Case Law: Weeks v Commissioner of Taxation [2013] FCAFC 2 (Taxation)

The Federal Court has handed down its decision in the case of Weeks v Commissioner of Taxation [2013] FCAFC 2, ordering that the appeal be dismissed with costs.

Background

The appellant was employed as a senior public servant within the ATO. She had considered retirement, but had made no formal plans. The appellant took a period of recreational leave, followed by a period of long service leave, during which time her tasks were reallocated. The appellant considered that her role had been made redundant. She formally raised the possibility of a voluntary redundancy in an email to the national director. The ATO did not agree that there was a redundancy, however, the question was later revisted, and approval was eventually given to make a formal offer of redundancy. The appellant was dismissed.

The underlying substance of the matter is that the appellant contends that the tax properly payable on the relevant part of her redundancy payment is nil while the respondent Commissioner contends that the tax properly payable is $7,825.

Prior Proceedings

The primary judge identified the question of law as being "if an employee is terminated under s 29(3)(a) of the Public Service Act 1999 or cl 97.1 of the Agency Agreement on the grounds that, as an employee, she is excess to the requirements of the ATO, in the sense that her services can no longer be utilised, does any payment made consequent upon that termination, fall within the expression “genuine redundancy payment” under s 83-175(1) of the ITA Act?" The primary judge answered that question in the negative. 

Appeal to Federal Court

The Court found that the appellant failed to establish that the Tribunal erred in law or that the primary judge erred in failing to find the Tribunal erred in law.

In the reasons for judgment, it was observed that "the...important question for present purposes is whether she was genuinely redundant." Case law has set out that "redundancy occurs where an employer no longer requires that a job be done by anyone. That situation - where a job effectively disappears - must be distinguished from the situation in which the employer no longer wants a job done by the (former) employee in question."

The Court found that in this case, the job had not disappeared, even if the position number had changed. 

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