Resources: Blog

Celebrity Fashion and Wedding Dress Designer forced into liquidation due to unpaid employee entitlements

Blog
|

Dressing Down

It has recently been reported that celebrity fashion designer, Johanna Johnson who has designed gowns for Madonna and Christina Hendricks is being pursued in court by the Australian Taxation Office (ATO) and former employees for more than $1 million. The amount includes at least $300,000 in owed superannuation that had not been paid to employees for many years.

It has recently been reported that celebrity fashion designer, Johanna Johnson who has designed gowns for Madonna and Christina Hendricks is being pursued in court by the Australian Taxation Office (ATO) and former employees for more than $1 million. The amount includes at least $300,000 in owed superannuation that had not been paid to employees for many years.

The situation of Johanna Johnson’s business serves as a reminder to employers that they have superannuation obligations to various kinds of workers. The general rule is that if you pay an employee $450 or more before tax in a calendar month, an employer is required to pay superannuation in addition to the employee’s wages. The minimum an employer must pay is called the Super Guarantee (SG).

The SG is currently 9.5% of an employee’s ordinary time earnings. Employers must pay the SG at least four times per year, by the quarterly due dates.

If an employer fails to pay the SG into the correct fund by the due date, the employer may have to pay the SG charge. The SG charge is made up of the SG shortfalls amounts, interest on the amounts owing and the administration fee.

However, employees may not be the only workers entitled to superannuation. In On Call Interpreters and Translators Agency Pty Ltd v CoT (No 3) [2011] FCA 366 the Federal Court determined that contractors may be entitled to superannuation – in particular, in circumstances where a contract is considered to be wholly or principally for the labour of the person engaged and the following characteristics are met:

  • The individual is remunerated (either wholly or principally) for their personal labour;
  • The individual must perform the work personally (there is no right of delegation); and
  • The individual is not paid to achieve a result.

Therefore, employers must seriously consider reviewing all arrangements with employees and contractors to ensure they are paying superannuation to those who are entitled to, otherwise there is not only the risk of paying back the workers with interest their owed superannuation entitlements, but the possibility that the ATO can take the business to court for breach of superannuation guarantee legislation.

 

Information provided in this blog is not legal advice and should not be relied upon as such. Workplace Law does not accept liability for any loss or damage arising from reliance on the content of this blog, or from links on this website to any external website. Where applicable, liability is limited by a scheme approved under Professional Standards Legislation.

 

Similar articles

Workplace Relations Review

Cases and Legislation September 2020

The Queensland Government recently passed legislation amending the Criminal Code Act 1899 (the Code) to criminalise wage theft by employers in Queensland.‍The Criminal Code and Other Legislation (Wage Theft) Amendment Bill 2020 (the Bill) was introduced to the Queensland Parliament in response to a Report released in 2018 by the Queensland Parliamentary Education, Employment and Small Business Committee following an inquiry into wage theft in Queensland. The Report identified critical issues in wage theft as well as deliberate action taken by employers to frustrate employees’ attempts to recover entitlements.

Read more...

Workplace bullying and reasonable management action

Just Managing

Workplace bullying can be extremely serious and should not be tolerated by employers.

Read more...

How a region banded together to improve employment standards

Group Effort

No employer operates in a silo – all employers operate in complex systems of interrelated stakeholders including employees, customers, other businesses, and regulators who enforce the laws that apply to the employer and their business.

Read more...

The onus and presumption in adverse action matters

It’s on you

Under the general protections provisions in the Fair Work Act 2009 (Cth) (FW Act), it is unlawful for a person to take adverse action against another person for a proscribed reason. One of the features of the general protections provisions under the FW Act is the presumption that adverse action was taken for a proscribed reason unless it is proven that the adverse action was not taken for that reason.

Read more...

Notice of termination in the employment contract

Put it in writing

When it comes to engaging new employees or promoting existing employees, it is crucial that employers prepare and review contracts of employment to ensure that they accurately reflect the terms which will govern an employee’s employment.

Read more...

Termination of employment letters

In your letter

A termination of employment letter serves a significant purpose in bringing the employment relationship to an end.

Read more...

Let's talk

please contact our directors to discuss how ouR expertise can help your business.

We're here to help

Contact Us
Let Workplace Law become your partner in Workplace Relations.

Signup to receive the latest industry updates with commentary from the Workplace Law team direct to you inbox.