ASMOF win in Contract & FBT dispute

15-May-2020


ASMOF has had an important win against a health employer over their attempt to recover FBT from a member for travel, accommodation and meal expenses.

This was an important issue if left undisputed could have set a dangerous precedent for many public sector workers in NSW.

ASMOF took the matter to the NSW Industrial Relations Commission (IRC) and this resulted in the employer agreeing to withdraw their claims against the member

This is a good outcome for the member and other members in NSW.

Background

On 23 April 2020, ASMOF took the employer to the IRC because over a dispute about an alleged FBT liability the employer asserted that a member, who is a “Fly in Fly out” (FIFO) doctor owed.

The member had entered into an employment contract with the employer 17+years ago whereby the terms provided that the employer would pay for airfares and other travelling expenses as well as be responsible for all accommodation and meals. In all these years, there had never been an FBT issue raised by the employer.

However, in the latter half of 2019, the member was notified that his employer intended to pursue FBT liability against him (i.e. his employer wanted to shift the burden of the FBT costs onto him and the amount alleged to be owing was in the vicinity of $40K p.a.).

ASMOF immediately wrote to the employer and argued, amongst other things, that if the demand was not retracted we would lodge a dispute in the IRC. The attempt to recoup the FBT from our member and the attempt to apply pressure on him to salary package, would constitute a breach of his contract and a significant departure from his existing contractual arrangements.

ASMOF argued that the terms of employment did not permit the employer to recover nor prospectively shift the burden of the FBT liability onto him.

Several months went by before the employer (including their internal taxation accountant) sought a meeting with ASMOF and our member. The employer was of the view that the ATO Tax Determination (TD2017_D6) permitted them to pass the FBT costs onto our member. During these discussions, ASMOF continued to maintain our position that the contractual terms ought to be observed, and that we would seek our own FBT advice.

Our position is that irrespective of the ATO Tax Determination, the terms of his employment contract did not permit the employer to recover nor prospectively seek to pass on the FBT costs.

Implications for Members

This is a good outcome for ASMOF and any other members who may be employed under similar contractual arrangements.

If you find yourself in a comparable situation, please contact us at allocation@asmof.org.au for advice and assistance.