Common use of No Disadvantage Clause in Contracts

No Disadvantage. The annualised salary must be no less than the amount the employee would have received under the award for the work performed over the year of the Agreement – or less if the employment is terminated before a year. This is similar to the BOOT test for an IFA The flat rate calculator can be used to calculate the salary to ensure that the employee is not disadvantaged. Every 12 months or on termination of the employment the employer must do a tally of the hours worked and the amounts paid to ensure that there is no shortfall. If there is a shortfall the employer must pay this to the employee within 14 days, Record keeping Records must be kept of the following: Starting and finishing times Any unpaid breaks taken These records must be signed by the employee each pay period or roster cycle. Superannuation Superannuation is payable on Ordinary Time Earnings (OTE) which are defined in the taxation laws. Overtime is NOT defined as Ordinary Time Earnings but if you pay a flat rate of pay which incorporates overtime and the overtime is not distinctly identifiable then superannuation must be paid on the full amount. If, however the payment includes an amount that is “expressly referable” to overtime hours as remuneration for overtime worked then the payment for overtime will not be OTE. (Superannuation Guarantee Ruling SGR 2009/2) The ATO has issued an administratively binding advice which is on the ATO website. The reference number is 1012597896867. While this advice is specific to the employer who sought the advice it is useful to ascertain how the ATO might interpret the situation. If you want absolute certainty then you should seek your own private ruling from the ATO. The advice states that if the hours which are ordinary time hours are clearly specified in the contract then superannuation need only be paid on these hours not on all of the hours worked. This is because the annualised salary does not alter the hours which are ordinary hours of work but rather varies the rate of pay for the overtime hours and those hours. If you wish to pay superannuation on the 38 hours worked, not the hours inclusive of overtime, then Clause 8.4 must be in the contract. It has been drafted to comply with SGR 2009/2 and the ATO Advice to ensure that the overtime hours are ‘expressly referable”. The spreadsheet which you will attach to the IFA will also identify the overtime hours.