Port Kembla workers were underpaid between $2,239 and $11,416 between 2010 and 2016, the AWU said. (AAP: Dean Lewins)
An estimated 3,000 workers have missed out on millions of dollars of backpay after a court ruled Australia’s largest steelmaker BlueScope had been correctly calculating superannuation payments.
- The AWU argued that BlueScope had calculated its workers’ super payments based off ordinary time, and not wages, which included additional hours and public holiday payments
- But the court ruled in favour of BlueScope, and the workers now miss out on ‘millions’ in backpay
- The decision has major implications for other employers and employees on industrial awards, who have been urged to seek legal advice
The decision, experts say, has major implications for other companies whose employees are on industrial awards.
A full bench of the Federal Court recently overturned an initial Federal Court ruling that BlueScope broke the law by not paying its workers superannuation contributions for the extra hours worked and public holiday pay components of their salaries.
The appeal judgment of Chief Justice James Allsop, handed down on May 24, was that the superannuation legislation was structured upon standard hours at ordinary rates where present in an industrial instrument.
According to the Australian Workers Union — which brought the case against the company on behalf of six workers who believed they had missed out on their superannuation entitlements — the Full Federal Court decision is a big blow to about 3,000 past and present employees who were on the same enterprise agreements.
“The judgment will result in lower retirement savings for workers,” Australian Workers’ Union NSW senior vice-president Paul Farrow said.
“We fought as hard as we could in court for our members, but in the end the decision went against us, which was extremely disappointing.”
Call for industrial relations reform
Mr Farrow said the decision highlighted the need for reform of the industrial relations system.
“Superannuation was established by the labour movement precisely so that workers like those at BlueScope could retire comfortably,” he said.
“This decision pushes against that objective and that should be rectified through legislation.”
Using the six workers as example cases, the AWU argued that BlueScope had calculated their super payments based off ordinary time and not on their wage, which included additional hours and public holiday payments.
The six workers, AWU said, were underpaid between $2,239 and $11,416 between 2010 and 2016, with other workers likely to be underpaid similar amounts.
In failing to make the superannuation payments, the steel company was in the initial Federal Court decision, said to have breached its enterprise agreements and subsequently contravened Section 50 of the Fair Work Act.
But BlueScope appealed the decision and won. A spokesman for the company welcomed the decision, which affects employees at the Port Kembla steelworks.
“We are pleased with the recent Federal Court ruling in favour of BlueScope, confirming that the company had correctly interpreted and applied the superannuation legislation,” he said.
Employers urged to check super payments
Workers from the Port Kembla steelworks earlier this year voted in favour of a new industrial agreement with BlueScope.
Bluescope steelworkers at the Port Kembla Plant at a stop work meeting voting to support industrial action (ABC Illawarra: Kelly Fuller)
It came after months of damaging industrial action, and hundreds of job cuts at the steel maker in 2015 aimed at keeping the company afloat.
KPMG law partner Keith Swan said the court’s decision highlighted the uncertainty in the law, and urged both employers and employees to check superannuation entitlements as part of industrial agreements.
“The courts are more likely to take a narrow interpretation in regard to the definition of ordinary times earnings, and therefore provide that super only has to be paid on standard hours and ordinary rates,” he said.
Mr Swan urged other employers who use annualised salaries, and who were not contributing superannuation in respect of an overtime component, to double check their agreements, and seek legal advice if they were unsure.
He said BlueScope Steel had specifically set out its annualised or aggregated salaries were calculated on “base salary” and “overtime” components, but other contracts may not be so explicit about it, putting employers at risk of penalties if there are any errors in the payment of peoples’ super.