should be to cl 4.1(1)(f). I will use the correct reference hereafter, except when quoting from the award. Subparagraph 3.5(3)(d) provides that the expression "ordinary time earnings" shall mean: … the actual ordinary rate of pay the employee receives for ordinary hours of work including shift loading, skill allowances and supervisory allowances where applicable. The term includes any over-award payment as well as casual rates received for ordinary hours of work. Ordinary time earnings shall not include overtime, disability allowances, commission, bonuses, lump sum payments made as a consequence of the termination of employment, annual leave loading, penalty rates for public holiday work, fares and travelling time allowances or any other extraneous payments of a like nature. 4 The definition expressly includes "casual rates received for ordinary hours of work". This must be a reference to the combined effect of pars 4.7(2) and (3) pursuant to which a casual employee is to be paid at an hourly rate equal to the hourly rate payable to a full-time employee plus a 19 per cent loading, save where overtime rates apply. Paragraph 4.7(3) provides that time worked by such an employee: · outside the spread of ordinary working hours, or · in excess of 8 hours in any one day or 38 in any one week, is to be paid at overtime rates, "except where the arrangement of hours are worked in accordance with cl 4.1(i)(f)". At face value, this suggests that if a casual employee works in excess of 8 hours in any one day, or 38 in any one week, the excess hours are to be paid at overtime rates. It also follows that whatever the meaning of the expression "the spread of ordinary working hours", any time worked outside that spread is also to be paid at overtime rates.