Private ruling: Status of worker
Date of advice: 29 June 2022
Published: October 2022

Ruling: Q1: Are the volunteer roles listed below your common law employees under subsection 12(1) of the Superannuation Guarantee Administration Act 1992 (SGAA)? • Presenter • Course Leader (Assignment Writer) • Course Leader (Tutorials) • Course Leader (Exam Writer) • Independent Examiner • Exam Marker • Presentation Marker • Assignment Marker • Exam Scrutineer and • Assignment Scrutineer | A1: No. | Q2: Are the three volunteer roles below considered to be your employees by the expanded definition contained in subsection 12(3) and 12(8) of the SGAA? • Chief Examiner • Course Leader (Discussion Forum Moderator) and • Assistant Examiner | A2: Yes.

Relevant facts and circumstances: The Institute is a non-profit organisation. The Institute provides a range of education courses for its members. One particular program is designed to teach students to apply technical skills to a range of problems across different business and organisational environments. To facilitate the course content, the Institute are reliant on volunteers qualified in the area to provide their skill, expertise, and commercial experience in developing the next generation. Volunteers fill the following roles: • Presenter • Chief Examiner • Course Leader (Assignment Writer) • Course Leader (Tutorials) • Course Leader (Exam Writer) • Course Leader (Discussion Forum Moderator) • Independent Examiner • Assistant Examiner • Exam Marker • Presentation Marker • Assignment Marker • Exam Scrutineer; and • Assignment Scrutineer. Volunteers are paid for their services. The volunteer signs an agreement to supply their services. There are formal contracts in place between the Applicant and the volunteers for all roles except for the Exam, Presentation and Assignment Markers and Exam and Assignment Scrutineers. The arrangements in place for those roles are agreed via return email. The Volunteer must not subcontract to any person the performance of any of his or her obligations without the Institutes prior written consent. Nothing in the agreement creates a joint venture, partnership, or the relationship of principal and agent, or employee or employer between the parties, and no party has the authority to bind the other party by a representation, declaration, or admission, or to make any agreement or commitment on behalf of the other party. Due to the level of salary earned by the volunteers whilst working in their primary roles the volunteers have reached the concessional cap for superannuation contributions paid through their principal source of income. The payments received for the volunteer roles are low. Fee structure for each role is set out below. Presenter: Fees for services are in relation to each course iteration. If the role and responsibilities are shared between the two individuals this amount will be split accordingly for the services provided. The role is broad; however, it can be clearly identifiable within the required services that they are delivering a specific result in the context of the course (e.g., provision of marked assignment records, provision of written feedback, review of case study assessments and marking guides and marking of case study examinations. Role Service Presenter Presentation of post course assignment and specific marking guide Marking of post course assignment (per case marked) Presentation of case study/session(s) at residential course ($1,100 per stream) Chief Examiner: Chief examiners and assistant examiners are paid from an examiners pool for the course. The combined examiner pool available for the course will be determined based on the following model each semester. Role Service Chief Examiner Base amount for course Number of students enrolled in course Number of exam performance interviews conducted Course Leader, Assignment Writer: The fees payable to the volunteer for the services are, in relation to each course iteration. Course leaders are engaged by the Institute to provide specific services, with correlating deliverables. For e.g., the Course Leader, Assignment Writer is required to prepare assignment questions and solutions for the Chief Examiner to review. Role Service Course Leader (assignment Writer) Course Leader assignment writer Course Leader, Tutorials: The fees payable to the Volunteer for the services are in relation to each course iteration. Course leaders are engaged by the Institute to provide specific services, with correlating deliverables. Role Service Course Leader (tutorials) Delivery of three tutorials sessions Course Leader, Exam Writer: The fees payable to the Volunteer for the services are in relation to each course iteration. Course leaders are engaged by the Institute to provide specific services, with correlating deliverables. Role Service Course Leader (exam writer) Exam writer three LAQ's Independent Examiner: The fees payable to the Volunteer for the services are in relation to each course iteration. The role of Independent Examiner is to provide an independent assessment of whether the standards of assessments for a subject is in line with standards and whether the marking process has resulted in equitable outcome for students in the subject. In doing so, the Independent Examiner is required to provide their observations, recommendations, and conclusions, to be included in the Chief Examiner's report. Role Service Independent Examiner Independent Examiner Course Leader, Discussion Forum Moderator: The fees payable to the Volunteer for the services are in relation to each course iteration. Role Service Course Leader (Discussion forum moderator) Discussion forum moderator Assistant Examiners: Assistant Examiners are paid from an examiners pool for the course. The combined examiner pool available for the course will be determined based on the following model each semester. Role Service Assistant Examiner Base amount for the course Number of students enrolled in the course Number of exam performance interviews conducted Exam Marker The role of Markers is to perform marking services, with the deliverable in each instance being the marked exam. Role Service Exam Marker Script for CAP Fellowship Enrolments for courses Presentation Marker The role of Markers is to perform marking services, with the deliverable in each instance being the marked presentation. Role Service Presentation Marker Per presentation Assignment Marker The role of Markers is to perform marking services, with the deliverable in each instance being the marked assignment and formal assignment feedback. Role Service Assignment Marker Per script Exam Scrutineer The Scrutineers are engaged by the Institute to attempt questions under exam conditions and provide feedback within the prescribed "Part III Scrutineer Feedback template". Role Service Exam Scrutineer Per exam Assignment Scrutineer The Scrutineers are engaged by the Institute to attempt questions under assignment conditions and provide feedback within the prescribed "Part III Scrutineer Feedback template". Role Service Assignment Scrutineer Per assignment The amount paid to the volunteer does not commensurate to their labour and skill. In their professional careers, they are remunerated significantly higher rates, relative to their professional skills and experience. It is not their principal source of income. Professionals are paid on an hourly basis. The fee structure for the volunteer is one of the following: The volunteers do not receive any paid leave entitlements such as sick leave or annual or long service leave. Volunteers are not precluded from delegating the work to others who are suitably qualified persons. Whilst this is generally not intended given the highly qualified nature of the role, it is conceivable that some volunteers may delegate their services where a suitable replacement is available that has the requisite skill, expertise and commercial experience required. In practice this is unlikely to occur. If an individual is unable to perform a task or duty Volunteers are not required to work set hours. For example, Exam, Assignment and Presentation Markers are given three weeks to mark their allocations. Similarly, exam and assignment writers are given up to four months to complete their work. Aside from the required completion period, there is no set hours of work that applies to the markers and writers (i.e., they can start and finish whenever they choose, within the required completion period). There are some aspects of volunteer roles which may require adherence to set hours. For example, Course Leaders (Tutorials) are required to deliver three tutorials per semester in line with the tutorial timetable. There are sufficient processes in place within each of the roles to mitigate adverse decision making or unfair assessment, for example the sequence of checking and review by each marker prior to finalising an exam result. If it is proven that defective or inaccurate delivery or marking did occur, it is reasonable to conclude that the Institute would have a recourse of action against the volunteer actuaries. The ultimate responsibility for defective or inaccurate marking or presenting lies with the Applicant. All the courses are offered online. The majority of the roles performed by the volunteers allows for flexibility to work from home and there is no need to conduct the services at the Applicants premises or at a location determined by the Institute. There are however certain roles that require services to be performed at the Applicants premises (e.g., Presenter).

Relevant legislative provisions: Superannuation Guarantee Administration Act 1992 subsection 12(1) | Superannuation Guarantee Administration Act 1992 subsection 12(3)

Reasons for decision: Summary: The facts and evidence suggest that the workers are not your employees for the purposes of the SGAA under the common law test. | Detailed Reasoning - Detailed reasoning: The SGAA requires that an employer must provide the required minimum level of superannuation support for its employees (unless the employees are exempt employees) or pay the Superannuation Guarantee Charge (SGC). There is no legal definition of 'volunteer' for tax purposes, a volunteer does not work under a contractual obligation for remuneration and would not be an employee or independent contractor. As the word 'volunteer' is not defined in the legislation it takes on its ordinary meaning. The Macquarie dictionary defines 'volunteer' as ' someone who enters into any service of their own free will, or who offers to perform a service or undertaking for no financial gain'. [1] Often, volunteers are not remunerated by the regular payment of fixed sums, but have their expenses reimbursed. The volunteers are not obliged to work, the hours that they work are subject to their own control, they do not receive any paid holidays, and no tax is deducted from the payments made to them. The 'volunteers' of the Applicant do not meet the criteria of a volunteer as they are receiving amounts of renumeration and are bound by contractual obligation. While the term 'employee' which is defined in section 12 of the Superannuation Guarantee Administration Act 1992 ( SGAA), includes common law employees, it also extends to include workers who are engaged under a contract wholly or principally for their labour. This employment relationship is often referred to as a 'contract of service'. This relationship is distinguished in Superannuation Guarantee Ruling SGR 2005/1 Superannuation guarantee: who is an employee? from a 'contract for service' which is typically a contractor and principal type of relationship and does not attract an SGC liability. Therefore, it is necessary to consider not only whether there is a common law relationship of employer/employee between the parties, but also, if the common law test is not met or is inconclusive, whether the extended definition of 'employee' in subsection 12(3) of the SGAA applies. If a worker is not an employee under subsections 12(1) or 12(3) of the SGAA, their status is described as an independent contractor and there is no SG obligation. SGR 2005/1 is currently being reviewed considering the decisions of the High Court of Australia in Construction, Forestry, Maritime, Mining and Energy (CFMMEU) v Personnel Contracting Pty Ltd (Personnel) and ZG Operations Australia Pty Ltd v Jamsek (Jamsek). The ruling provides that the relationship between an employer and employee is a contractual one, and, is often referred to as a contract of service. Such a relationship is typically contrasted with the independent contractor/contractor/principal relationship that, at law, is referred to as a contract for services. An independent contractor generally contracts to achieve a result whereas an employee contracts to provide their labour (typically to enable the employer to achieve a result). An independent contractor works in their own business (or on their own account) while an employee works in the service of the employer. The task of defining the characteristics of the contract of service - the employment relationship - has been the subject of much judicial consideration. As a result, some general tests have been developed by the courts to assist in the determination of the nature of the relationship. However, the recent high court judgements mentioned above have determined that the multifactorial approach causes uncertainty for both the parties involved and the courts and that it is more appropriate that we consider the totality of the relationship between the employer and the worker. Accordingly, it is necessary to determine the true nature of the whole relationship between the principal and the workers, as to whether there is a common law employer and employee relationship, or whether the workers meet the extended definition of employee under subsection 12(3) of the SGAA. The most recent decision of the High Court of Australia in Personnel and Jamsek it was determined that the most significant clarification arises in primarily examining the terms of the written contract between the parties to establish the character of the relationship, where that contract is an accurate and accepted record of the agreement struck between the parties. It is noted that in Decision Impact Statement of Personnel that it is considered that a court can look beyond the written contract and consider the conduct of the parties in circumstances where: In this case there are formal contracts in place between the Applicant and the volunteers for all roles except for the Exam, Presentation and Assignment Markers and Exam and Assignment Scrutineers. The arrangements in place for those roles are agreed via return email. An example of the email was provided on request. The email contained very little detail about conditions, pay or requirements or expectation. It outlined the role of the job and provided resources to assist in the role. For the roles with a written contract, nothing in the agreement creates a joint venture, partnership, or the relationship of principal and agent, or employee or employer between the parties, and no party has the authority to bind the other party by any representation, declaration, or admission, or to make any agreement or commitment on behalf of the other party. Payment arrangements under the agreement are by way of fixed sum on completion of the job. Once the work is completed and payment is made the agreement is terminated. The Agreement does not include or discuss paid leave entitlements, indicating this is not an employee type arrangement between the Worker and Principal. Based on that we can determine that it is the intention of the Applicant to treat the volunteers as independent contractors. | Summary: Having considered the nature of the working relationship between the parties most of the roles are not considered to be employees under the extended definition of employee contained in subsection 12(3) of the SGAA. None of the roles meet the extended definition of employee under subsection 12(8) of the SGAA. | Detailed Reasoning - Detailed reasoning: It is necessary to consider not only whether there is a common law relationship of employer/employee between the parties, but also, if the common law test is not met or is inconclusive, whether the extended definition of 'employee' in subsection 12(3) of the SGAA applies. If a worker is not an employee under subsections 12(1) or 12(3) of the SGAA, their status is described as an independent contractor and there is no SG obligation. SGR 2005/1 sets out the definition of subsection 12(3), noting that the extended scope of the SGAA beyond the traditional employment relationships to consider some independent contractors who principally provide their own labour to meet obligations under a contract. Where the substance of the contract is to produce a given result, there is a strong indication that the contract is one for services. The extended definition of employee within subsection 12(3) of the SGAA states: If a person works under a contract that is wholly or principally for the labour of the person, the person is an employee of the other party to the contract. For someone to be an employee under subsection 12(3) of the SGAA, three elements must be satisfied: 1. there must be a contract (written or otherwise). 2. which is wholly or principally for the labour of a person; and, 3. that person must work under that contract. These three elements establish a framework to determine whether subsection 12(3) operates to make an individual an employee under the SGAA (Dental Corporation v Moffett [2020] FCAFC 118). Paragraph 78 of SGR 2005/1 states that where the terms of the contract, considering the subsequent conduct of the parties, indicate that: • the individual is remunerated (either wholly or principally) for their personal labour and skills; • the individual must perform the contractual work personally (there is no right to delegate); and • the individual is not paid to achieve a result. The specific roles as listed below will be addressed in the analysis. The individual is remunerated wholly or principally for their personal labour and skills | Detailed Reasoning - Presenter: The Presenter is engaged by the Applicant to perform a broad role; however, it can be clearly identifiable within the required services that they are delivering a specific result in the context of the course (e.g., provision of marked assignment reports, provision of written feedback, review of case study assessments and marking guides and marking of case study examinations). | Detailed Reasoning - Course Leaders (Assignment Writer, Tutorials, Exam Writer): The course Leaders (Assignment Writer, Tutorials and Exam Writer) are engaged by the Applicant to provide specific services, with correlating deliverables. For example, the Course Leader and Assignment Writer are required to prepare assignment questions and solutions for the Chief Examiner to review. | Detailed Reasoning - Exam Markers, Presentation Markers and Assignment Markers: The role of Markers (Exam Markers, Presentation Markers and Assignment Markers) is to perform marking services, with the deliverable in each instance being a marked exam, assignment, or presentation and in the case of the Assignment Markers, an accompanying piece of forma assignment feedback. | Detailed Reasoning - Independent Examiner: The role of the Independent Examiner is to provide an independent assessment of whether the standards of assessments for a subject is in line with standards and whether the marking process has resulted in an equitable outcome for students in the subject. In doing so the Independent Examiner is required to provide their observations, recommendations, and conclusions to be included in the Chief Examiners report. | Detailed Reasoning - Scrutineers (Exam and Assignment): The Scrutineers (Exam and Assignment) are engaged by the Applicant to attempt questions under exam and assignment conditions and provide feedback within the prescribed "Part III Scrutineer Feedback template". The amounts paid to volunteer are not commensurate to their labour and skill. In their professional careers, volunteers are remunerated at significantly higher rates, relative to their skills and experience. The amounts paid to the volunteers by the Applicant as a result of the performance of the agreed services are not commensurate to the earnings available to them in the industry and is not the principal source of income for these individuals. In practice professionals are paid via billing on an hourly basis. The Institute pays the volunteer actuaries following the fee structure outlined below: | Detailed Reasoning - The individual performs the contractual work personally (there is no right of delegation): The formal contracts do not contain a clause precluding volunteers the ability to delegate part of or the entirety of their agreed services. Volunteers are not contractually precluded from delegating the work to others suitably qualified persons. Whilst this is generally not intended given the high-quality nature of the role, it is conceivable that some volunteers may delegate their services where a suitable replacement is available that has the skill, expertise and commercial experience required. This does not habitually occur in practice. However, there is no formal requirement for the individual to perform the contractual work personally. | Detailed Reasoning - The individual is not paid to achieve a result: The Markers (Exam, Presentation and Assignment) and Scrutineers (Exam and Assignment) are remunerated on a per script, presentation, or assignment basis. Payment is made by the Applicant to the Markers at the completion of the marking tasks (i.e., once all allocated exams, presentations and /or assignments have been marked). The Markers and Scrutineers are free to choose their working hours and the time spent on each task. In relation to the Presenter, Course Leaders (Assignment Writer, Tutorials and Exam Writer) and Independent Examiner, the services required to be provided under their contracts are to produce a specific set of results within the context of the subject. Whilst the presenter, Course Leaders (Assignment Writer, Tutorials and Exam Writer) and Independent Examiners are paid on a flat fee basis, SGR 2005/1, paragraph 46 notes that while the notion of 'payment for a result' is typically an indicator of a contract for services, it is not the only factor. These facts indicate that the above-mentioned roles are paid to achieve a result. Accordingly, they do not meet the extended definition of an employee. However, it is noted that the following roles satisfy the criteria set out in section 12(3) and superannuation guarantee is payable of payments made to volunteers in these roles. Chief Examiner Course Leader (Discussion Forum Moderator) and Assistant Examiner Finally, subsection 12(8) of the SGAA further extends the definition of employee for superannuation purposes to include: a) A person who is paid to perform or present, or to participate in the performance or presentation of, any music, play, dance, entertainment, sport, display or promotional activity or similar activity involving the exercise of intellectual, artistic, musical, physical, or other personal skills is an employee of the person liable to make payment; b) A person who is paid to provide services in connection with an activity referred to in paragraph (a) is an employee of the person liable to make payment; c) Person who is paid to perform services in, or in connection with, the making of any film, tape, or disc or of any television or radio broadcast is an employee of the person liable to make the payment. Based on the facts provided, the Commissioner considers that the roles performed by the volunteers do not fall within the specific activities listed above in subsection 12(8) of the SGAA. | Detailed Reasoning - Conclusion: The Commissioner considers that the volunteers who provide services to the Applicant are independent contractors and are not considered employees under either the common law or the ordinary meaning. In addition, subsection 12(3) does not apply as not all the criteria are met as outlined in subsection 12(3) of the SGAA. This view applies to all roles except for those in the following positions: The Commissioner does not consider the activities provided by the volunteers are the same or similar as those listed in subsection 12(8) of the SGAA. [1] Macmillan Publishers Australia, The Macquarie Dictionary online www.macquariedictionary.com.au, viewed 4 May 2022.

This advice applies for the following periods: End of financial year 30 June 20XX | Piecemeal (per item/deliverable); or | the contract is an oral contract, or is partly written and partly oral to determine when the contract was formed and the contractual terms that were agreed | the terms of the written contract have been varied | the terms of the written contract have been challenged as invalid (for example, being a sham) | a party to the contract asserts rectification, estoppel or any other legal, equitable or statutory rights or remedies