FIFO And John Holland

Understanding the John Holland's Case and Its Implications for FIFO Workers

The John Holland's case, formally known as John Holland Group Pty Ltd v FCT [2015] FCAFC 82, is a landmark decision that has significant implications for FIFO (Fly-In Fly-Out) workers and the tax deductibility of their travel expenses. Let’s look into the details of this case, what can be learned from it, and how FIFO workers can structure their travel to comply with the decision.

The John Holland Case: Key Points

1. Case Background:

   • John Holland Group Pty Ltd employed FIFO workers for a rail construction project near Geraldton, WA.
   • Workers traveled from their homes to Perth Airport at their own expense.
   • From Perth Airport, John Holland arranged and paid for flights to Geraldton Airport, the nearest airport to the work site.
   • The reverse travel arrangements were in place for employees to return home.

2. Court's Findings:

   • The Full Federal Court found that the employees were rostered on duty from the time they arrived at Perth Airport.
   • Travel between Perth Airport and Geraldton Airport was considered part of their work duties, not merely commuting.
   • Employees were under the employer’s direction and control during this travel period.
   • As a result, the travel expenses between these points were deductible.

3. 'Otherwise Deductible Rule':

   • The court ruled that the travel costs would have been deductible to the employees if they had incurred them directly.
   • Consequently, these costs were ‘otherwise deductible’ to John Holland, reducing the taxable value of the fringe benefits provided.

Lessons Learned and Application for FIFO Workers

1. Establishing a Transit Point:

• Key Takeaway: Designate a specific transit point (e.g., an airport) from which you are considered to be rostered on duty.
• Application: Ensure your employment contract specifies that you are rostered on from a particular transit point, and all subsequent travel is organised by your employer.

2. Employer Control and Direction:

• Key Takeaway: You must be under the employer’s control and direction during the travel period for it to be considered work-related.
• Application: Your employer should have clear policies and a code of conduct that apply during travel. You should be subject to disciplinary actions for breaches during this period.

3. Paid Travel Time:

• Key Takeaway: You should be paid for the travel time from the transit point to the work location.
• Application: Your employment terms should include payment from the time you check in at the transit point.

4. Consistency in Travel Arrangements:

• Key Takeaway: Consistent and regular travel arrangements similar to those in John Holland’s case strengthen the argument for deductibility.
• Application: Ensure your travel arrangements are consistent and documented, with clear records of check-in times and employer-organized travel.

Structuring Travel to Comply with John Holland’s Decision

1. Employment Contract Specifications:

• Clearly define in your contract that you are rostered on from a specific transit point.
• Include clauses that specify employer control and payment from the transit point.

2. Documented Travel Policies:

• Have your employer provide detailed travel policies that outline control measures, conduct expectations, and disciplinary actions during travel.

3. Record Keeping:

• Maintain meticulous records of your travel, including check-in times, boarding passes, and any employer communications or directives during travel.

4. Consistent Travel Patterns:

• Ensure your travel arrangements are consistent and regular, reflecting a structured pattern similar to the John Holland case.

Gotax’s Deduction Grabber App

To assist with managing and documenting your travel expenses, consider using the Gotax Deduction Grabber App. This app includes all the logbooks and tax expense recording systems you need to ensure compliance with tax regulations. Scan the QR code to download and simplify your tax recording process.

Gotax Advice

Understanding and applying the principles from the John Holland case can significantly impact the tax deductibility of your travel expenses as a FIFO worker. Always keep detailed records, ensure your employment terms align with the court’s findings, and consult with a tax professional to maximize your tax refund.

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