The Federal Court has dismissed an appeal by a taxpayer, a former senior tax officer, against an earlier AAT decision, which held that a termination payment made to her because her services could no longer be effectively utilised by the Tax Office, was not a “genuine redundancy payment” under s 83-175 of the ITAA 1997.
The taxpayer was an Executive Level 2.1 officer in the Tax Office. In March 2010, following negotiations between the taxpayer and another senior tax officer, she was offered a redundancy. That offer was made under clause 97 of the ATO (Executive Level 2) Agency Agreement 2009, on the ground that she could no longer be effectively utilised in the ATO. The taxpayer accepted the offer and her employment was terminated on the grounds that she was “excess to the requirements of” the ATO under s 29(3)(a) of the Public Service Act 1999.
Following the termination of her employment, the taxpayer received a termination payment in respect of which tax was deducted. The taxpayer sought a private ruling that the termination payment was tax-free on the basis it was a “genuine redundancy payment” under s 83-175. However, the Commissioner concluded there had not been a genuine redundancy payment. At first instance, the AAT upheld the Commissioner’s view that the taxpayer was not “genuinely redundant” under s 83-175.
The Federal Court recounted briefly the taxpayer’s employment history, and the circumstances, which led to her raising, with senior ATO staff, the possibility of a voluntary redundancy under clause 97 of the Agency Agreement.
The Court dismissed the appeal noting the importance of identifying a precise question of law for the purposes of s 44 of the Administrative Appeals Tribunal Act 1975. The Court concluded that the Tribunal did not err in its construction of s 83-175(1) and that the Tribunal’s findings of fact were not open to be reviewed in the appeal.
(Weeks v FCT [2012] FCA 342, Federal Court, Reeves J, 4 April 2012.)
[LTN 66, 5/4]
Taxpayer appeals to Full Federal Court
The taxpayer has appealed to the Full Federal Court against the decision of Reeves J in Weeks v FCT [2012] FCA 342. The Federal Court had dismissed an appeal by the taxpayer, a former senior ATO officer, against an earlier AAT decision which held that a termination payment made to her on the basis her services could no longer be effectively utilised by the Tax Office was not a “genuine redundancy payment” under s 83-175 of the ITAA 1997.
[LTN 73, 18/4]