Victory: Overtime super ruling killed off

Proposal to force operators to pay superannuation contributions on overtime hours killed off

Victory: Overtime super ruling killed off
Victory: Overtime super ruling killed off
A Tax Office proposal that would have forced trucking employers to pay superannuation contributions on overtime hours and parental leave has been killed off.

The Australian Road Transport Industrial Organisation (ARTIO) says the decision to abandon the position that superannuation should be paid on ‘regular overtime’ will save businesses tens of millions of dollars annually.

The ATO issued a draft ruling in November which changed the basis for calculating contribution, rejecting the accepted definition of ‘ordinary time earnings’ (OTE) to include any earnings paid for "regular, usual, customary or normal" working hours.

ARTIO calculated the cost to business of the proposed change at between 5 and 6 percent to payroll, adding up to $50 million annually for the industry.

It argued the change in interpretation was not supported by any legislative amendment and would have resulted in a shift to a system where no employer would have been sure whether or not they were complying with their superannuation obligations until after the event.

ARTIO Secretary Treasurer Philip Lovel is celebrating the decision, saying the cost impact on trucking operators would have been "enormous" without any ability to increase prices.

"As well as being without legal foundation, on a practical assessment ‘regular, usual, customary or normal’ hours could only ever be determined after the overtime had occurred and too late for employers to comply with their superannuation obligations," Lovel says.

"It never could have worked in our industry."

The final ruling issued by the ATO today returns the definition of OTE to the same as before the draft was issued.

"This is a common sense outcome that will provide some stability to the transport industry," Lovel says.

He thanks the trucking industry for its support in the fight, particularly NSW ARTIO President and Linfox executive Laurie D’Apice who was involved in the negotiations.

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