Federal Circuit Court dismisses rig worker’s case for additional super
The Federal Circuit Court has dismissed the application of an oil rig worker seeking to prove that his employers were obligated to pay him additional superannuation over and above the maximum super contribution base for a given year.
In Whitt v Clough Projects [2019], Mathew Whitt, a worker on an offshore oil rig in Western Australia, was seeking orders from the court that his employer pay him an additional $3,434.80 in super that was owed from work in November and December 2017 and January 2018, as well as an additional $3,434.80 in penalties as compensation for losses incurred.
Mr Whitt’s case sought to prove that his employment agreement with Clough Projects specified that employer-funded super contributions from the firm were calculated based on the definition of working hours of offshore employees as stipulated in his employment contract, rather than being limited by the maximum contribution base as per the Superannuation Guarantee (Administration) Act 1992 (SGAA).
As part of his work, Mr Whitt worked 12-hour days when rostered on and was entitled to be paid for travel to and from the rig where he worked, his employment contract stated. This would have taken him above the maximum super contribution base for the 2017 year, which was $52,760.
While Mr Whitt’s employment contract stated that contributions would be made “in accordance with” the SGAA, it also stated that contributions would be paid “based on” the employee’s ordinary time earnings including travel time for offshore employees.
Clough Projects stated that although the maximum contribution base was not explicitly stated in the employment contract, the wording assumed the firm would make contributions in a manner that would not see them incur a penalty charge, which would be the case if the contributions exceeded the maximum base.
The firm also argued the words “based on” in the contract did not imply contributions had to be made dollar-for-dollar to match an employee’s ordinary time earnings; therefore, it was possible the maximum contribution base could limit the amount of super paid to employees.
Judge McNab stated in his judgment that as the employment agreement was a greenfields agreement made in collaboration with the relevant unions, it had been “negotiated by parties familiar with [the SGAA’s] operation” and “had the parties intended the contributions not be subjected to the consequences of particular provisions of the SGAA, the parties could have excluded those provisions [referring to the SGAA]”.
Judge McNab said: “It follows that when the definition of ‘ordinary time earnings’ is read alongside clause 3.11 of the agreement, the effect is that the superannuation contribution to be paid to the applicant is paid on [either] the applicant’s earnings ‘based on their customary work hours’ including travel time; or if the total payment would be greater than the maximum contribution base for the quarter, then the employee would be paid the maximum contribution base.”
