Edited version of private advice

Authorisation Number: 1051989580413

Date of advice: 17 June 2022

Ruling

Subject: Ordinary time earnings

Question

Were the hours worked on weekends by the entity's casual employees for the period 1 January 20XX to 2 March 20XX ordinary hours of work, therefore the earnings in respect of those hours were "ordinary time earnings" ("OTE") as defined in section 6(1) of the SGAA?

Answer

No.

This ruling applies for the following period

Year ended 30 June 20XX

Year ended 30 June 20XX

Year ended 30 June 20XX

Year ended 30 June 20XX

Year ended 30 June 20XX

Year ended 30 June 20XX

Year ending 30 June 20XX

The scheme commences on:

1 January 20XX

Relevant facts and circumstances

The entity provides services to both the publicand private sectors on a national level.

The entity employs various workers on a casual basis, and many workers on a permanent basis.

Casual employees work on weekdays and weekends. Some casual employees only work on weekends.

"Weekends" refers to time worked on Saturday and Sunday.

There were three enterprise agreements covering casual workers for the periods in question

The relevant clauses are:

•         "A casual employee is an employee engaged on an hourly basis. For ordinary working time, a casual employee shall be paid an hourly rate as prescribed in Entity's classification structure for the work performed, plus a loading of 25%. The loading constitutes part of the casual employee's all-purpose rate. A casual employee shall be paid for a minimum of 4 hour's work on any one day. The termination of employment of a casual employee shall be on an hour's notice given by either party."

•         "The ordinary hours of work for full-time employees are 38 hours Monday to Friday."

•         "The span of ordinary hours is from 0600 to 1800 Monday to Friday, except for designated shift/rostered work."

•         "The ordinary hours worked per day are 8 hours."

•         "Ordinary shifts to be worked by an employee will be a maximum length of 10 hours."

•         "The shift loading applies to the hours worked between Monday and Friday inclusive. Ordinary hours worked by a shift worker on a Saturday or Sunday shall be paid in accordance with Clause 19."

•         "All ordinary time worked on a Saturday shall be paid at the rate of time and a half."

•         "All ordinary time worked on a Sunday shall be paid at the rate of double time."

•         "Casual employees working on a Saturday shall be paid at the rate of time and a half for the first 2 hours and double time thereafter."

•         "Ordinary time hours will be paid as per 0001 - 2400 on the day they are worked."

•         "All hours outside the ordinary hours worked on Monday to Friday inclusive are overtime and shall be paid at a rate of time and a half for the first 2 hours and double time thereafter. The double time payment shall continue until the completion of the overtime."

•         "All hours outside the ordinary hours worked on Saturday are overtime and shall be paid at a rate of time and a half for the first 2 hours and double time thereafter provided that all hours worked after 12 noon shall be paid at the rate of double time."

•         "All hours outside the ordinary hours worked on a Sunday are overtime and shall be paid at the rate of double time."

Relevant legislative provisions

Superannuation Guarantee (Administration) Act 1992 Section 6(1)

Reasons for decision

Question

Were the hours worked on weekends by the entity's casual employees for the period 1 January 2016 to 2 March 2022 ordinary hours of work, therefore the earnings in respect of those hours were "ordinary time earnings"("OTE") as defined in section 6(1) of the SGAA?

Summary

The hours worked on weekends by the entity's casual employees for the period 1 January 2016 to 2 March 2022 were not ordinary hours of work. Therefore, the earnings in respect of those hours are not OTE as defined in section 6(1) of the SGAA.

'Ordinary hours' for casual employees is sufficiently defined by the relevant Enterprise Agreements (EAs) as not including time worked on Saturday or Sunday.

Detailed reasoning

Paragraph 14 of SGR 2009/2 states that the document (in this case, the EA) does not need to use the exact expression "ordinary hours of work". Although, a genuine distinction must be made between ordinary and other hours. Any hours worked in excess of, or outside the span of, those specified ordinary hours of work are not part of the employee's 'ordinary hours of work' (para 15).

Applying this to the relevant EAs, it is our belief that they sufficiently make this 'genuine distinction' between 'ordinary hours' and other hours.

Clause xx in one EA provides for ordinary hours as being from Monday to Friday, except for designated shift work. Clauses xx-xx provide for weekend penalty rates and overtime on weekends, distinct from ordinary weekday hours, further bolstering the reasoning that weekend work for casual employees is not their ordinary hours of work.

It is also useful to look at how shift workers are treated in this EA to distinguish them from casual workers, for the purpose of identifying ordinary hours for casual workers. Clause xx states that shift work employees are entitled to an additional week's annual leave, which is not an entitlement for casual workers, as per clause xx. Clause xx also states that shift workers earn additional annual leave loading, which is also not an entitlement for casual workers, again as per clause xx.

The later EA similarly provides this 'genuine distinction' between 'ordinary hours' and other hours, firstly with clause xx which states that the span of ordinary hours are from Monday to Friday, except for designated rostered work. For rostered employees, clause xx states that their ordinary hours are 38 hours Monday to Sunday. This EA also includes clauses that mention weekend penalty rates and weekend overtime, most notably clauses xx-xx, which mention that hours 'outside the ordinary hours' worked on Saturday/Sunday are paid at an overtime rate.

The 'ordinary hours' on Saturday and Sunday mentioned must only be for rostered employees whose ordinary hours include weekends.

Therefore, it is necessary to distinguish casual workers from rostered employees to provide certainty that casual worker's ordinary hours do not include Saturday or Sunday. Similar to the earlier EA's annual leave clauses, this EA provides annual leave provisions under clause xx for rostered workers. Clause xx allows rostered workers to attract additional annual leave, and as per clause xx, annual leave does not apply to casual employees. It therefore follows that casual employees are distinct from rostered workers and therefore their ordinary hours do not include Saturday or Sunday.

The EAs therefore draw a genuine distinction between ordinary and other hours for casual workers. All EAs exclude weekends as ordinary hours for casual employees, meaning hours worked on Saturday and Sundays by casual employees do not attract SG contributions. This is especially bolstered by the existence of overtime and weekend penalty rates, distinguishing weekends from weekdays that fall within the ordinary hours prescribed by the EAs.

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