Jill Perkins, a dedicated educator with four decades of experience, is looking forward to a well-deserved retirement filled with creative pursuits and literary adventures. “I want to explore trying to finish projects that I started that are all over the house and I want to try different things,” Ms Perkins shared. “I’m just letting myself play and have fun.” After spending 30 of her 40 years in the classroom in the picturesque south-western Victorian town of Portland, Ms Perkins feels ready to step away from the demands of teaching.
“I’d started in 1985. I’ve been in Portland for 30 years,” she recounted. The decision to retire crystallised during a professional development day. “I thought, ‘I just can’t do another new initiative,’” she admitted. While she genuinely enjoyed the core of teaching, particularly being in the classroom, the cumulative weight of other responsibilities proved taxing. “I really liked teaching. I liked being in the classroom. It was all those other burdens that in the end just wore me down … it’s a full-on job.”
However, as Ms Perkins, now 63, prepares to ease into retirement, she suspects she may have been short-changed by her former employer. She is the lead claimant in a class action filed in the Federal Court, representing the Victorian branch of the Australian Education Union (AEU). The union has initiated legal proceedings against the Victorian Department of Education, alleging a failure to pay superannuation entitlements on a specific allowance for tens of thousands of teachers.
Ms Perkins believes she is personally owed close to $10,000 in superannuation and investment earnings. “Not enough to buy a new car, but a considerable enough sum that I thought that is something that could have been very helpful,” she stated. “It’s quite an unfair thing to realise that we’d been underpaid.”
The Salary Loading Allowance Dispute
At the heart of the legal challenge is the Salary Loading Allowance, an annual payment that public school teachers in Victoria receive. The AEU contends that the Department of Education failed to include this allowance in superannuation calculations from 1995 to 2023. The union estimates the total loss of contributions to be approximately $100 million, with an additional $300 million lost in potential investment earnings over the years.
Justin Mullaly, the Victorian president of the AEU, explained the union’s position. “The Department of Education for many decades has decided that a salary loading allowance, which is a payment that every worker in a public school receives, shouldn’t be being paid superannuation on top of that allowance,” he said. “We say that’s wrong. We say that’s unlawful. And so we’ve made an application to the Federal Court to sue the government for that superannuation.”
The union is seeking a court declaration to confirm that superannuation should have been paid on this allowance, with the claim dating back as far as 1995.
Regulatory Guidance and Departmental Response
Compounding the situation, the Australian Taxation Office (ATO) has previously ruled that superannuation is indeed payable on the Salary Loading Allowance, directing the department to make the necessary payments. However, the Department of Education has lodged an appeal against this ATO decision in a separate Federal Court case. Consequently, the AEU’s class action will likely not be resolved until a judgment is reached in that parallel legal battle.
Notably, Mr Mullaly confirmed that the department did commence making superannuation payments on the allowance in 2023. “They don’t want to have a decision that requires them to pay, even though they’re paying,” he remarked. “Certainly it makes it interesting, to say the least, in the context of the union’s claim on behalf of members.”
When questioned about the timing of these payments, a spokesperson for the Education Department stated that they were seeking clarity on their superannuation obligations, as ATO guidance on the matter had evolved. They declined to comment further, citing the ongoing court proceedings.
Broader Industrial Context
This superannuation dispute unfolds against a backdrop of significant wage negotiations within the state’s public school system. The government is facing substantial pay increases for public school staff, following extensive negotiations and industrial action, with a pay rise offer of up to 32 per cent currently awaiting endorsement from union members.
Despite the potential financial implications for the government should the court rule in the AEU’s favour, Mr Mullaly expressed confidence. “Well, when you underpay workers and you don’t do that in the right way under the law, you don’t have a choice,” he asserted.
Ms Perkins echoed the sentiment that fair payment is a fundamental employer obligation. “There’s always the ‘we don’t have enough money’ [argument]. But I think that if you are an employer you have a duty to pay people’s superannuation contributions,” she insisted. “It’s part of the deal.”
