By Charles Power
If you pay money to an employee or a super fund because of a mistaken belief that you had to, you can recover the monies paid unless the employee or fund has changed their or its position in good faith.
In North Adelaide Service Partnership v Retail Employees Superannuation Pty Ltd (2019), a supermarket chain employer made superannuation contributions to a fund in the mistaken belief that Superannuation Guarantee (SG) legislation required it.
In fact SG contributions do not need to be made for employees under 18 years old earning less than $450 per month or working not more than 30 hours per week.
The great majority of employees of the employer in this case were under 18, were casuals and worked less than 30 hours per week. However between 1992 and 2016 the employer had been mistakenly paying SG contributions to these exempt employees.
The employer asked RES for a refund of superannuation contributions paid in respect of employees who were under 18 years of age and did not work more than 30 hours per week, or did not earn $450 per month. RES refunded contributions paid since 1 July 2014, but declined to refund contributions paid in respect of previous financial years.
The employer commenced legal action against the fund seeking repayment of superannuation contributions made in respect of exempt employees between 2000 and 2014.
The Court ruled that the person who made the superannuation payments on behalf of the employer intended and believed that the payments were required to be made. Therefore the employer was entitled to recover from the fund the amount of superannuation contribution payments made in respect of exempt employees.
Thanks to a reader who pointed out that employees may be employed under terms that provide for more generous superannuation arrangements than the minimum support required under the Superannuation Guarantee (Administration) Act. An example is an employee covered by the Restaurant Industry Award. This award would require their employer make super contributions for them if they earn $350.00 or more in a calendar month.