Private ruling: Status of Worker
Date of advice: 16 June 2025
Published: 4 August 2025

Ruling: Q1: Are the Workers engaged under the Independent Contractor Agreement (the Agreement), common law employees of the Engaging Entity (the Principal), under subsection 12(1) of the Superannuation Guarantee (Administration) Act 1992 (SGAA)? | A1: No. | Q2: Are the Workers engaged under the Agreement, employees of the Principal, within the expanded definition of an employee under subsection 12(3) of the SGAA)? | A2: No.

Relevant facts and circumstances: Background 1. The Principal provides services to XXX under a Delivery Contractor Agreement. 2. The Principal has also entered into Agreements with the Workers to provide services. It is these Agreements for which the Principal is seeking administratively binding advice for the status of their Workers. 3. XXX is an Australian owned corporation that provides services throughout Australia.

Relevant legislative provisions: SGAA 1992 subsection 12(1) | SGAA 1992 subsection 12(3) | Other ATO documents | Taxation Ruling TR 2023/4 Income Tax and superannuation guarantee: who is an employee

Reasons for decision: Detailed Reasoning - Question 1: Are, the Workers engaged under the Independent Contractor Agreement (the Agreement), common law employees of the Engaging Entity (the Principal), under subsection 12(1) of the Superannuation Guarantee (Administration) Act 1992 (SGAA)? | Summary: 1. Based on the agreement and facts provided, the Workers are not employees of the Principal for the purposes of the SGAA under the common law test as set out in subsection 12(1) of the SGAA. 2. An analysis of the business integration and control elements, indicates the Workers are common law employees. Both these elements are important, however neither are determinative. However, the Workers provide their own vehicles under a leasing arrangement, their payments result from a fixed unit price for delivery and they are able to delegate their work to others. On consideration of the legal rights and obligations under the Agreement, rather than an analysis of conduct throughout the Agreement period, it is evident that a Principal and independent contractor relationship exists. | Detailed Reasoning - Detailed reasoning: 3. Taxation Ruling - Income tax and superannuation guarantee: who is an employee? (TR 2023/4) provides the Commissioner's view on the meaning of employee under section 12 of the SGAA. 4. 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. 5. The definition of 'employee' for the purposes of the SGAA, found in section 12 is both a clarifying and extending provision. 6. Subsection 12(1) of the SGAA states that 'employee' and 'employer' take on their ordinary or common law meaning. 7. 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 subsections 12(2) to 12(11) is subsection 12(3). Subsection 12(1) - common law employee 8. 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. 9. 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] 10. As stated in paragraph 8 of TR 2023/4, 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] 11. 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] 12. 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] 13. As stated under paragraphs 23 and 24 of TR 2023/4, there are two steps in determining whether an employment relationship exists. The first step is to identify the contract between the parties, whether that contract be wholly in writing, wholly oral, or comprised of any combination of written terms, oral terms, and terms implied from conduct. 14. The second step is to identify the terms of the contract, that is the legal rights and obligations agreed between the parties, whether written, verbal or a combination of the two. 15. 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." 16. The various indicia of employment that have been identified in case law remain relevant but are to be considered only in respect of the legal rights and obligations between the parties. The indicia point to whether the worker is working in the business of the engaging entity or not. 17. While no factor will be determinative, the more control the engaging entity can exercise over how, when and where the worker personally performs their work under the contract, the more likely the worker is to be an employee of the engaging entity. 18. 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: 19. Paragraph 39 of TR 2023/4 explains the distinction between employee and an independent contractor. 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. 20. 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. 21. 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] 22. The ATO's response to the Personnel Contracting case is provided in a Decision impact statement (the Statement) issued on 31 March 2022, and states: The long-established employment indicia are still relevant when characterising the contractual relationship between the parties. However, they are to be considered through the focusing question or prism of whether the putative employee is working in the business of the employer. This reflects the Commissioner's understanding and application of the business integration test . The High Court has elevated that test as one of the primary and focusing aspects of the examination of the contractual terms. In addition, the High Court has continued the emphasis on the examination of control as a complementary focus to the business integration test (emphasis added). | Detailed Reasoning - Characterising a putative employer's business: 23. As stated under paragraph 41 of TR 2023/4, 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] 24. Furthermore, paragraph 42 of TR 2023/4 explains that in Personnel Contracting , the majority considered that the core of Construct's business was their promise to supply compliance labour to their customer, XXXX. Construct's right to control the provision of XXXX labour was an essential asset of their business, which they deployed in order to fulfil contractual obligations with XXXX. [14] 25. Based on the Delivery Contractor Agreement between the Principal and XXX, the Principal provides a range delivery services to XXX. 26. The Principal then forms another Agreement with the Workers, under which they are paid $XXX per delivery. The Principal and each of his Personnel must attend training. . The operation of the Workers facilitates meeting the delivery tasks and obligations of the Principal. . Presenting as an emanation of the business 27. As stated under paragraph 45 and 46 of TR 2023/4, 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. 28. 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] ). 29. In ZG Operations, the delivery drivers ordinarily wore company-branded clothing and installed tarpaulins bearing the company's logo on the trucks, but they were not contractually required to do so. As a result, the High Court held that this did not change the contractual rights which comprised the relationship between the parties. 30. Based on the 'Other Requirement' section of the Agreement, the Workers are required to display any identification provided by XXX which must be visible at all times while the Workers are on site or providing the Services. 31. This requirement is common to both the Principal and the Worker. 32. However, it is reasonable to conclude that the Workers are presenting as an emanation of the associated business of XXX, rather than as an emanation of the Principal's business. | Detailed Reasoning - Control: 33. Under paragraph 47 of TR 2023/4, an employer is usually able to control how, where and/or when its employee performs their work. The importance of control in this context lies not in its actual exercise, but rather in the contractual right of the employer to exercise such control. [17] 34. Where the main operating activity of the business is the supply of labour or a service of some kind, often a critical element of the business is the need to retain control over that labour or the workers providing the service. This was emphasised by Kiefel, Keane and Edelman JJ in Personnel Contracting : "... the existence of a right of control by the putative employer over the activities of the putative employee serves to sensitise one to the subservient and dependent 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." [18] 35. 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. A contract may afford an employer a different kind of control, such as control over how long a casual worker can work, or the clause may allow 'reasonable direction' as distinguished from a true right to control a worker. [19] 36. In some cases, a broad, unfettered right to terminate a worker's contract may confer a capacity to control that worker, as the engaging entity can use the prospect of termination as a tool to control performance. 37. Similarly, a requirement that a worker indemnify an engaging entity for damages from failing to adhere to the engaging entity's instructions or directions may give the engaging entity control. 38. Based on the Agreement, XXX conducts training as does the Principal. Further to the terms of the Agreement, the Principal advises that they recruit and supervise the Workers. 39. Under the Agreement, the Principal is able to control the Workers both directly and indirectly in a range of areas by the need for the Workers to comply with all reasonable instructions of the Principal and XXX policies and procedures. 40. Under the Agreement the Workers are required to comply with relevant health and safety, security and privacy laws, respectively. 41. Furthermore, under the Agreement, XXX and the Principal may carry out continuous, ongoing monitoring, recording and surveillance. 42. The Agreement restricts the areas to which the Workers are able to make deliveries. 43. Under the Agreement, the Workers have key performance indicators (KPI)/service levels to meet for a range of service components. 44. As such, the Principal has the right to exercise control in a number of forms. | Detailed Reasoning - Summary - business integration and control tests: 45. The control element is indicative of an employment relationship. The work performed by the Workers is central to the business of the Principal and subject to the Principal's right to exercise control on when, where and how the work is performed. 46. It is reasonable to conclude that the Workers are presenting as an emanation of the associated business of XXX, rather than as an emanation of the Principal's business. 47. Both the control and business integration elements are important, however neither of them are determinative and both involve a question of degree. ( JMC v Commissioner of Taxation [2023] FCAFC 76 at [23]). | Detailed Reasoning - Delegation: 48. 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. [20] 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. 49. 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. [21] 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. 50. 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 [22] , as the putative employer effectively has full control over who provides the services. 51. 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. [23] 52. The Agreement states that the Workers may delegate the work to their Personnel provided that the Personnel are engaged as employees. 53. Furthermore, the Agreement states that the Workers must not subcontract or otherwise assign to any other person their obligation under the Agreement. 54. Paragraph 54 and 55 of TR 2023/4 - Income tax and superannuation guarantee: who is an employee? based on JMC PTY LTD v Commissioner of Taxation [2023] FCAFC states, based on 76: 54. A critical feature of an employment relationship is the personal service of the employee; the worker themselves should be serving in the engaging entity's business. As such, the existence of a right which allows a worker to delegate, subcontract or assign their work to another , qualified or otherwise, is generally to be viewed as inherently inconsistent with an employee relationship. 55. Where a worker has an entirely unfettered right to delegate, subcontract or assign their work to others, in the absence of countervailing considerations, the existence of this right will be a very strong indicator against the worker being an employee. Where the right is fettered, the degree of inconsistency between it and the other terms of the contractual relationship between the parties will reveal the degree to which the fettered right to delegate, subcontract or assign tends against a finding of employment. (emphasis added) 55. Under the Agreement the Worker may delegate work to Personnel, fettered only by the need for the Worker to ensure that the Personnel are suitable in term of compliance with relevant laws, have passed security checks and hold a relevant current vehicle licence. 56. In these circumstances where the Worker can delegate work which is not limited in scope, there is a strong indication that the Worker will not be an employee of the Principal. There are no countervailing considerations that change this indication. | Detailed Reasoning - 'Results' contracts: 57. Where the substance of a contract is to achieve a specified result, there is a strong indication that the contract is one for services. [24] 58. 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. 59. 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. [25] The total fee may reflect an estimated completion time. 60. 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. [26] 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. [27] 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. [28] 61. The Workers are required to provide services according to XXX's performance standards (KPI), including delivery and data handling requirements, and adhere strictly to XXX's Performance Requirements. 62. The unit-rate payment is fixed. Workers will be paid the same fixed amount regardless of the time taken to provide the delivery service. 63. Accordingly, the Agreement being results based is indicative of a contract for services. | Detailed Reasoning - Tools and equipment: 64. 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. 65. In comparison, independent contractors carrying on their own business often provide and pay for their own assets, tools, equipment, maintenance costs and other expenses. [29] Usually, they will have factored these costs in their overall fee or will seek separate payment for such expenses from the principal. 66. 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. [30] 67. 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. [31] 68. Under the Contract Agreement between the Principal and the Workers, the Workers will lease all vehicles that will be used in performing the services under an Approved Leasing Agreement. 69. The need for the Worker to enter into a lease arrangement for such a significant asset is supportive of the Workers working in their own business rather than that of the Principal. | Detailed Reasoning - Goodwill and Intellectual Property: 70. 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. 71. 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. 72. The control exercised through the Agreement and the public presentation as XXX workers, indicates a difficulty for the Workers generate goodwill for their businesses. 73. Under the Agreement, the Workers acknowledge that XXX owns and will own all right, title and interest to the Intellectual Property and Materials. | Detailed Reasoning - Risk: 74. 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. 75. 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. 76. In On Call , although interpreters were contractually required to indemnify On Call against loss, XXXX 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. [32] 77. In Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd [33] , 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. 78. Based on the Agreement about Liability and Indemnity, the Workers indemnify the company and its director, officers and employees from and against losses, claims, expenses, damages and liabilities incurred. 79. This clause of the Agreement is indicative of a contract for services as it aligns with other rights and obligations that support a conclusion that the Workers are independent contractors. | Detailed Reasoning - Use of labels to characterise relationship: 80. 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. [34] Rather the characterisation of the relationship needs to turn on the substantial rights and duties between the parties. [35] 81. 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. 82. As stated in the Agreement the Workers are engaged as independent contractors. This clause has not been a material consideration in the determination of the working relationship. | Detailed Reasoning - Conclusion 12(1): 83. A degree of integration and the amount of control able to be exercised by the Principal under the Agreement indicates the Workers may be employees however the tools and equipment provided by the Workers, along with the fact they can delegate and are paid for a result means overall the Workers are considered to be independent contractors under the common law test. Therefore, the Workers are not employees of the Principal under subsection 12(1) of the SGAA. | Detailed Reasoning - Question 2: Are the Workers engaged under the Agreement employees of the Principal under subsection 12(3) of the SGAA)? | Summary: 84. Based on the Agreement and facts provided, the Workers were not employees of the Principal for the purposes of the SGAA under the extended definition as set out in subsection 12(3) of the SGAA. 85. There is a written contract under which the Workers work, however all the elements necessary to indicate that the contract is wholly or principally for the labour of the Workers are not satisfied. | Detailed Reasoning - Subsection 12(3) - contract wholly or principally for labour: 86. 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. 87. In this case there is a written contract in the form of the Agreement and the Workers work under that contract. Accordingly, elements a) and c) are satisfied. 88. Consideration of element b) 89. 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: a. the individual is remunerated (either wholly or principally) for their personal labour and skills b. the individual must perform the contractual work personally (that is, where there is no right to delegate, or only a limited right), and c. the individual is not contracted to achieve a result. | Detailed Reasoning - Wholly or principally for the person's labour: 90. A person's labour can include mental and artistic effort, as well as physical toll. [36] 91. 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.' 92. The Agreement details what components make up the payments made to the Workers. 93. The components are inclusive of all elements of remuneration that may otherwise be applicable, inclusive of those under the Road Transport Award 2010. . The rates also encompass all associated costs, including but not limited to vehicle depreciation or leasing, insurances and other costs. 94. In addition to the above, the contract fee/unit rate fee has been calculated to incorporate the superannuation guarantee contribution at the current rate of 11% or as varied from time to time in accordance with legislation requirements. 95. No evidence was provided as to the actual amounts of associated costs and as such It cannot be said with any certainty that the Agreement is wholly or principally for the Worker's labour. | Detailed Reasoning - Benefit derived by the putative employer: 96. 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). [37] 97. In Moffet , Perram and Anderson JJ considered that the Services Agreement provided Dental Corporation, the putative employer, with two sets of benefits: [38] "... One related to XXXX 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." 98. XXXX obligation to provide personal services as a dentist and manager was 'for labour', whereas the promise to achieve the minimum cash flow was not. [39] 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 XXXX carrying out his services. [40] For that reason, the Services Agreement was, from Dental Corporation's perspective, wholly or principally for XXXX labour. [41] It was substantially for that purpose [42] , notwithstanding that the contract also provided a secondary, non-labour benefit. 99. The Workers are required to enter into a lease arrangement for vehicles under the Agreement. The establishment of the lease arrangements may provide benefits to the Principal in terms of financial and asset management. The work cannot be done easily without the vehicle. Therefore, the vehicle is an integral part of what the Worker is contracted to do and this is indicative of a contract for services. | Detailed Reasoning - Contract for a result: 100. 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. [43] 101. 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. 102. 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. [44] 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. 103. 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. [45] The total fee may reflect an estimated completion time. 104. 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. [46] 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. [47] 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. [48] 105. 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. 106. The Workers are required to provide services according to XXX's performance standards (KPIs), including delivery and data handling requirements, and adhere strictly to XXX's Performance Requirements. 107. The unit-rate payment is fixed at $XXX per delivery. The time taken to deliver articles will vary from Worker to Worker, however as the payment is based on a rate for each delivery, Workers will be paid the same fixed amount regardless of the time taken to provide the delivery service. 108. Accordingly, the Agreement being results based is indicative of a contract for services. | Detailed Reasoning - Worker must perform the work personally: 109. 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. [49] 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. 110. 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. 111. 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. [50] 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. 112. 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. [51] 113. Based on of the Agreement, the Workers must not subcontract or otherwise assign to any other person their obligation under the agreement. 114. The Agreement also states that the Workers may delegate work to Personnel, fettered only by the need for the Worker to ensure that the Personnel are suitable in term of compliance with relevant laws, have passed security checks and hold a relevant current vehicle licence. 115. This indicates that the Workers do not have to perform the work personally. | Detailed Reasoning - Person works under the contract: 116. 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. 117. 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. 118. Based on the Agreement, the Workers have a contract and it states that the Workers may delegate the work to Personnel, provided they are engaged as employees. Furthermore, the contract states that the Workers must not subcontract or assign to any other person the obligation under the Agreement. Effectively, the Agreement allows the Workers to work under the Agreement or to delegate work to others. | Detailed Reasoning - Conclusion 12(3): 119. Element a) - there must be a contract and element c) the person works under that contract, are satisfied. 120. Element b) - the contract is wholly or principally for the labour of the person, is not satisfied as the Workers are remunerated for labour and associated costs, they can delegate their work, and their contract is results based. 121. As all elements a), b), and c) are unable to be satisfied, the Workers are not employees under the expanded definition of an employee under subsection 12(3). | Detailed Reasoning - Conclusion: 122. After considering the tests and all available facts and circumstances relating to the working relationship between the Principal and the Workers, the Commissioner concludes that the Workers do not meet the definition of an employee, for the purposes of the SGAA, under both the common law test and extended definition as set out in subsection 12(3) of the SGAA. 123. Therefore, the Principal does not have an obligation to provide superannuation to the Workers in accordance with 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] Zuijs v Wirth Bros Pty Ltd [1955] HCA 73; 93 CLR 561 ( Zuijs ) at [571-573]; Stevens v Brodribb Sawmilling Co Pty Ltd [1986] HCA 1; 160 CLR 16 ( Stevens ) at [9] and [15-20], per Mason J. [18] Personnel Contracting at[73]. [19] ZG Operations at[69] and [105]. [20] 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]. [21] On Call [2011] FCA 366 at [105] and [253]. [22] 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]. [23] On Call at [253]. [24] World Book (Australia) Pty Ltd v FC of T 92 ATC 4327 at [4334]. [25] For example, in Stevens . [26] Hollis at [54] [27] Roy Morgan (2004) SASC 288at [42]. [28] Hollis at [4520]. [29] Stevens at [12]. [30] ZG Operations at [88]. [31] Hollis at[56]. [32] On Call at [290]. [33] [2015] FCAFC 37. [34] Personnel Contracting at [58], [63], [127] and [184]. [35] Personnel Contracting at[66]. [36] Deputy Commissioner of Taxation v Bolwell (1967) 1 ATR 862 at 873. [37] Moffet [2020] FCAFC 118 at [96-97]. [38] Moffet at [100]. [39] Moffet at[101]. [40] Moffet at[103]. [41] Moffet at [104]. [42] Ibid. [43] World Book at [4334]. [44] ZG Operations at [88]. See also Humberstone v Northern Timber Mills (1949) 79 CLR 389. [45] For example, in Stevens . [46] Hollis at [54]. [47] Roy Morgan (2004) SASC 288 at [42]. [48] Hollis at [4520]. [49] 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]. [50] On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 3) [2011] FCA 366 ( On Call ) at [105] and [253]. [51] On Call at [253].

1. The Agreement states that the Principal is an independent contractor and must not represent or hold itself out to be, acting as, or deemed to be an employee or agent of XXX and will be responsible for the payment and provision of Employer obligation or Employee benefit. | 2. The Agreement states that the Principal must ensure that the Principal's Personnel provide services strictly in accordance with the agreement with XXX, relevant standard and laws. XXX reserves the right to engage other contractor to perform the services. | 3. The Agreement states that XXX will pay the Contract Fee and the Principal must provide all data required by XXX to determine the Contract Fee. | 4. The Agreement states that the Principal must not subcontract any of the Principal's obligations under this agreement other than in accordance with the Principal's obligations under this clause. | 5. The Agreement states that the Principal must ensure that its subcontractors are engaged as genuine independent contractor by providing their own vehicle and entering into the Approved Subcontractor Agreement (or like agreement containing the terms of the Approved Subcontractor Agreement). | 6. The Agreement states that if the Principal subcontract any of its obligation under this Agreement, the Principal must provide XXX on request: notice of Services subcontracted and details of each subcontractor, evidence that the subcontractors are bound by terms included in the Approved Subcontract Agreement, evidence that the subcontractor is providing their own vehicles, and any other document of information reasonably required by XXX. | 7. The Agreement states that if XXX is not satisfied the Principal has engaged a subcontractor as a genuine independent contractor it may direct the Principal to cease using that subcontractor to perform the services to protect its legitimate business interests. | 8. The Agreement states that notwithstanding the Principal's right to subcontract under this clause 7, the Principal remains fully responsible for the performance of Service in accordance with this Agreement and must continue to comply with all of the Principal's obligations under this Agreement. | 9. Under the Agreement, the Principal must comply with any reasonable direction from XXX that the Principal's Personnel wear XXX provided work attire and personal protective equipment. | 10. Under the Agreement, if XXX provides the Principal with the equipment, the Principal must pay the rental fee. The Principal must provide all Tools of Trade at the Principal cost. | 11. The Agreement states that the Principal and the Principal's Personnel must act so as to reasonably preserve XXX's good name and reputation including when driving vehicles and otherwise act in a courteous, safe and responsible manner. | 12. The relevant details from the Agreements between the Principal and the Workers are as follows. | 13. The Agreement states that the Workers are engaged by the Principal as independent contractors and the Workers acknowledge that the Worker and their personnel are not employees or agents of the Principal Contractor or XXX and the Workers have no authority to act as agent or any way bind or commit the Principal Contractor or XXX to any obligation of any kind. | 14. The Agreement states the Workers must ensure that they and their personnel provide and perform the Services under the terms of this Agreement, comply with any policies and procedures of the Principal Contractor and XXX, notify the Principal Contractor and XXX of any dispute or matter arises, fully comply with the obligations as prescribed in the Relevant Law and provide to the Principal Contractor and XXX upon request such evidence of the compliance with any such Relevant Law. | 15. Under the Agreement, the Workers and their Personnel must attend induction training and any other training course required by the Principal Contractor or XXX. | 16. The Agreement states that the Workers must not subcontract or otherwise assign to any other person the obligations under the agreement. The Workers may delegate work to their Personnel, provided the workers engage those Personnel as employees. | 17. Under the Agreement respectively, the Workers are required to comply with relevant health and safety, security and privacy laws, respectively. | 18. The Workers will provide vehicles required by them and their Personnel, to perform the services. Except for the items supplied by the Principal, the Workers will provide tools and equipment. If there is any damage on the equipment while it is in the Workers' control, the Workers must pay the repair or replacement cost. | 19. The Principal will pay the Worker's fee for the service provided in accordance with the Agreement. The Workers must submit to the Principal a tax invoice for their fees. The timing of invoice submission and payment are set out in the Agreement and require weekly submission of invoices and fortnightly payment by the Principal. | 20. When the Workers delegate work to Personnel, the Worker is to warrant that compliance is met with all laws relevant to terms and conditions of employment, and additionally, that taxation and superannuation obligations are met, inclusive of those under the SGAA. | 21. The Worker is to indemnify the Principal and its directors, officers and employees from and against losses (including consequential losses), claims, expenses, damages and liabilities incurred or sustained by the Principal Contractor (the company) including without limitation any taxes, fees, cost, levy, charge, fines, penalties and interest) arising from or connected with any breach of the Agreement, law, misstatement as mentioned on point (i) until (xi). | 22. Under the Agreement, the Workers acknowledge that XXX owns and will own all right, title and interest to the Intellectual Property and Materials. | 23. Under the Agreement, the Principal may terminate the Agreement without notice if the Worker suffers an insolvency event, or the Worker fails to satisfy the KPIs. | 24. Furthermore, under the Agreement, XXX and the Principal may carry out continuous, ongoing monitoring, recording and surveillance. | 25. This Agreement contains the entire agreement between the parties with respect to its subject matter and supersedes all prior conduct, agreements and understandings between the parties in connection with it. | 26. Under the Agreement, the Workers will lease all vehicles that will be used in performing the services from the Principal Contractor or Related Body Corporate under an Approved Leasing Agreement. | 27. The Agreement restricts the areas to which the Workers are able to operate. | 28. Under the Agreement, the Workers have key performance indicators (KPI)/service levels to meet for a range of service components. | 29. The Workers and their Personnel must display any identification provided by XXX which must be visible at all times while the Workers and their Personnel are on site or providing the Services. | 30. The Agreement between the Principal and the Workers, states that the Workers are paid based on the unit rate. The contract fee/unit rate fee has been calculated to include all elements of remuneration.