In this week’s Workplace Bulletin:

• Payments in lieu of notice now attract a superannuation guarantee charge!
• Quick Tip of the Week: How to get more information about superannuation
• Workplace Helpdesk Q and A: Rehiring after a redundancy
• Workplace Wackies: Essential additions to the workplace vocabulary

Dear Reader,

Spring has sprung! And change is certainly still in the air in the world of employment law.

Here’s a new ruling you may not have known about…

In the past, payments made in lieu of notice did not attract a superannuation guarantee charge (SGC). Now, they do!

What is SGC?

SGC is a quarterly charge that the federal government will impose on you if you fail to contribute sufficient superannuation on behalf of your employees.

The minimum level of superannuation (often known as SGC contributions) is 9% of an employee’s earnings base. (On 1 July 2008, the earnings base was standardised to mean an employee’s “ordinary time earnings” or OTE). The requirement to contribute 9% superannuation only applies to a maximum limit of earnings (in 2009-2010 this limit is $40,170 in a quarter).

The new ATO ruling

On 1 July 2009, a new ATO ruling took effect.

This ruling makes it clear that the ATO considers payments in lieu of notice to be OTE. This means that payments in lieu of notice now count towards an employee’s ordinary time earnings. Therefore, they will now attract SGC.

This is a change from the past, as the ATO did not previously consider payments in lieu of notice to be part of an employee’s OTE, and they did not attract SGC.

This ruling does not affect other types of payments – annual leave, redundancy and other leave payments still do not attract SGC.

Remember: You don’t have to make SGC contributions to:

• employees who are under 18;
• employees who are over 69; or
• employees who earn less than $450 per calendar month.

Quick Tip of the Week: More information about your requirements in regards to SGC payments will be outlined in future Employment Law Practical Handbook updates. In the meantime, you can consult the ATO website www.ato.gov.au for more information.

Workplace Helpdesk: Rehiring after a redundancy

Answered by Charles Power, editor-in-chief, Employment Law Practical Handbook.

Q: We are looking to make someone redundant because their position is not currently required within our business. However, it is likely that the position may be required down the track. Is there a specified period (e.g. 12 months) in which we cannot hire (or promote) somebody to fill the position after making the current person redundant?

A: No, there is no specified period that you have to abide by. However, to avoid anyone thinking that the redundancy is a sham, it would be a good idea to allow at least 6 weeks before you promote or hire another person for the role.

Until next time…

Claire Berry
Editor

Tags: ATO, employees, federal government, Redundancy, ruling, SGC, superannuation, workplace