Super spat hinges on 'ordinary hours of work'

Super spat hinges on

By Rachel O'Connor on 13 March 2018 The Federal Court of Australia has found that ‘ordinary hours of work’ can include ‘additional hours’ and ‘public holiday hours’ when calculating superannuation contribution payments for employees.

The court granted declaratory relief to BlueScope Steel for contravening the Fair Work Act by failing to make these superannuation payments.  


The Australian Workers’ Union (AWU) pursued proceedings against BlueScope Steel (AIS) Pty Limited and BlueScope Steel Limited (BlueScope Steel) on behalf of six employees.

The union argued that the ‘additional hours’ and ‘public holiday’ components of the employees’ salaries fell within the term ‘ordinary hours of work’ under s6(1) of the Superannuation Guarantee (Administration) Act 1992 (Cth).

In failing to make the superannuation payments, the steel company was said to have breached its enterprise agreements and subsequently contravened s50 of the Fair Work Act 2009 (Cth).

On the other hand, the respondents contended that the agreements did not contain any term which required the payment of superannuation contribution and argued that they had not contravened the Fair Work Act.

The court referred primarily to the employment circumstances of Jason Le Clerc and Matthew Storey to determine the matter.

Mr Le Clerc was on an aggregate salary from May 2011 while employee Mr Storey was on an annualised salary from 1995 to 2016 and then an aggregate salary from January 2016.

An aggregate salary was determined by combining the base salary, public holiday payment, weekend payment and shift allowance. An annualised salary was calculated by the combination of the base salary, public holidays, shift penalties and additional hours.

The agreements and awards with which each employee was subject to varied slightly but there was a degree of commonality to them.

Does Clause 7 create an obligation on the company to make superannuation payments?

The Federal Court rejected the respondents’ arguments in regard to s50 of the Fair Work Act. The court held that a contravention can be found where a term has not been complied with and it does not matter whether the term provides a legal obligation to make a superannuation contribution.

Regardless, clause 7 of the enterprise agreement was found to be the source of a binding legal obligation to make superannuation contributions which is distinct from the Superannuation Act.  The court held that the agreement expressed this obligation in clear, strong terms: ‘the company will make contributions into an employee’s superannuation account in accordance with the scale...’. It was said to be more than just a suggestion.

Judge Flick rejected BlueScope’s argument that the Superannuation Act was a ‘complete and detailed’ regime which should not be supplemented or duplicated ‘by any further inconsistent rights pursued through s50 of the Fair Work Act’. It was held that the objects, purposes and penalties under the acts were completely different.

Ordinary hours and overtime

The court referred to previous cases and determined that ‘ordinary hours of work’ must be construed in a way which best promotes the underlying object of the Act. In fact, hours which are worked beyond fixed hours may be so regular and normal that they become ‘ordinary hours’ of work.

Annualised salary

The court held that the terms of the agreement which said ‘staff need to be available 24 hours per day, 365 days of the year’ – and that staff would be expected to attend work with one hour’s notice – meant that there was no ‘real or practical distinction’ between the ‘ordinary hours’ of work and the ‘additional hours’ or ‘public holiday’ hours.

Judge Flick accepted the AWU’s submission that these hours worked can be said to be so regular that they are ordinary.  

Aggregate salary

The court did not find that the term ‘aggregate salary’ itself was enough to assume public holiday hours fell within ordinary hours.

However, the court accepted the fact that the clause of the agreement (which explicitly states that it includes the sum of additional payments (public holidays)) supported a conclusion that it should be included as ordinary hours. In addition, Judge Flick found that clause 10.2.1 which states staff may regularly be called on to work public holidays, further reinforced this conclusion.


The court found that the clauses of the enterprise agreements including clause 7 were capable of giving rise to a contravention of s50 of the Fair Work Act. Contraventions have occurred because superannuation contributions should have been paid but were not. The payments should have been made in respect to ‘the additional hours component’ and the ‘public holidays component’ of the annualised salary and the ‘public holidays component’ of the aggregate salary.

The court granted declaratory relief and the parties were ordered to submit these declarations within 14 days.

Australian Workers' Union v BlueScope Steel (AIS) Pty Ltd [2018] FCA 80 (14 February 2018)


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