Private ruling: Superannuation Guarantee
Date of advice: 30 September 2025
Published: 24 November 2025
Date scheme commenced: 1 July 20XX

Ruling: Q1: Are the Paid Participants employees of the Principal under subsection 12(1) of the Superannuation Guarantee (Administration) Act 1992 (SGAA)? | A1: No. | Q2: Are the Paid Participants employees of the Principal in accordance with subsection 12(3) of the SGAA? | A2: Yes. | Q3: Are the Members of the Committee employees of the Principal in accordance with subsection 12(9) of the SAGG? | A3: No.

Relevant facts and circumstances: The Principals plan identifies peer work as a priority area for improving system performance. The Principal recognises contributions made by people who have a first-hand experience of relevant conditions. The policy (the Policy) offers daily pro rata payments for the person's time, payments for travel and accommodation, and reasonable reimbursement for expenses. Participation activities cover a range of individual and group formats. Upon undertaking participation and the completion of a range of forms, the individual is paid through the Principals' systems. The Terms of Reference (ToR) outlines the actions under the Principal's plan as it relates to the peer workforce of Paid Participants. However, the ToR does not outline any specific statement or guidelines for Paid Participants to adhere to or to fully integrate them into the role or the Principal's entity. Paid Participants usually have a determined timeframe for their involvement. Members of the Principal's divisions Division A was established as a specialist division located within the Principal's organisation. Division A is tasked with leading a coordinated, whole-of-governments strategy. Division C was established to support Division A, by facilitating the contribution of the Paid Participants. There are currently three roles, inclusive of the members (Members) within Division C. The Members are Paid Participants that are paid as outlined in this document.

Relevant legislative provisions: TAA 1953 Schedule 1 (12-35) | TAA 1953 Schedule 1 (12-45) | SGAA 1992 12 (1) | SGAA 1992 12(3) | SGAA 1992 12 (9)

Reasons for decision: Summary: Paid Participants as detailed above hired by the Principal are not considered employees within the ordinary or common law meaning for the purposes of subsection 12(1) of the SGAA. | Detailed Reasoning - Background: Under the SGAA, employers are required to make superannuation contributions into a complying superannuation fund or retirement savings account for the benefit of their eligible employees in accordance with minimum prescribed levels. The definition of 'employee' for the purposes of the SGAA is found in section 12, which is both a clarifying and extending provision. Subsection 12(1) of the SGAA states that 'employee' and 'employer' take on their ordinary or common law meaning. Where the relationship between the parties to a contract is not a common law employment relationship, or there is doubt in respect of the status of a person, the expanded meaning of 'employee' is contained in subsection 12(2) to 12 (11). Of relevance here is subsection/s 12(3). | Detailed Reasoning - The law: The relationship between an employer and employee is a contractual one. When a business engages a worker, generally it will either be a relationship of employment, often referred to as a contract of service, or a principal/independent contractor relationship that is referred to as a contract for services. The leading case outlining the principles governing the ordinary meaning of 'employee' is Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contacting Pty Ltd [1] ( Personnel Contracting ). The majority of the High Court in Personnel Contracting confirmed that whether a worker is an employee of a putative employer is a question of fact to be determined by reference to an objective assessment of the totality of the relationship between the parties, having regard only to the legal rights and obligations with constitute that relationship. [2] As such, the totality of the relationship is derived from the rights and obligations created by the contract [3] between the parties, construed at the time they entered into it. [4] Where the parties have comprehensively committed the terms of their relationship to a written contract, and the contract has not been varied, challenged as a sham or subject to legal or equitable relief, then it is the legal rights and obligations in that contract alone that are relevant in this analysis. [5] Evidence of subsequent conduct and work practices can only be considered in some instances, such as establishing the existence of a contract, identifying the contractual terms agreed to where the contract is wholly or partially oral, demonstrating that the contract has been varied or is a sham, and establishing evidence of other legal or equitable entitlements. [6] Where a contract is oral, evidence of the way the parties conducted themselves may be considered but only for the purposes of inferring what terms and conditions were verbally agreed to or necessarily implied into the contract. The relationship cannot be characterised based on the 'reality' of what took place over the duration of the performance of work. [7] The examination of the totality of the relationship must be considered through the focussing question of whether the worker is working in the business of the putative employer, having regard to the various employment indicia from case law. [8] In Marshall v Whittaker's Building Supply Co , [9] Windeyer J said that the distinction between an employee and an independent contractor is: "rooted fundamentally in the difference between a person who serves his employer in his, the employer's, business, and a person who carries on a trade or business of his own." The common law indicia include the level of control exerted by the putative employer, the extent of integration of the worker into the business, whether the worker is able to delegate, whether the remuneration is for a specified result, whether the worker uses their own tools and equipment, whether either party generates goodwill and the level of risk borne by each party. Importantly though, the indicia are not to be applied as if they are a mechanical checklist. [10] | Detailed Reasoning - Whether worker is serving in your business: An employee serves in the business of an employer, performing their work as a representative of that business. In contrast, an independent contractor provides services to a principal's business, but the contractor does so in furthering their own business enterprise and representing their own business. A person is not excluded from being an employee just because they also conduct their own business. [11] A person may realistically have more than one job and may both conduct their own business and be employed in someone else's business. As such, it is helpful to focus attention upon the aspects of the contractual relationship which bear more directly upon whether the worker's work was so subordinate to the employer's business that it can be seen to have been performed as an employee of that business rather than as part of an independent enterprise. [12] | Detailed Reasoning - Characterising a putative employer's business: The correct characterisation of the business being carried on by the putative employer is an essential part of determining whether the worker is working in the business of the putative employer. [13] In Personnel Contracting , the majority considered that the core of Construct's business was their promise to supply compliance labour to their customer, Hanssen. Construct's right to control the provision of Mr McCourt's labour was an essential asset of their business, which they deployed in order to fulfil contractual obligations with Hanssen. [14] | Detailed Reasoning - Presenting as an emanation of the business: Whether a worker is represented to the public as an emanation of the putative employer's business is a key consideration in determining whose business they are serving in. However, it is important to distinguish between a worker being contractually obliged to present as an emanation of the putative employer's business (such as in Hollis v Vabu Pty Ltd ( Hollis ) [15] ), and them merely choosing to do so to abide by a business' expectations (such as in ZG Operations Australia Pty Ltd & Anor v Martin Jamsek & Ors ( ZG Operations ) [16] ). | Detailed Reasoning - Control and the right to control: An employer generally has a right to control how, where and when its employee performs their work. The importance of control in this context lies not on its actual exercise, but rather in the contractual right of the employer to exercise such control. The importance of a right to control was emphasised by Kiefel CJ, Keane and Edelman JJ in Personal Contracting where they stated ...the existence of a right to control by the putative employer over the activities of the putative employee serves to sensitise one to the subservient and dependant nature of the work of the employee, so as to assist in an assessment of whether a relationship is properly to be regarded as a contract of service rather than a contract for services. A term in a contract that purports to confer a right to control must be interpreted in the context of the broader contract and the services being provided. In ZG Operations, the High Court found that a clause requiring carriage of goods 'as reasonably directed' did not confer the necessary control when viewed in context. The context indicated that ZG Operations, the engaging entity, had a power to give directions to make deliveries, but it did not have the power to direct how they should be done | Detailed Reasoning - Delegation: An unlimited, unfettered power to delegate or subcontract to others to perform the work is usually an indication that the worker is not an employee. [17] That is so even if the contractor actually does perform the work personally and had no intention of doing otherwise. In contrast, where a person is contractually required to personally perform the work, this points to the person being an employee. Personal service is generally seen as a critical feature of an employment relationship, whereas a contractor having the ability to utilise their own workforce is consistent with carrying out their own business. True delegation is differentiated from situations where the worker has delegated tasks in a supervisory capacity or has asked another colleague to take an additional shift or responsibility where the worker is unable to work. [18] In these arrangements, the worker has merely organised a substitution or shared the workload. It is not the same as the freedom of an individual to subcontract or employ others to perform the work in their own business. A subcontractor is generally paid by the worker, reflecting that they work for the worker, whereas a substitute is usually paid directly by the putative employer, without the involvement of the worker. Some contracts may provide a "limited or occasional" power of delegation where the scope and operation of the power is so narrow that the worker cannot exercise it unilaterally, for example where the putative employer needs to provide consent before a subcontractor is engaged. This factor is not inconsistent with an employment relationship [19] , as the putative employer effectively has full control over who provides the services. The case in On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 3) ( On Call ) entailed both of these circumstances. A purported power to delegate was found to be not any more than job swapping that can occur amongst casual employees, given the requirement that any replacement interpreter had be on the register and approved by On Call. [20] | Detailed Reasoning - 'Results' contracts: Where the substance of a contract is to achieve a specified result, there is a strong indication that the contract is one for services. [21] The meaning of the phrase 'producing a result' means the performance of a service by the worker for the putative employer where the worker is free to employ their own means (that is, third party labour, plant and equipment) to achieve the contractually specified outcome. The essence of the contract has to be to achieve a result and not to provide the worker's labour. Under a results-based contract, payment is often made for a negotiated fixed price on completion of the job, as opposed to an hourly rate. [22] The total fee may reflect an estimated completion time. However, a piece rate or output-based remuneration can still be consistent with an employment relationship if they are a natural means to remunerate the particular kind of task the worker is performing. [23] For example, in Commissioner of State Taxation v Roy Morgan Research Centre Pty Ltd ( Roy Morgan ), the Court found that although interviewers were only paid on the completion of each assignment, their pay was calculated by reference to their time spent, not for producing a result. [24] In Hollis , it was considered that payment to the bicycle couriers per delivery was a natural means to remunerate employees whose sole purpose is to perform deliveries, for ease of calculation and to provide an incentive to more efficiently to make deliveries. [25] | Detailed Reasoning - Tools and equipment: A worker who has been integrated as an employee into the business is more likely to be provided with the tools and equipment required for their work and be reimbursed for business expenses by the employer. This includes being given a reimbursement or allowance for the use of the worker's own assets such as a car. In comparison, independent contractors carrying on their own business often provide and pay for their own assets, tools, equipment, maintenance costs and other expenses. [26] Usually, they will have factored these costs in their overall fee or will seek separate payment for such expenses from the principal. The question of scale with respect to the cost of tools and equipment is important. Where a worker uses a substantial item or piece of equipment for which they are wholly responsible to conduct their work, the mechanical aspect of the contract outweighs the personal. [27] Equipment that is not specialised or used only for completing the contracted services, such as a mobile phone, are less likely to be considered significant. [28] | Detailed Reasoning - Goodwill and Intellectual Property: If an independent contractor performs services in the course of their own business, it would be common for the contractor to be able to generate goodwill for that business. Where a contract between a worker and putative employer prevents any goodwill from accruing for a worker's possible business, this may indicate that the worker is instead serving in the putative employer's business. | Detailed Reasoning - Risk: Generally, employers are vicariously liable for negligence and injury caused by their employees. In contrast, a principal will not be liable for negligence or injury caused by an independent contractor. Where a contract requires a worker to obtain their own insurance or indemnify the putative employer against loss arising from harm or injury caused by the worker, it may be seen as a consequence of a subjective characterisation that the contract is one for service, and as such must be considered in light of the entire contract. In On Call , although interpreters were contractually required to indemnify On Call against loss, Bromberg J found that On Call bore the ultimate financial risk for a failure by an interpreter to perform the work, having taken out its own insurance policy against claims made by clients and not financially penalising interpreters for unsatisfactory work. [29] In Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [30] , the Full Federal Court concluded although these workers were required to acquire their own public liability insurance, this one factor alone was insufficient to support a conclusion that the workers were not employees. | Detailed Reasoning - Use of labels to characterise relationship: In Personnel Contracting the High Court found that the "labels" which the parties may have chosen to describe their relationship are not determinative or even likely relevant to, the characterisation of their relationship. [31] Rather the characterisation of the relationship needs to turn on the substantial rights and duties between the parties. [32] Clauses that stem as a consequence of the parties' characterisation of their relationship will be similarly limited in their impact on the actual character, for the same reasons, for example obtaining an ABN or the provision or lack of provision of certain work entitlements. | Detailed Reasoning - Nature of the business/business integration: The Principal engages the Paid Participants with lived experience to participate in an activity that assists the Principal to develop their program. The Paid Participants are not representing the Principal but rather lending life experiences to assist in the program. A contractor would typically 'carry out the work as principal of their own business, not part of another'. [33] In this case, the Principal seeks Paid Participants to provide insights in an advisory capacity, due to personal insight, to help develop the program. The Paid Participants have the right to refuse to attend any of the individual or group consultations and this indicates a Principal and independent contractor relationship. The range of documents constituting offers and acceptances are considered to evidence the establishment of a contract between the Principal and the Paid Participants. | Detailed Reasoning - Control: No clause within the Policy or associated forms required to undertake participation, truly affords the Principal to control how the participants discharge their responsibilities. The participants choose the events they participate in. The Policy and associated forms provided by the Principal are silent on whether a participant can specifically delegate. The Policy documents and other associated forms do not include any delegation, sub-contracting, or assignment clauses and no evidence was provided that implied a right to delegate could be written into the contract. Accordingly, the Paid Participants have no delegation rights which aligns with the impracticality of engaging them for their personal lived experience and then for them to relinquish their engagement to a third party. This factor is not determinative either way and does not point towards a finding of an employee or an independent contractor. Given the lack of control the Principal purports to have over the participants role in terms of how the work is to be performed and when it is to be performed, this leans towards a finding that the Paid Participants are independent contractors rather than employees of the Principal. | Detailed Reasoning - Other common law indicia: The Paid Participants are not required to use any tools or equipment, beyond a car to be able to travel to the event or a plane ticket to fly to the event. The fact that they are reimbursed for this travel leans towards a finding that they are employees as they are treated the same way as other employees of the Principal. Further, any accommodation a participant requires is booked directly through the Principal, meaning the participant does not incur any expenses when performing their role. The Paid Participant's payments are calculated on pro-rata hourly basis with a maximum remuneration time for 1 day, and this payment is made regardless of any input/outpoint measurement. The Paid Participants are not paid for a result. They are not paid a fixed sum on completion of a particular job, but rather are paid discrete fixed pro-rata amounts for their participation time. The Paid Participants do not represent the Principal in the course of the events attended, but rather share insight of their personal experiences. However, it could generate goodwill for the Principal to engage Paid Participants who have lived experience. After comparing the facts against the above factors, in particular the integration and control elements, it is considered that, although a contract was formed based on the invitation to a Paid Participant from the Principal, and acceptance of that offer and remuneration, the Paid Participants are not employees of the Principal under subsection 12(1) of the SGAA. | Detailed Reasoning - Question 2: Are the Paid Participants employees of the Principal in accordance with subsection 12(3) of the SGAA? | Detailed Reasoning - Answer 2: Yes. | Summary: The facts and evidence provided support that the Paid Participants are employees of the Principal for the purposes of Subsection 12(3) of the SGAA. | Detailed Reasoning - The Law: For a worker to be an employee under subsection 12(3) of the SGAA, three elements must be satisfied: a. there must be a contract (written or otherwise); b. which is wholly or principally for the labour of a person; and c. that person works under that contract. For the purpose of determining if a contract is wholly or principally for the labour of a person, it is useful to identify whether the terms of the contractual relationship indicate that: d. the individual is remunerated (either wholly or principally) for their personal labour and skills e. the individual must perform the contractual work personally (that is, where there is no right to delegate, or only a limited right), and f. the individual is not contracted to achieve a result. | Detailed Reasoning - The existence of a contract (written or otherwise): Requirements for establishing a contractual relationship is already discussed above. | Detailed Reasoning - Person works under the contract: The word 'work' in subsection 12(3) takes on its ordinary meaning. The Macquarie Dictionary defines 'work' as a verb to mean 'to do work, or labour; exert oneself.' Where a person has provided the agreed services in accordance with the contract, the person has worked under the contract. Where a person has a right to delegation and has in fact delegated their work to someone else, it is less likely that the person has worked under the contract. | Detailed Reasoning - Application: A contract can be considered as formed as the invitation by the Principal to a Paid Participant to attend a specific activity for up to 5 hours in exchange for remuneration and reimbursement of travel expenses or any other 'reasonable' expenses would be considered an offer. The lodging of the forms by the Paid Participant to receive their remuneration and reimbursement would be their acceptance. The Principal has provided the Paid Participants with a dispute process if the Paid Participants feel that the Principal has not upheld their obligations. This suggests an intention to be bound. Offer, acceptance and consideration is present for the formation of a contract. It follows that a written contract was established, and the Paid Participants worked under a contract. | Detailed Reasoning - Wholly or principally for the person's labour: A person's labour can include mental and artistic effort, as well as physical toll. [34] The words 'wholly' and 'principally' take on their ordinary meaning. The Macquarie Dictionary defines the word 'wholly' to mean 'entirely; totally; altogether; quite.' To the extent that a contract is partly for labour and partly for something else (for example, the supply of goods, materials or hire of plant or machinery), it will only meet the provision if it is 'principally' for labour. The word 'principally' is defined by the Macquarie Dictionary as 'chiefly; mainly.' The Commissioner of Taxation has published Taxation Ruling 2023/24 (TR 2023/24) which states at paragraph 102: 102 - A contract is not wholly and principally for the labour of a person where: • The contract leaves the worker free to do the work themselves or to employ another person to carry it out (that is, the contract contains a right to delegate, subcontract or assign the work), or • the contract is for the provision or production of a result and the worker is paid for that result (that is, results contracts), or • the contract is principally for a benefit other than the labour of the worker (for example, the contract is principally for the provision of equipment). | Detailed Reasoning - Benefit derived by the putative employer: The case of Dental Corporation v Moffet ( Moffet ) provides guidance as to determining whether the contract is wholly or principally for the labour of the individual engaged. Specifically, the question must be answered from the perspective of the person obtaining the benefit of the labour (i.e. the quasi-employer). [35] In Moffet , Perram and Anderson JJ considered that the Services Agreement provided Dental Corporation, the putative employer, with two sets of benefits: [36] "... One related to Dr Moffet's personal services as a dentist, as a practice manager, as a consultant both in relation to the administration of the practice but also in relation to fees and as a maintainer of medical records (i.e. the 'Dentistry Services' contained in Sch 1). The other was his promise that the practice would achieve a minimum cash flow which was backed up by a right in Dental Corporation to reduce his monthly drawings by 50% until any shortfall was made good." Dr Moffet's obligation to provide personal services as a dentist and manager was 'for labour', whereas the promise to achieve the minimum cash flow was not. [37] The two benefits were so intertwined that they had to be dealt with together, where the requirement to provide minimum annual cash flows could not be met without Dr Moffet carrying out his services. [38] For that reason, the Services Agreement was, from Dental Corporation's perspective, wholly or principally for Dr Moffet's labour. [39] It was substantially for that purpose [40] , notwithstanding that the contract also provided a secondary, non-labour benefit. | Detailed Reasoning - Contract for a result: Where the substance of a contract is to achieve a specified result, there is a strong indication that the contract is not wholly or principally for the person's labour, but rather for the worker to produce the result they have contracted to produce. While the worker may perform labour, they do so for their own purposes to achieve the contracted result. [41] A contract is for the production of a given result where the worker is free to employ their own means (that is, third party labour, plant and equipment) to achieve the contractually specified outcome. The essence of the contract has to be to achieve a result and not wholly or principally to provide the worker's underlying labour that produces the result. Where a worker uses a substantial item or piece of equipment for which they are wholly responsible to conduct their work, the contract may be better described as for a result that entails the specific use of the item. [42] In other circumstances, the contract may be for the sum of multiple components that involve both labour and equipment, but the use of the equipment is so significant that the labour is no longer principal. This contract would not be wholly or principally for the worker's labour even if it is not for a result. Under a results-based contract, payment is often made for a negotiated fixed price on completion of the job, as opposed to an hourly rate. [43] The total fee may reflect an estimated completion time. However, a piece rate or output-based remuneration can still be consistent with an employment relationship if they are a natural means to remunerate the particular kind of task the worker is performing. [44] For example, in Commissioner of State Taxation v Roy Morgan Research Centre Pty Ltd ( Roy Morgan ), the Court found that although interviewers were only paid on the completion of each assignment, their pay was calculated by reference to their time spent, not for producing a result. [45] In Hollis , it was considered that payment to the bicycle couriers per delivery was a natural means to remunerate employees whose sole purpose is to perform deliveries, for ease of calculation and to provide an incentive to more efficiently to make deliveries. [46] As such the contractual relationship as a whole must still be considered to determine whether the legal rights and obligations in contract demonstrate an intention to wholly or principally engage labour to serve in the putative employer's business or to obtain a result. | Detailed Reasoning - Worker must perform the work personally: Subsection 12(3) requires the contract to be for the worker's labour specifically. An unlimited, unfettered power to delegate or subcontract to others to perform the work is usually an indication that the worker is not required to perform the work personally. [47] That is so even if the contractor actually does personally perform the work and had no intention of doing otherwise. Even if a contract is "for labour", an unrestricted delegation power indicates that the contract is not for the worker's labour. Some contracts may provide a "limited or occasional" power of delegation where the scope and operation of the power is narrow and the worker cannot exercise it unilaterally, for example where the putative employer needs to provide consent before a subcontractor is engaged. The putative employer effectively has full control over who provides the services, and the contract more clearly contemplates that it would primarily be the worker who does the work. Thus, a limited delegation power may indicate that while the contract is not wholly for the worker's labour, it is still principally for their labour. True delegation is differentiated from situations where the worker has delegated tasks in a supervisory capacity or has asked another colleague to take an additional shift or responsibility where the worker is unable to work. [48] In these arrangements, the worker has merely organised a substitution or shared the workload. It is not the same as the freedom of an individual to subcontract or employ others to perform the work in their own business. A subcontractor is generally paid by the worker, reflecting that they work for the worker, whereas a substitute is usually paid directly by the putative employer, without the involvement of the worker. The case in On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 3) (On Call) entailed both of these circumstances. A purported power to delegate was found to be not any more than job swapping that can occur amongst casual employees, given the requirement that any replacement interpreter had be on the register and approved by On Call. [49] | Detailed Reasoning - Wholly or principally for the persons labour: As determined under TR 2023/24 at paragraph 107 and 108: 107: A contract will not be wholly or principally for the labour of a worker where the contract is properly characterised as being for the provision of a result. That is, the essence of the contract must be to achieve a specified result and not to do work. Where the contract is genuinely for the provision of a result, the worker will not fall within the extended definition of 'employee' under subsection 12(3). 108: To the extent that a contract is partly for labour and partly for something else, for example, the hire of plant or machinery, whether the contract is principally for the worker's labour will be a question of fact. This involves an evaluation of the terms of the relevant contract or contracts, and is assessed by reference to the benefit or benefits that the engaging entity receives out of the bargain The Paid Participants are engaged to provide insights and guidance from a personal lived experience. This indicates that the Paid Participants are engaged in an advisory role and the sharing of their insights and guidance from their personal lived experience is what they are renumerated for. This in turn helps the Principal deliver better targeted and more responsive services and initiatives. The Paid Participant is paid after completion of each activity, the payment is calculated by reference to their time spent, not the result or outcome of the activity. Therefore, it is not considered that the Paid Participants are engaged to provide a result, but rather they are engaged for their labour. | Detailed Reasoning - Contract for a result: The Paid Participants payments are calculated on pro-rata hourly basis with a maximum remuneration time for 1 day being 5 hours, and that this payment is made regardless of any input/outpoint measurement, the Paid Participants are not paid for a result. They are not paid a fixed sum on completion of a particular job, but rather are paid discrete fixed pro-rata amounts for their participation time. Further support for this view is that the Paid Participants are paid for travel and accommodation costs and also reimbursed for any reasonable associated out of pocket expenses, in contrast to a contractor who would factor these costs into their contract price. The Policy and other associated forms do not include any delegation, sub-contracting, or assignment clauses and no evidence was provided that an implied a right to delegate could be written into the contract. Accordingly, the Paid Participants have no delegation rights which aligns with the impracticality of engaging them for their personal lived experience and then for them to relinquish their engagement to a third party. The benefit under the arrangements from the perspective of the Principal was that of labour. In summary, a contract was established, the Paid Participants work under that contract, and the contract is wholly or principally for the labour of the Paid Participants. Accordingly, the 3 elements necessary for the Paid Participants to be employees under subsection 12(3) of the SGAA are satisfied. | Detailed Reasoning - Question 3: Are members of the Committee for an internal Division (Members) engaged by the Principal, employees in accordance with subsection 12(9) of the SGAA? | Detailed Reasoning - Answer 3: No. | Summary: The facts and evidence provided support that the Members of the Committee are not considered employees of the Principal for the purposes of subsection 12(9) of the SGAA. The classification of a person as an employee for the purposes of the SGAA is not solely dependent upon the existence of a common law employment relationship. While the definition includes persons who at common law would be regarded as employees, it also extends to other members and persons as follows. | Detailed Reasoning - 12(9) [ Employees of Commonwealth, State, Territory]: A person who: (a) holds, or performs the duties of, an appointment, office or position under the Constitution or under a law of the Commonwealth, of a State or of a Territory; or (b) is otherwise in the service of the Commonwealth, of a State or of a Territory (including service as a member of the Defence Force or as a member of a police force); is an employee of the Commonwealth, the State or the Territory, as the case requires. However, this rule does not apply to a person in the capacity of the holder of an office as a member of a local government council. Under Paragraphs 132-133 of the TR 2023/4: 132 - A person who holds, or performs the duties of, an appointment, office or position under the Constitution or under a law of the Commonwealth, of a State or of a Territory is an employee by virtue of paragraph 12(9)(a). Similarly, a person who is otherwise in the service of the Commonwealth, a State or a Territory, including service as a member of the Defence Force or as a member of the police force, is an employee of the Commonwealth, State or the Territory, as the case requires under paragraph 12(9)(b). 133 - The wording in subsection 12(9) is very similar to the wording contained in paragraphs 12-45(1)(b), (c), and (d) of Schedule 1 to the TAA. Taxation Ruling TR 2002/21 Income tax: Pay As You Go (PAYG) Withholding from salary, wages, commissions, bonuses, or allowances paid to office holders provides comprehensive guidance on the interpretation of the wording contained in those paragraphs. A similar interpretation applies for the purposes of interpreting subsection 12(9). Taxation Ruling TR 2002/21 Income tax: Pay as You Go (PAYG) Withholding from salary, wages, commissions, bonuses or allowances paid to officers (TR 2002/21) discusses PAYG withholding from salary, wages, commissions, bonuses or allowances paid to office holders. Paragraph 14 of TR 2002/21 states an individual is considered to appointed or engaged under an Act where you can identify either: • the particular office, position or appointment or • the constitution of the relevant body (such as a panel, board committee or tribunal) to which the individual has been appointed Further, paragraph 15 of TR 2002.21 states that the appointment, office or position must also exhibit the following characteristics of an office holder: • Independent existence: the office must exist regardless of the individual who occupies the office from time to time - this is, if the individual currently occupying the office vacates that office, the office must continue to exist to be filled by another individual • duties, functions, responsibilities or powers: The office must have identifiable duties, functions, responsibilities or powers other than a mere advisory function. These features of the office (or of the panel, board, committee or tribunal to which the individual has been appointed) would usually be specified in the relevant legislation or statutory instrument • the relevant duties, functions, responsibilities or powers must attach to the office itself, rather than the individual who occupies the office Paragraphs 17-18 of TR 2022/21 discusses about common law office holders, who are otherwise in the service of the Commonwealth, a State or a Territory. 17. The common law has identified two types of individuals in the service of the Crown: • office holders; and, • common law employees of the Crown. 18 . Payments to common law employees of the Crown are subject to PAYG withholding under section 12-35 in Schedule 1 to the TAA. Payments to office holders whose office is under the Constitution, or an Australian law are covered by paragraph 12-45(1)(b) in Schedule 1 to the TAA. Payments to individuals in other offices, such as police officers, military officers and members of Parliaments or local governing bodies are specifically subject to PAYG withholding under paragraphs 12-45(1)(a), (c) and (e) in Schedule 1 to the TAA. Therefore, the only office holders who are not already covered by the previously mentioned withholding events are common law office holders. Additionally, paragraph 19 of TR 2002/21 states: 19. A common law office holder would come within paragraph 12-45(1)(d) in Schedule 1 to the TAA where the office has the characteristics mentioned in paragraph 15 of this Ruling and is not an office under the Constitution or an Australian law. TR 2002/21 also makes specific comment on whether Advisory Committee members are office holders under the Constitution or an Australian Law. Paragraphs 146 and 147 of TR 2022.21 state: 146. Advisory committees may be established, often through the exercise of a statutory power, by a person or statutory body to provide advice on matters referred to the committee. The positions, duties and functions of the committees are not covered by a statute, nor is there a relationship created with the Crown itself. They are at the discretion of the person or body that establishes the committee and would be covered by the contract with the committee members. As such, the positions do not have an independent existence and cannot have powers, duties or functions attached to the positions. 147. Therefore, members of these types of committees would not be statutory or common law office holders The example in paragraphs 100 and 101 of TR 2002/21 explains why Advisory Committees are not in the nature of the functions or duties which would be exercisable by a statutory or common law office holder. 100. Section 20B of the Marketing of Potatoes Act 1946 (WA) states that: The corporation may establish consultative groups of persons for the purpose of considering and advising the Corporation on, any matter relating to the performance of the functions of the Corporation that is referred to them by the Corporation... 101. Persons appointed to those consultative groups wound not be considered covered by paragraphs 1245(1)(b) or (d) in Schedule 1 to the TAA. The Marketing of Potatoes Act 1946 does not specify actual positions which members of consultative groups can occupy, and the constitution of the group may vary from time to time as the members are appointed on an ad hoc basis without tenure of appointment. There are no duties, powers or functions which attach to the position itself. The positions, duties and functions are at the discretion of the Corporation and would be covered by the contract between the Corporation and the individual engaged on the advisory group. The individual's engagement will be governed by contract between the parties - that contract will either be a common law employment contract or an independent contract. The functions or duties which the consultative group performs - that is, an advisory function - are not in the nature of the functions or duties which would be exercisable by a statutory or common law office holder. | Detailed Reasoning - Application of the law: Members need to satisfy the criteria stated in paragraphs 14 and 15 or 19 of TR 2022/21 to be considered an office holder. Accordingly, it is necessary to consider whether the Member holds, or performs the duties of, an appointment, office position under the Constitution or an Australian law or whether the Member is otherwise in the service of the Commonwealth, a State or a Territory. Based on the facts, the Members' positions do not align with any of these requirements. Members may be asked to provide input into other work regarding peer workforce for the Principal and they do not have a role in any dispute resolution. The role of the Committee is to provide a high-level dialogue between the Principal, peer workforce and representative associations on significant issues in the industry. Additionally, from a governance perspective, the Committee holds no power to make any directives or decisions, and its remit is advisory in nature only which aligns with the operation of the Advisory Committees as discussed on paragraphs 100, 101, 146 and 147 of TR 2002/21. Therefore, the Members of the Committee are not considered employees under subsection 12(9) of the SGAA, however, as the Members of the Committee fall under the same policy as the Paid Participants, they would be considered employees under subsection 12(3) of the SGAA. [1] Personnel Contracting [2022] HCA 1. [2] Personnel Contracting at [61] and [172-173]. [3] Personnel Contracting at [60], [124] and [173]. [4] Personnel Contracting at [174]. [5] Personnel Contracting at [43], [59] and [173]; WorkPac Pty Ltd v Rossato [2021] HCA 23 at [56-57] and [63]. [6] Personnel Contracting at [54], [59] and [177]. [7] Secretary, Attorney-General's Department v O'Dwyer [2022] FCA 1183. [8] Personnel Contracting at [36-39], [61-62], [121], [173] and [183]. The relationship may be affected by statutory provisions and by awards made under statutes ( Personnel Contracting at [41]). [9] (1963) 109 CLR 210 at [217]. [10] Personnel Contracting at [34]. [11] Personnel Contracting at [181]. [12] Personnel Contracting at[39]. [13] Personnel Contracting at [70-71], [89] and [200]. [14] Personnel Contracting at [89]. [15] Hollis 2001 ATC 4508 at [50-52]. [16] ZG Operations at[32-33] and[52-53]. [17] Australian Mutual Provident Society v Chaplin and Anor (1978) 18 ALR 385 at [391]. See also Neale (DFC of T) v Atlas Products (Vic) Pty Ltd (1955) 94 CLR 419 at[425]. [18] On Call [2011] FCA 366 at [105] and [253]. [19] Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] 2 QB 497 at 515, cited with approval in On Call at [283]. [20] On Call at [253]. [21] World Book (Australia) Pty Ltd v FC of T 92 ATC 4327 at [4334]. [22] For example, in Stevens . [23] Hollis at [54] [24] Roy Morgan (2004) SASC 288at [42]. [25] Hollis at [4520]. [26] Stevens at [12]. [27] ZG Operations at [88]. [28] Hollis at[56]. [29] On Call at [290]. [30] [2015] FCAFC 37. [31] Personnel Contracting at [58], [63], [127] and [184]. [32] Personnel Contracting at[66]. [33] TR 2023/4 at [39]. [34] Deputy Commissioner of Taxation v Bolwell (1967) 1 ATR 862 at 873. [35] Moffet [2020] FCAFC 118 at [96-97]. [36] Moffet at [100]. [37] Moffet at[101]. [38] Moffet at[103]. [39] Moffet at [104]. [40] Ibid. [41] World Book at [4334]. [42] ZG Operations at [88]. See also Humberstone v Northern Timber Mills (1949) 79 CLR 389. [43] For example, in Stevens . [44] Hollis at [54]. [45] Roy Morgan (2004) SASC 288 at [42]. [46] Hollis at [4520]. [47] Australian Mutual Provident Society v Chaplin and Anor (1978) 18 ALR 385 at [391]. See also Neale (DFC of T) v. Atlas Products (Vic) Pty Ltd (1955) 94 CLR 419 ( Neale ) at [425]. [48] On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 3) [2011] FCA 366 ( On Call ) at [105] and [253]. [49] On Call at [253].