Atwood Oceanics Australia Pty. Ltd. v. Federal Commissioner of TaxationJudges:
This is an appeal pursuant to subsec. 85(3) and sec. 81 of the Fringe Benefits Tax Assessment Act 1986 (``the Act'') against the decision of the respondent (``the Commissioner'') to disallow the applicant's objection to the Commissioner's assessment of the applicant for fringe benefits tax for the year ending 31 March 1987.
The applicant operates offshore oil drilling rigs off the coast of Australia. It pays its employees employed on those rigs an allowance for each day, or part of a day, spent offshore. The allowance is described as a ``living-away-from-home allowance''.
In April 1987 the applicant duly lodged a return under the Act which included an amount of $227,624 in respect of the ``living-away-from-home allowance'' paid by the applicant to its employees. Pursuant to sec. 72 of the Act that return was deemed to be a notice of assessment under the Act and accordingly the applicant was assessed for fringe benefits tax, inter alia, on the ``living-away-from-home allowance''.
After lodging the return the applicant lodged objections to the assessment of fringe benefits tax calculated on that return by objecting to the inclusion of the whole of the sum of $227,624 as a ``living-away-from-home allowance''.
In that objection and in its appeal, the applicant contended that the allowance paid to its employees was not a benefit made assessable to fringe benefits tax pursuant to sec. 30 of the Act.
In the relevant period the wages and conditions of employment of the applicant's employees were governed by the Oil Drilling Rig Workers' (Offshore Mobile Drilling Rigs) Award 1984 (``the award'').
According to the usual roster of employment and the terms of the award, the applicant's employees spent 168 days per year offshore and 197 days at home.
The applicant was required to provide its employees with free travel to and from the rig at the commencement and end of each work period. Payment for four hours travelling time on each journey was included in the ordinary wages payable to employees, and where necessary payment for such travelling time could be extended to up to 12 hours.
On the offshore rig employees were provided with free accommodation and ancillary benefits which included linen, toiletries, laundry and cleaning services, all meals and beverages, recreation facilities, and health care. Employees were paid a weekly allowance for safety boots and wear and tear on work clothes. In addition employees were entitled to compensation for any damage to clothing. Protective gear such as helmets, gloves and glasses were provided by the applicant.
The applicant contended that the additional living-away-from-home allowance paid pursuant to the terms of the award, was paid by the applicant in respect of particular disabilities
ATC 4811that arose out of living on an offshore oil rig such as isolation from family and usual acquaintances, lack of social amenities, isolation from community affairs, strain on family relationships, strictly regulated working and living conditions, lack of privacy, persistent noise, restricted freedom and limited recreational facilities.
The history of the award's provisions was as follows:
An allowance first appeared in the Oil Drilling Rig Workers' (Consolidated) Award 1967 (``the 1967 award''). (See 120 C.A.R. at pp. 789-790.) This award covered rig workers on both offshore and onshore rigs. Clause 9 of the 1967 award provided as follows:
``9 - SPECIAL PROVISIONS FOR OFFSHORE LOCATIONS AND ISOLATED AREAS ONSHORE
In lieu of the provisions of clause 8 the following shall apply where employees are working off-shore or in isolated areas:
- (g) Off-shore and accumulated days off allowance:
- Off-shore employees shall be paid an allowance of 17.5 cents for each hour worked. This allowance is to cover any or all disabilities associated with off-shore drilling work including disabilities associated with accumulating days off.
10 - ON-SHORE - ISOLATION AND ACCUMULATED DAYS' OFF ALLOWANCE
On-shore employees engaged on drilling sites in isolated areas where the normal amenities of town or city dwelling are not reasonably available, shall be paid an allowance of 5c for each hour worked when such work is performed on over cycles of 8 weeks or longer.''
The Oil Drilling Rig Workers' Award 1968 (``the 1968 award'') repeated those provisions.
In February 1970 the 1968 award was amended by inserting a new subcl. 9(g) as follows:
``(g) off-shore employees shall be paid for all purposes an allowance of 20 cents per hour. This allowance is to cover any and all disabilities associated with off shore drilling work including disabilities associated with accumulating days off.''
and by inserting a new cl. 10 as follows:
``10 - ONSHORE - ISOLATION AND ACCUMULATED DAYS OFF ALLOWANCE
Onshore employees engaged on drilling sites in isolated areas where the normal amenities of town or city dwelling are not reasonably available shall be paid an allowance of 10c for each hour worked when such work is performed on cycles of 6 weeks or longer.''
In the Oil Drilling Rig Workers' Award 1971 the allowance provided was as follows:
``12 - ISOLATION AND ACCUMULATED DAYS OFF ALLOWANCE
(a) On-shore employees shall be paid an allowance of $2.00 for each day or part thereof spent on site when employed on cycles of five weeks or longer on drilling sites in isolated areas. This allowance is to cover any or all disabilities associated with on-shore drilling work in isolated areas including disabilities associated with accumulating days off and lack of the normal amenities of town or city dwelling.
(b) On-shore employees other than in isolated areas as described in sub-clause (a) of this clause shall receive $1.00 per day or part thereof spent on site to cover any or all disabilities associated with on-shore drilling work.
(c) Off-shore employees shall be paid the under-mentioned allowances for each day or part thereof spent off-shore -Per day $ Cooks (including Head Cooks), Cooks' Offsiders and Camp Attendants 3.00 Other Employees 4.00
This allowance is to cover any or all disabilities associated with off-shore work including disabilities associated with accumulating days off.''
The differential rate of allowance provided in subcl. 12(c) was an acknowledgment that
ATC 4812employees working on the drilling floor or deck were subjected to conditions which did not apply to employees whose duties were mainly performed inside the living quarters. (See 141 C.A.R. 503 at p. 505.)
In the Oil Drilling Rig Workers' Award 1973 the award provision read as follows:
``9 - ISOLATION AND ACCUMULATED DAYS OF [sic] ALLOWANCE
(a) An on-shore employee shall be paid an allowance of $4.50 for each day or part thereof spent on site when employed on cycles of four weeks or longer in an isolated area.
(b) An on-shore employee shall be paid an allowance of $1.50 for each day or part thereof spent on site when employed other than in an isolated area as described in sub-clause (a) of this clause.
(c) An off-shore employee shall be paid an allowance of $4.50 for each day or part thereof spent off-shore.
(d) The above allowances are to cover the disabilities associated with isolation, accumulating days off and the lack of normal amenities of town or city dwelling.''
In the Oil Drilling Rig Workers' Award 1974 and the Oil Drilling Rig Workers' Award 1976, the clause was amended only by increasing the rate of allowance payable, but the latter award also added a new clause (cl. 8) providing a further allowance for employees on offshore rigs as follows:
``8 - SPECIAL ALLOWANCE - OFFSHORE FLOATING DRILLING RIGS
An employee who works on an offshore floating drilling rig shall be paid an allowance of $2.75 per duty day or part thereof. This allowance is in recognition of special skills and conditions encountered on such oil drilling rigs.''
The Oil Drilling Rig Workers' Award 1978 made provision for offshore and onshore workers in separate parts. In ``PART I - OFFSHORE'', cl. 9 provided as follows:
``9 - ISOLATION AND ACCUMULATED DAYS OFF ALLOWANCE
(a) Employees shall be paid an allowance of $6.50 for each day or part therof [sic] spent offshore.
(b) The above allowance is to cover the disabilities associated with isolation, accumulating days off and the lack of normal amenities of town or city dwelling.''
In addition ``Clause 7 - Wage Rates'' was amended to provide a new subcl. (b) as follows:
``(b) The above rates cover all payments for the performance of all duties for the appropriate classification and mixed functions (subject to Clause 30) necessary for the operation of the rig and the disabilities associated with the periods of duty, area of work, travelling time (subject to proviso of clause 11) and includes compensation usually paid for overtime, shift work, Saturday and Sunday and public holidays.''
The special allowance provided in cl. 8 of the preceding award was not included in the 1978 award.
In ``PART II - ONSHORE'', cl. 18 read as follows:
``18 - ISOLATION AND ACCUMULATED DAYS OFF ALLOWANCE
(a) An employee shall be paid an allowance of $6.50 for each day or part thereof spent on site when employed on cycles of four weeks or longer in an isolated area.
(b) An employee shall be paid an allowance of $2.60 for each day or part thereof spent on site when employed in an isolated area other than as described in subclause (a) of this clause.
(c) The above allowances are to cover the disabilities associated with isolation, accumulating days off and the lack of normal amenities of town or city dwelling.''
The clause which set the wage rates payable to onshore employees (cl. 17) did not contain a subclause equivalent to subcl. 7(b). Separate clauses were inserted in Pt II to provide for shift work allowances (para. 20(b)(iii)), remuneration rates for overtime (cl. 22), Saturday and Sunday work (cl. 23), and work on public holidays (subcl. 24(g), (h) and (i)).
In the Oil Drilling Rig Workers' Award 1980 (``the 1980 award'') the allowance provisions
ATC 4813included additional words of description of the nature of the allowance as follows:
``PART I - OFFSHORE
9 - ISOLATION AND ACCUMULATED DAYS OFF ALLOWANCE
(a) Employees shall be paid an allowance of $17.00 for each day or part thereof spent offshore.
(b) The above allowance is to cover the disabilities associated with isolation, accumulating days off, the lack of normal amenities of town or city dwelling, sharing accommodation and the type of facilities and living conditions available during drilling operations.''
``PART II - ONSHORE
18 - ISOLATION AND ACCUMULATED DAYS OFF ALLOWANCE
(a) An employee shall be paid an allowance of $17.00* for each day or part thereof spent on site when employed on cycles of four weeks or longer in an isolated area.
(b) An employee shall be paid an allowance of $8.50 for each day or part thereof spent on site when employed in an isolated area other than as described in subclause (a) of this clause.
(c) The above allowances are to cover the disabilities associated with isolation, accumulating days off, the lack of normal amenities of town or city dwelling, sharing accommodation and the type of facilities and living conditions available during drilling operations.''
- (* As corrected by Order of Commissioner Sweeney 258 C.A.R. 171.)
The 1980 award repeated the terms of subcl. 7(b), para. 20(b)(iii), cl. 22, 23 and subcl. 24(g), (h) and (i) of the preceding award.
In 1981 offshore and onshore drilling rig workers were covered by separate awards for the first time - the Oil Drilling Rig Workers' (Onshore) Award 1981 and the Oil Drilling Rig Workers' (Offshore) Award 1981. Clause 9 of the Oil Drilling Rig Workers' (Offshore) Award 1981 repeated the provisions of cl. 9 of the 1980 award and the Oil Drilling Rig Workers' (Onshore) Award 1981 contained subclauses equivalent to those in the 1980 award relating to onshore employees as set out above.
In 1983 the Oil Drilling Rig Workers' (Offshore) Award 1983 altered the previous cl. 9 by deleting the heading ``Isolation and Accumulated Days Off Allowance'' and replacing it with the heading ``Living-away-from-home Allowance''. Apart from an increase in the rate of allowance from $17 to $20.40, the wording of the clause remained the same.
In 1984, workers on offshore platform drilling rigs and offshore mobile drilling rigs were covered by separate awards - the Oil Drilling Rig Workers' (Offshore Mobile Drilling Rigs) Award 1984 and the Oil Drilling Rig Workers' (Offshore Platform Drilling Rigs) Award 1984. Clause 9 of the Oil Drilling Rig Workers' (Offshore Mobile Drilling Rigs) Award 1984 (``the 1984 award'') and cl. 9 of the Oil Drilling Rig Workers' (Offshore Platform Drilling Rigs) Award 1984 adopted an altered wording of the allowance which in each case read as follows:
``9 - LIVING-AWAY-FROM-HOME ALLOWANCE
An allowance of $20.40 per day for each day or part thereof spent offshore will be paid to each employee as compensation for having to live away from his normal place of residence.''
The first award to which the applicant was a respondent was the Oil Drilling Rig Workers' Award 1973. The applicant was a respondent to all relevant awards thereafter. All awards bound employees who were members of the Australian Workers' Union.
The history of the allowance set out above shows that in 1968 the allowance commenced as a payment for ``any or all'' disabilities associated with offshore drilling work, but in 1973 it was described as an allowance to cover ``the'' disabilities associated with isolation, accumulating days off and the lack of normal amenities of town or city dwelling. ``Accumulating days off'' was a common term in the allowance between 1967 to 1983 and apparently related to the inconvenience of
ATC 4814working continuous shifts during the period offshore and the inability to enjoy days off in the course of that work cycle.
Between 1973 and 1983 the terms of the awards seemed to have been designed to provide an allowance which recognised the undesirable aspects of the employment which arose out of isolation, disruption to social contacts, restricted recreation and regulated living conditions. The allowance applied automatically to offshore rig workers, but only to those workers on onshore rigs who worked a work cycle of a specified length in an isolated area. In its terms the allowance did not appear to be intended to offset additional expenses that may have been expected to have been incurred solely because of the requirement to live away from home.
In 1983 the allowance was renamed as a Living-away-from-home Allowance in place of the Isolation and Accumulated Days Off Allowance, but apart from its description the terms of the relevant clause of the award were identical to its predecessor and the amount of increase in the daily sum paid did not indicate that there had been any expansion of purpose of the award. If the clause describing the allowance had remained unchanged in the 1984 award, the purpose and ambit of the allowance would have been fairly clear, namely a disability allowance to cover the unpleasant aspects of the working conditions of offshore rig workers.
In the 1984 award the allowance clause became compressed into a single sentence which described the allowance as compensation for having to live away from the normal place of residence.
The word ``compensation'' suggests a redress of some pecuniary disadvantage but it is not limited to such a meaning. It may also be a monetary assessment of the worth of a disability. The terms of the award were not the work of parliamentary draftsmen, but apparently represented a record of a consensual arrangement made after negotiation between representatives of employers and employees. The amount of the allowance in the 1984 award remained unchanged from the amount provided in the award it superseded and, therefore, in the absence of any clear words to the contrary, there would be no reason to conclude that the relevant clause in the 1984 award was intended to do any more than its predecessor.
Until repealed by the Fringe Benefits Tax (Miscellaneous Provisions) Act 1986, sec. 51A of the Income Tax Assessment Act 1936 provided that the amount of any living-away-from-home allowance as defined in that section was an allowable deduction from the assessable income of an employee taxpayer. A living-away-from-home allowance was defined in subsec. 51A(3) as:
``... so much of any allowance or benefit paid or granted in money or otherwise as the Commissioner is satisfied is in the nature of compensation to the employee for the additional expenses (not being expenses which are allowable as a deduction under section 51) incurred by him, or which would be incurred by him if the allowance or benefit were not received, through having to live away from his usual place of abode in order to perform his duties as an employee.''
The repeal of sec. 51A applied to the year of income commencing on 1 July 1986, the date on which the assessment for fringe benefits tax commenced under the Act.
If it were suggested that the amended form of the allowance clause contained in the 1984 award was intended to attract the provisions of sec. 51A of the Income Tax Assessment Act 1936, it was significant that the clause failed to state that it was compensation for additional expenses incurred by living away from home. Describing the allowance by the title ``Living-away-from-home Allowance'' in place of the title ``Isolation and Accumulated Days Off Allowance'' and characterising the allowance as ``compensation'' may not have been sufficient to have satisfied the Commissioner that the allowance paid under the Oil Drilling Rig Workers' (Offshore Mobile Drilling Rigs) Award 1984 was a living-away-from-home allowance within the meaning of that term in sec. 51A of the Income Tax Assessment Act 1936.
Although the words of cl. 9 of the 1984 award may have introduced ambiguity as to the meaning of the clause, they may still be understood to have done no more than carry forward a longstanding meaning by short words adequate for the purpose.
The question of interpretation of cl. 9 is a matter of construction according to ordinary principles. Any understanding that parties to
ATC 4815the award may have had as to the meaning of the clause would not assist although regard must be given to the fact that the award was not the product of a professional draftsman.
As Street J. said in
Geo. A. Bond & Co. Ltd. (In Liquidation) v. McKenzie (1929) A.R. (N.S.W.) 498 at pp. 503-504:
``Now speaking generally, awards are to be interpreted as any other enactment is interpreted. They lay down the law affecting employers and employees in their relations as such, and they have to be obeyed to the same extent as any other statutory enactment. But at the same time, it must be remembered that awards are made for the various industries in the light of the customs and working conditions of each industry, and they frequently result as this award in fact did, from an agreement between parties, couched in terms intelligible to themselves but often framed without that careful attention to form and draughtsmanship which one expects to find in an Act of Parliament. I think, therefore, in construing an award, one must always be careful to avoid a too literal adherence to the strict technical meaning of words, and must view the matter broadly, and after giving consideration and weight to every part of the award, endeavour to give it a meaning consistent with the general intention of the parties to be gathered from the whole award.''
The comments of Barwick C.J. in
Reg. v. Aird; Ex parte The Australian Workers' Union (1973) 129 C.L.R. 654 at p. 659 are also apposite:
``I now turn to consider the meaning of the eligibility clause in relation to the manufacture in the batching plants of ready-mixed concrete. This is a legal question to be solved by legal considerations. But those considerations will, in relation to the present question, include any industrial meaning or usage of the words of the clause to be construed. As with all construction, the nature of the instrument in which the words appear and the purposes the instrument is evidently intended to serve or effect must be kept in mind. In this respect, it is proper, in my opinion, in the present case to acknowledge that the eligibility clause will have been drawn, more likely than not, by union officials more familiar with the practical affairs of industry than with the niceties or subtle nuances of language. The purpose of the clause is to define, in brief terms, industries or callings relevant to the representative character of the union. But, granted this generosity of approach, the question of the meaning of the words used remains a legal question.''
In the case of ambiguity it may be appropriate to look at the reasons, if any, for the decision of the Tribunal to enact the award and to look at the history of the award's provisions. (See
Pickard v. John Heine and Son Ltd. (1924) 35 C.L.R. 1 per Isaacs A.C.J. at pp. 9-10;
Knox v. Grace Brothers Holdings Ltd. (1985) 8 F.C.R. 497 at p. 505;
Professional Radio Electronics Institute of Australasia v. Qantas Airways Limited (1984) 10 I.R. 1 at pp. 3-4;
Deckers v. Minda Home Inc. (1978) 45 S.A.I.R. 69 at pp. 84-86.)
The Court was not referred to any reasons relating to the adoption of cl. 9 of the 1984 award.
The history of the provision as set out above tends to confirm that the allowance was in the nature of compensation for disabilities associated with the type of employment.
I now turn to the provisions of the Fringe Benefits Tax Assessment Act 1986.
Section 30 of the Act reads as follows:
``LIVING-AWAY-FROM-HOME ALLOWANCE BENEFITS
30 Where -
- (a) at a particular time, in respect of the employment of an employee of an employer, the employer pays an allowance to the employee; and
- (b) it would be concluded that the whole or a part of the allowance is in the nature of compensation to the employee for -
- (i) additional expenses (not being deductible expenses) incurred by the employee during a period; or
- (ii) additional expenses (not being deductible expenses) incurred by the employee, and other additional disadvantages to which the employee is subject, during a period,
ATC 4816by reason that the employee is required to live away from his or her usual place of residence in order to perform the duties of that employment,
the payment of the whole, or of the part, as the case may be, of the allowance constitutes a benefit provided by the employer to the employee at that time.''
The terms ``benefit'', ``fringe benefit'', ``living-away-from-home allowance benefit'' and ``living-away-from-home allowance fringe benefit'' are defined in subsec. 136(1) of the Act. The term ``living-away-from-home allowance fringe benefit'' means a fringe benefit that is a living-away-from-home allowance benefit. A living-away-from-home allowance benefit is a benefit referred to in sec. 30.
In the applicant's case it was not contested that the applicant had paid allowances to employees in respect of the employment of employees and that the allowance was paid for a period during which the employees were required to live away from their usual place of residence in order to perform the duties of their employment.
The question for determination on the appeal was whether the allowance was caught by the provisions of para. 30(b) of the Act.
The first requirement of para. 30(b) was that it be an allowance in respect of which ``it would be concluded'' that the allowance bore a certain quality. The paragraph did not state by whom such a conclusion would be drawn, unlike the repealed provisions of sec. 51A of the Income Tax Assessment Act 1936 where the nature of the allowance was determined according to the Commissioner's satisfaction. It was the requirement of the paragraph that the circumstances of payment of the allowance be such that a reasonable person would conclude, applying an objective view thereto, that the allowance bore the character described in the paragraph. The required character of the allowance was that it be a payment to an employee in the nature of compensation for additional expenses incurred by the employee during a period of employment, or for additional expenses so incurred and other additional disadvantages to which the employee was subject during that period by reason of the fact that the employee was required to live away from his usual place of residence. It may be accepted that the words ``other additional disadvantages'' were not intended to be restricted to disadvantageous pecuniary results.
The section applied to an allowance paid in respect of a particular period and stated that an allowance would be a benefit at the time of payment if the allowance contained the characteristics described in the section.
Consistently with the allowance being a benefit at the time of payment, the provisions of the Act were satisfied if the allowance had a general purpose of compensation rather than any direct connection between the compensation paid and the expenditure incurred by the employee demonstrated by vouching or substantiation. The section did not require the allowance to be paid as compensation. It was sufficient that in the eyes of an objective observer the allowance was in the nature of compensation to the employee.
It was also a requirement of sec. 30 that the allowance in the nature of compensation, relate to additional expenses incurred by an employee during a period, or to additional expenses incurred and additional disadvantages to which the employee was subject during a period. Consistently with the allowance being a benefit at the time of payment rather than becoming a benefit during the relevant period of the employee's employment and with the allowance being in the nature of compensation rather than compensation, the section was concerned with additional expenses and disadvantages likely to be incurred or suffered during a period rather than expenses or disadvantages actually incurred or suffered in the relevant period. In stipulating that the additional expenses and disadvantages be incurred or suffered by reason of the employee being required to live away from his or her usual place of residence to perform the duties of employment, the Act required demonstration of some causal connection between the likelihood of additional expenses and disadvantages and the requirement to live away from home for a period.
An obvious example of such additional expenses would be extra costs for food and accommodation that would not be incurred if the employee were not required to live away from home. Section 31 of the Act reduced the taxable value of the living-away-from-home allowance fringe benefit by excluding from the
ATC 4817allowance the reasonable cost of additional accommodation for the employee during the relevant period and the reasonable cost for food during the period less ordinary food expenses that would be expected to be paid by an employee in any event during that period if the employee were not living away from home. (See sec. 136: ``exempt accommodation component'', ``exempt food component'', ``food component'', ``recipients allowance'' and ``recipients allowance period''.)
Those provisions demonstrated that the legislation anticipated that the allowance would have calculable components such as those related to possible additional costs for food and accommodation. In other words, the allowance would have some clear connection with likely additional expenditure.
The circumstances in which the applicant's employees were required to live away from home for regular periods were perhaps unique. Employment on an offshore drilling rig such as that operated by the applicant did not raise for the employee the prospect of any additional expenses at the site of employment. The employee was restricted to the site and the employer provided all meals and beverages and met the cost of all facilities and services.
The applicant invited the Court to take that matter further and to consider the pecuniary worth of the advantages and the savings that an employee received when account was taken of matters such as the elimination of expenditure on his or her own sustenance and the reduction of cost of running a motor vehicle.
However, in sec. 30 the Act was not concerned with whether there was a remainder of additional expenses after savings which accrued from a period of living away from home had been accounted for.
It was the underlying purpose of the allowance that determined the applicability of the Act and the fact that in addition to the allowance, an employee may have enjoyed countervailing savings which offset his or her additional expenses would be irrelevant.
However, the lack of likelihood of additional expenses being incurred by employees of operators of offshore drilling rigs may tend to confirm a conclusion that the purpose of the allowance negotiated by representatives of the employers and employees and recorded in the 1984 award, was to provide a pecuniary recognition of, and compensation for, the unattractive and unnatural aspects of that employment. Such an allowance could not be described as being ``in the nature of compensation for additional expenses'' merely because it had the capacity to offset some element of undefined and uncertain expenditure should the occasion arise.
Counsel for the Commissioner submitted that such employment which separated an employee from his usual home for some days may have involved some additional expense such as travelling costs between the place of residence and the point of assembly, the cost of long-distance telephone calls to keep in touch with family or friends and extra household expenses such as employing lawn-mowing contractors and handymen to do jobs the employee may otherwise have done. That may be so, but the history of the allowance paid under the award did not indicate that the allowance was directed to such elements of additional expense.
Section 30 of the Act does not treat an allowance as a benefit unless the allowance, in whole or in part, was in the nature of compensation for additional expenses (subpara. 30(b)(i)) or for additional expenses and additional disadvantages (subpara. 30(b)(ii)) in which event such whole or part of the allowance becomes the benefit for the purposes of the Act. The Act does not state that such part of an allowance as is in the nature of compensation for additional disadvantages will be a benefit if it stands alone. That is, an allowance created for the purpose of providing compensation for disadvantages which flow from employment which requires an employee to live away from home, will not be a benefit to which the Act applies. Such an allowance may remain to be assessed in the hands of the employee as income according to ordinary concepts of income.
Counsel for the Commissioner submitted that subpara. 30(b)(ii) was intended to be disjunctive in operation, but the plain meaning of the section shows that that submission cannot be accepted. Apart from the subparagraph being expressed in conjunctive form, if the draftsmen intended to achieve a disjunctive result such a result could have been obtained by deleting any reference to additional expenses in the subparagraph.
The proper conclusion must be that the legislature intended that an allowance paid by an employer to compensate an employee for intangible disadvantages of employment required to be performed away from the usual place of residence of the employee and to make such employment more attractive to the employee would not be a fringe benefit assessable under the Act unless such compensation was a composite payment which included compensation for additional expenditure likely to result from the requirement that the employee live away from home for any period.
The nature of the allowance paid under the 1984 award was that of compensation to an employee for the particular disadvantages of living in a remote location and for the social disruption occasioned by the employment as a result of requiring the employee to live away from home.
It was not an allowance in the nature of compensation for additional expenses and, therefore, it was not an allowance to which sec. 30 of the Act applied. Accordingly the applicant's appeal should be allowed with costs, the Commissioner's decision on the applicant's objection set aside and the objection remitted to the Commissioner for reconsideration in accordance with these reasons.