FEDERAL COURT OF AUSTRALIA

Australian Communication Exchange Limited v Deputy Commissioner of Taxation

[2001] FCA 462

Dowsett J

26 April 2001 - Brisbane

Dowsett J. This matter concerns the obligations imposed upon employers by the Superannuation Guarantee (Administration) Act 1992 (Cth) (the SGAA). Pursuant to the SGAA, 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 paras 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% 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.

5 Clause 4.7 (concerning casual employment) is contained in Pt 4 of the Award, headed "Hours of Work, Overtime" which applies to all employees. Clause 4.1 (Hours of Work) provides:

(1)(a) Except as may otherwise be mutually agreed upon … and subject to … the exceptions hereinafter provided, the ordinary hours of work shall be an average of 38 per week, to be worked on one of the following bases:
(i) 38 hours within a work cycle not exceeding seven consecutive days; or

(ii) 76 hours within a work cycle not exceeding fourteen consecutive days; or

(iii) 114 hours within a work cycle not exceeding twenty-one consecutive days; or

(iv) 152 hours within a work cycle not exceeding twenty-eight consecutive days.

(b) The ordinary hours of work prescribed herein may be worked on not more than five consecutive days in a week, Monday to Saturday inclusive, subject to the following:
(i) Except as otherwise specifically provided herein, ordinary hours may be worked between 6.30 am to 6.30 pm on Mondays to Fridays inclusive, and between 6.30 am and 12.30 pm on Saturdays. Such spread of ordinary daily working hours may be altered as to all or a section of employees provided that there is agreement between the employer and the majority of employees involved.

(ii) Ordinary hours worked by all employees, excluding casuals, on a Saturday between the hours of 6.30 am and 12.30 pm shall be paid for at the rate of time and a-quarter.

(iii) Any arrangement of hours which includes a Saturday as ordinary hours shall be subject to agreement between the employer and the majority of employees involved.

…

(f) The ordinary hours of work prescribed herein shall not exceed 10 on any day: Provided that where the ordinary working hours are to exceed 8 on any day, the arrangement of hours shall be subject to the agreement of the employer and the majority of employees involved.

…

6 Paragraph 4.2 (Overtime) relevantly provides:

(1) Except as hereinafter provided, all work done outside or in excess of the ordinary working hours on any day shall be paid for at the rate of time and a-half for the first 3 hours and at the rate of double time for all work so performed in excess of 3 hours on any one day. Such payments shall be in addition to the actual or ordinary weekly wage paid to each employee.

…

7 Clause 4.6 deals with part-time (as opposed to full-time or casual) employment. It specifies minimum and maximum periods of employment in hours per week, that "ordinary daily hours" are to be within the spread of hours prescribed in subpara 4.1(1)(b), maximum and minimum daily hours and overtime rates for all time worked outside the spread of ordinary working hours or in excess of 8 hours in any one day, or 38 in any one week. It is difficult to avoid the conclusion that when, in para 4.7(3), the Award speaks of "time worked outside the spread of ordinary working hours" by casual employees, it is also referring to the provisions of subpara 4.1(1)(b). This leads to the conclusion that a casual employee is to be paid at the prescribed casual rate (4.7(2)), save where he or she works outside the spread of ordinary working hours as there prescribed or in excess of 8 hours in any one day, or 38 in any one week. In those cases he or she is to be paid at overtime rates, unless there has been an agreement of the kind contemplated in subpara 4.1(1)(f).

8 The definition of "ordinary time earnings" clearly applies to casual employees. The reference to "casual rates for ordinary hours of work" also indicates that a casual worker may be paid other than for "ordinary hours of work". This can only be as contemplated by para 4.7(3). In my view, the expression "ordinary time earnings" in cl 3.5 includes, in the case of a casual employee, earnings received other than for time worked outside the spread of ordinary working hours as prescribed in subpara 4.1(1)(f) or in excess of 8 hours in any one day or 38 hours in any one week.

9 As far as I can see, this determination disposes of the appeal in a way which is favourable to the applicant. I will receive submissions as to appropriate orders.