Private ruling: employment status of workers - Superannuation Guarantee
Published: May 2012

Ruling: Q2: Are the workers retained by the payer under the Agreement considered employees as defined in subsection 12(3) of the SGAA for the quarters commencing 1 January 2010 and ending 31 December 2012? Advice No, please refer to the Reasons for Decision

Relevant facts and circumstances: Your advice is based on the facts stated in the description of the scheme that is set out below. If your circumstances are significantly different from these facts, this advice has no effect and you cannot rely on it. The fact sheet has more information about relying on ATO advice . The Commissioner received a request for administrative binding advice from the payer with respect to workers engaged by the payer. This request included the following attachments: Contract for services Letter of appointment as a casual worker (on call) The Contract for services (the Agreement) that is offered to the workers by the payer contains various conditions, the relevant ones of which are discussed below. The ' Letter of appointment as a casual worker' (the letter of appointment) sent to the workers by the payer clearly states that the worker will be a casual employee. As a casual employee, the allowance includes a loading to account for annual leave and sick leave. The payer will deduct and pay superannuation as required pursuant to the SGAA, into a superannuation scheme of the workers choice. As an employee the worker will be able to salary package in accordance with the policies of the payer and this will include the ability to salary sacrifice package meal and entertainment expense and any other benefits that might be available. Moreover, any reference made to the worker throughout the letter of appointment clearly refers to the worker as an employee and finishes with the worker signing a declaration understanding that they are an employee of the payer. You advised that the principal does not supply the workers with protective clothing and the workers are not required to wear identification tags.

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

Reasons for decision: Summary: The Superannuation Guarantee (Administration) Act 1992 (SGAA) states that an employer must provide the prescribed minimum level of superannuation support for its employees (unless the employees are exempt employees) or they must pay the superannuation guarantee charge (SGC). Whilst it is acknowledged that a clause of the Agreement states that: Nothing in this Agreement shall be construed to mean that the payer is liable to make superannuation contributions for the benefit of the worker or to pay a superannuation guarantee charge under the Superannuation Guarantee (Administration) Act 1992 and the Superannuation Guarantee (Charge) Act 1992 . It is necessary to examine all the facts and circumstances surrounding the formation of the contract and the obligations of both parties to determines whether there is an obligation on the payer to make superannuation guarantee payments on behalf of the worker in accordance with the provisions of the SGAA and the Superannuation Guarantee (Charge) Act 1992. The term 'employee', which is defined in section 12 of the SGAA, includes common law employees, and is also extended to include workers who are engaged under a contract wholly or principally for their labour. The employment relationship is often referred to as a 'contract of service'. This relationship is distinguished in Superannuation Guarantee Ruling SGR 2005/1 Who is an employee? (SGR 2005/1) from a 'contract for service' which is typically a contractor and principal type of relationship that does not attract any SGC liability. Therefore, it is necessary to consider not only whether there is a common law relationship of employer/employee between the parties, but also, if the common law test is not met or is inconclusive, whether the extended definition of 'employee' in subsection 12(3) of the SGAA applies. The task of defining the characteristics of the contract of service - the employment relationship - has been the subject of much judicial consideration. As a result, some general tests have been developed by the courts to assist in the determination of the nature of the relationship. However, defining the contractual relationship between the employer and employee can be a difficult task and will depend on the facts of each case. Accordingly it is necessary to determine the true nature of the whole relationship that exists between the payer and their agents/workers, as to whether there is a common law employer/employee relationship, or whether the workers meet the extended definition of employee under subsection 12(3) of the SGAA. | Detailed Reasoning - Common law employee: The courts have developed a method for applying the ordinary, or 'common law' meaning of an 'employee'. Their approach is to look at a wide range of factors, which indicate whether a person is an employee. For example, if the employer provides the place of work, this might indicate an employment relationship, while the absence of holiday pay might suggest the opposite. The courts' decisions tend to be taken on balance, after considering the relevant factors. The common law meaning of the term 'employee' was stated by the High Court in Stevens v. Brodribb Sawmilling Company Pty Ltd (1986) 160 CLR 16. It is clear from that case that there is no single objective test which will give the answer: …it is the totality of the relationship between the parties which must be considered...the question is one of degree for which there is no exclusive measure. While various factors have been identified by the courts as indicators of the true nature of the relationship, those features are only ever a guide to answering that question. It is necessary in each case to examine all the terms of the contract and to determine whether, on balance, the person is working in the service of another (as an employee) or is working on his or her own behalf (as an independent contractor). A clause in a contract that purports to characterise the relationship between the parties as that of principal and independent contractor and not that of employer and employee must be considered with all the other terms of the contract. Such a clause cannot receive effect according to its terms if it contradicts the effect of the agreement as a whole. That is, the parties cannot deem the relationship between themselves to be something that it is not. The parties to an agreement cannot alter the true substance of the relationship by simply giving it a different label. Subsequent conduct of the parties may demonstrate the relationship has a character contrary to the terms of the contract. In deciding whether the workers are common law employees of the payer there are a number of factors to consider. These factors are considered below. | Detailed Reasoning - Terms of engagement: The terms and conditions of the contract whether express or implied, in the light of the circumstances surrounding the making of the contract, whether verbal or written, will always be of considerable importance to the proper characterisation of the relationship between the parties. Some conditions of engagement are closely associated with employment and may, therefore, be persuasive indicators. For example: · provision of benefits such as annual, sick, and long service leave; · provision of other benefits prescribed under an award for employees; · payer prescribed times and location for the performance of work; · remuneration in the form of a salary or wage; · the worker uses assets and materials provided by the payer or is reimbursed, or paid a compensatory allowance, for expenses incurred in respect of use of own assets and materials; and · payer discretion (within the constraints of industrial relations laws) in respect of task allocation and termination of engagement. However, this list is not exhaustive and it must be emphasised that there is not a standard set of conditions applicable to an employee and another (different) set applicable to an independent contractor. It might be argued that the parties' intention in forming a contract is not subjective, but an objective one; that is, the task is not to discover the intention of the parties involved but to decide what each could reasonably conclude from the actions of the other. In the observation made by Isaacs J in Curtis v The Perth and Fremantle Bottle Exchange Co Ltd (1914) 18 CLR 17: Where parties enter into a bargain with one another whereby certain rights and obligations are created, they cannot by a mere consensual label alter the inherent character of the relations they have actually called into existence. Many cases have arisen where Courts have disregarded such labels, because in law they were wrong, and have looked beneath them to the real substance. In Hollis v. Vabu (2001) 207 CLR 21 ( Hollis v Vabu ) the High Court determined that an indicator of an employer/employee relationship was that the workers were presented to the public and to those using the courier service as representatives of Vabu, as they wore uniforms bearing Vabu's logo. Additionally in Hollis v Vabu it was noted that although no payments of annual leave or sick leave were given, and no superannuation deductions were made in respect of the bicycle couriers, the relationship between the parties is to be found not merely from these contractual terms. The system which was operated there under and the work practices imposed by Vabu go to establishing the 'totality of the relationship' between the parties and it is this which is to be considered. Application of the common law to your facts The circumstances surrounding the formation of the contract may assist in determining the true character of the contract. In determining the intention of the workers, the Commissioner must decide what could reasonably be concluded from their actions. Therefore, simply defining someone as a contractor does not necessarily lead to the conclusion that the individual is providing services as part of an operation of their own independent business. However, in this instance, the Agreement that was made between the two parties quite clearly states that the parties agree that this Agreement creates the relationship of Principal and Contractor between them and state that it is not their intention to create the relationship of Employer and Employee, Partnership or any other relationship. The worker agrees that he/she will meet all or any legal obligations, liabilities, and expenses in respect of sick leave, annual leave, long service leave, superannuation, relevant to themselves. Therefore, it is evident that the intention of the parties was that the nature of the relationship outlined in the Agreement would be characterised as Principal/contractor. | Detailed Reasoning - Control Test: A prominent factor in determining the nature of the relationship between parties is the degree of control which the employer has over the employee, as it goes to the root of the classical view of the master-servant relationship. The degree of control varies with the type of job, as the increasing usage of skilled labour has seen a consequential reduction in supervisory functions. The issue of control does not always rely on whether the employer exercises it, although this is clearly relevant, but rather whether they have the right to exercise it. Traditionally, a common law employee is told what work needs to be done, how it is to be done, and where it is to be done. However the mere fact that a contract may specify in detail how the contracted services are to be performed does not necessarily imply an employment relationship and a high degree of direction and control is not uncommon in contracts for services. It is not necessary for the employer to exercise day to day control over the worker. What is important is that the employer has the legal right of control. In Zuijs v.Wirth Brothers Pty Ltd (1955) 93 CLR 561 ( Zuijs ) the High Court articulated the significance of control in an employment relationship in the following way: What matters is lawful authority to command so far as there is scope for it. And there must always be some room for it, if only in incidental or collateral matters. Additionally, Dixon J in Humberstone v. Northern Timber Mills (1949) 79 CLR 389 stated : The question is not whether in practice the work was in fact done subject to a direction and control exercised by an actual supervision or whether an actual supervision was possible but whether ultimate authority over the man in performance of his work resided in the employer so that he was subject to the latter's orders and directions. The right to control versus actual control is particularly relevant where the nature of the employment requires a considerable degree of experience, knowledge or skill. In these circumstances, it is to be expected that the employer will leave the performance of the activity up to the employee. In Hollis v. Vabu (2001) 207 CLR 21 ( Hollis ), where the decision was that bicycle couriers were considered to be employees, Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ observed that: Vabu's whole business consisted of the delivery of documents and parcels by means of couriers. Vabu retained control of the allocation and direction of the various deliveries…Their work was allocated by Vabu's fleet controller. They were to deliver goods in the manner in which Vabu directed. In this way, Vabu's business involved the marshalling and direction of the labour of the couriers, whose efforts comprised the very essence of the public manifestation of Vabu's business. In consideration of the type of work performed by the workers and the skills they possessed, the Commissioner believes that telling the workers what was required to be done is a basic minimum of information required for them to determine whether they could/would accept the job, and did not amount to an exercise of control over how they were to perform the work. Due to the increasing usage of skilled labour and consequential reduction in supervisory functions, the importance of control lies not so much in its actual exercise, although clearly that is relevant, as in the right of the employer to exercise it. The question is not whether in practice the work was in fact done subject to a direction and control exercised by an actual supervision or whether an actual supervision was possible but whether ultimate authority over an individual in the performance of their work resided in the employer so that they were subject to your orders and directions. A payer has a right to specify how the contracted services are to be performed, but such control must be expressed in the terms of the contract. However, the mere fact that a contract may specify in detail where the contracted services are to be performed does not necessarily imply an employment relationship, and a high degree of direction and control is not uncommon in contracts for services. While it is traditionally more indicative of an employer/employee relationship, the issue of seeking permission or providing prior notice for taking time off, is not especially conclusive in determining the true nature of the relationship. In an ongoing relationship between an independent contractor and principal, it is reasonable to conclude that a worker would need to provide adequate notice to the payer to organise a replacement if the work needed to continue In determining the nature of the working relationship between the parties, the Commissioner considers whether the principal had the ultimate authority to control, regardless of whether that control was exercised on a day to day basis. Application of the common law to your facts The Agreement between the parties outlines the expectations of the payer in respect to a worker retained under the Agreement. Due to both the nature of the work being performed and the nature of the obligations imposed on the worker under the Agreement, it is clear that the payer retained some control over the worker to ensure that the principal's obligations to its clients were met. Whilst the payer does not have the capacity to control the decision the worker makes in respect of the services, it is considered that the payer had control over the worker in respect to where and when the services were provided during the period that the worker was situated on the payers premises. Therefore, it is considered that for the purposes of this test it is considered that for the purposes of this test, the relationship between the payer and the worker is one of employee/employer. | Detailed Reasoning - Integration Test: Another significant factor in establishing the nature of a contractual relationship at common law is to determine whether the worker's services are an integral part of the employer's business (under a contract of service as an employee) or providing services as an individual carrying on his or her own business (under a contract for services as an independent contractor). This is otherwise known as the 'business' or 'integration' test. Whether the worker operates on their own account or as part of a business of the payer is sometimes viewed as a consideration of whether the worker would be viewed by a third party as carrying on their own enterprise as an independent contractor or operator and whether they could be expected to generate goodwill in their own right. In Montreal v. Montreal Locomotive Works [1947] 1 DLR 161, Lord Wright said: ...it is in some cases possible to decide the issue by raising as the crucial question whose business is it, or in other words by asking whether the party is carrying on the business, in the sense of carrying it on for himself or on his own behalf and not merely for a superior. Similarly, in Stevenson, Jordan and Harrison Ltd v. MacDonald and Evans [1952] 1 TLR 101 Denning LJ said: ...under a contract of service, a man is employed as part of the business, and his work is done as an integral part of the business; whereas, under a contract for services, his work, although done for the business, is not integrated into it but is only accessory to it. The Full Bench of the High Court in Hollis endorsed the proposition stated by Windeyer J in Marshall v. Whittaker's Building Supply Co (1963) 109 CLR 210 that the distinction between an employee and 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. This factor was given significant prominence by the High Court as an aid to determining the common law contractual relationship between the parties to the dispute in the context of vicarious liability. In arriving at the conclusion that the bicycle courier was a common law employee of the courier company (which then became vicariously liable for the bicycle courier's negligence), Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ stated that, 'Viewed as a practical matter, the bicycle couriers were not running their own business or enterprise, nor did they have independence in the conduct of their operations.' The skills involved in carrying out the work are also a useful guide in determining whether a person is carrying on their own business or not. The provision of professional skill or skilled labour may imply that the contractor is able to make an independent career by selling that skill. In the case of a contractor with an independent career, it may be implied that the contractor is able to conduct their own business using those skills. This was highlighted in Hollis at paragraph 48, where the court said in relation to bicycle couriers hired by Vabu: The couriers were not providing skilled labour or labour which required special qualifications. A bicycle courier is unable to make an independent career as a free-lancer or to generate any 'goodwill' as a bicycle courier… In an employment relationship, tasks are performed at the request of the employer and the employee is said to be working in the business of the employer. An independent contractor carries on a trade or business of their own. An independent contractor enters into a contract to perform specific tasks and has a high level of discretion and flexibility about how the work is to be performed, even if the contract contains precise terms about methods of performance. An employee works in the business of the employer and the work performed may be said to be integral to that business. An independent contractor works for the payers business but the work is not integrated into the business rather is an accessory to it. Application of the common law to your facts Due to both the nature of the work being performed and the nature of the obligations imposed on the worker under the Agreement, it is clear that the work performed by the worker could be considered as being integral to the business operated by the payer. Under the Agreement, the worker has an obligation to provide prompt, efficient and diligent services for the payer's clients within their current area of qualification. Moreover, in the Agreement the payer undertook to supply: · staff to assist the worker in the provision of the worker's services, and · such equipment, consumables and stationery necessary for the provision of the worker's services; The information provided indicates that the payer does not provide the worker with any protective clothing or with an identification tag. Consequently the Commissioner has decided that the results of this test are indicative of an employee/employer relationship. | Detailed Reasoning - Results Test: Under a results-based contract, payment is often made for a negotiated contract price, as opposed to an hourly rate. The meaning of the phrase 'producing a result' means the performance of a service by one party for another where the first mentioned party 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 do work. Satisfactory completion of the specified services is the result for which the parties have bargained. That is, a payment becomes payable when, and only when, the contractual conditions have been fulfilled. Where the substance of a contract is to achieve a specified result, there is a strong indication that the contract is one for services. The production of a given result is considered to be a mark of independent contractor status ( World Book (Australia) Pty Ltd v. FC of T (1992) ATC 4327). 'Results' contracts describe traditional principal/independent contractor arrangements where a specific identifiable task is performed. The consideration is often a fixed sum on completion of the particular job as opposed to an amount paid by reference to the hours worked. In a contract for services (whether written, oral or implied), the contract specifies the services to be performed in return for an agreed payment. Satisfactory completion of the specified services is the result for which the parties have bargained. Conversely, under a contract of service, payment is not necessarily dependant on, or referable to, the completion of the specified services. While the notion of 'payment for result' is expected with a contract for services, it is not necessarily inconsistent with a contract of service. The High Court in Hollis considered that the payment to the bicycle couriers per delivery, rather than per time period engaged, was a natural means to remunerate employees whose sole purpose is to perform deliveries. Accordingly, the contractual relationship as a whole must still be considered to determine the true character of the relationship between the parties and what the worker was hired to do. Generally where a worker is paid a set amount per task, this is a clear indicator of a contract for result, typical of a principal and independent contractor relationship. However, it should be also noted at this point that payment for result it is not necessarily inconsistent with a contract of service . Conversely, giving the nature of the industry a payment per completed file may be a convenient or natural way to measure and remunerate work performed by agents/workers (a piece rate basis). This is similar in nature to Hollis v. Vabu where bicycle couriers sole purpose is to perform deliveries. These types of arrangements are more common when engaging employees to perform work on a casual, non-full-time, basis. Additionally, a contract to achieve a specified result would generally be formulated on an individual basis. In his original decision, the Commissioner found that the workers were paid to achieve a result. Application of the common law to your facts The Agreement between the parties outlines the expectations of the payer in respect to the workers that are retained under the contract and states on what basis and how the worker is paid The clauses clearly require the worker to provide services to clients and that the worker is required to submit invoices to the payer for the services provided and are paid an agreed fee for the individual services. Consequently it is considered that the results of this test indicate that there is a principal/contractor relationship. | Detailed Reasoning - Delegation Test: The unlimited power to delegate or subcontract work is an important factor in deciding whether the worker is an employee or independent contractor. If an individual has unlimited power to delegate the work to others (with or without the approval or consent of the Principal), this is a strong indication that the person is being engaged as an independent contractor. Delegation is generally implied in a contract for services where the emphasis is on result rather than person. However, delegation clauses are considered in the context of the contract as a whole to determine if they are consistent with the apparent essence of the contract or if they are merely self-serving statements. Delegation is not simply the delegation of tasks from one employee to another or the ability to swap shifts or request a fellow employee to perform some duties; it is the ability to freely subcontract or employ others to perform the work. Application of the common law to your facts In relation to the issue whether the worker is able to delegate, the contract allows that the worker acknowledges that the services are to be provided personally or through another worker appointed in accordance with the payers policy. The Commissioner considers that the workers did have the right to delegate work to others; however, this right had some restrictions, given that the payer's policies had to be satisfied. Therefore, the Commissioner considers that, with respect to the delegation test, the relationship between the payer and the worker is one of principal and contractor. | Detailed Reasoning - Risk: Generally speaking, employers are vicariously liable for negligence and injury caused by their employees. However a principal will not be liable for negligence or injury caused by an independent contractor. The higher the degree to which a worker is exposed to the risk of commercial loss (and the chance of commercial profit), the more they are likely to be regarded as being independent. Typically, a worker who derives piece-rate payments and sustains large outgoings would be so exposed. The higher the proportion of the gross income of the worker which is required to be expended in deriving that income, and the more substantial the assets which the worker brings to the tasks, the more likely that the contract is for services, or a contract with an independent contractor. Another consideration of risk is the liability for the cost of rectifying faulty work. That is, the key underlying consideration is whether the individual is exposed to commercial risk in terms of a liability to cover the cost of rectifying defective work. This is consistent with the focus on the chance of profit and the risk of loss as a traditional indicator that a worker is an independent contractor conducting their own business. Application of the common law to your facts It is considered that the worker bore some exposure to commercial risk in that they were generally required to provide indemnity insurance. Conversely the payer also bears exposure to commercial risk in that they provide the equipment, staff and facilities that enable the worker to provide their services. Consequently the Commissioner considers that the results of this test are inconclusive as to whether the relationship was employee/employer or principal contractor. | Detailed Reasoning - Capital: 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 his work by the employer. Furthermore, the employer is often also responsible for the business expenses incurred by the worker, since the worker has been integrated into the employer's business. Independent contractors carrying on their own business often pay and provide for their own assets, tools, equipment, maintenance costs and other expenses. As stated by McKenna J in Ready Mixed Concrete (South East) Limited v Minister of Pensions and National Insurance [1968] 2 QB 497 at 526, '…the ownership of assets, the chance of profit and risk of loss in the business of carriage are his and not the company's.' The investment of capital, the maintenance of capital and risk of loss of capital in the event of an unsuccessful venture must be of a significant nature to deem a worker not an employee. Application of the common law to your facts The Agreement states that the payer will provide staff, equipment, consumables and stationery to enable the worker to provide their services. Therefore it is considered that the payer is providing the majority of the capital expenses, and that this is consistent with an employee/employer relationship. Therefore, the Commission has decided that the results of this test indicate that an employee/employer relationship exists. | Detailed Reasoning - Conclusion - Common Law: With respect to work completed by the workers for the payer, the Commissioner has determined that the results of the common law tests are inconclusive in determining whether an employee/employer or principal/contractor relationship exists. Therefore it is necessary to determine whether the worker would be considered as an employee under the extended definition contained within subsection 12(3) of the SGAA. | Detailed Reasoning - Extended definition of employee under subsection 12(3) of the SGAA: Subsection 12(3) of the SGAA provides that if a person works under a contract that is wholly or principally for the labour of the person, the person is an employee of the other party of the contract. Subsection 12(3) was intended to extend the scope of the SGAA beyond traditional employment relationships to take into account some independent contractors who principally provide their own labour to meet obligations under a contract. SGR 2005/1 provides further guidance on this issue and at paragraph 11 states where the terms of the contract indicate that: · the individual is remunerated (either wholly or principally) for their personal labour and skills; and · the individual must perform the contractual work personally (there is no right of delegation); and · the individual is not paid to achieve a result, · the contract is considered to be wholly or principally for the labour of the individual engaged and he or she will be an employee under that subsection. Each of the three conditions must be met before subsection 12(3) of the SGAA can be satisfied. | Detailed Reasoning - Were the workers remunerated wholly or principally for labour?: In assessing whether a person has been remunerated wholly or principally for labour and skills the ATO view is that, in the context of subsection 12(3) of the SGAA the word 'principally' assumes its commonly understood meaning that is, chiefly or mainly. Generally the value of various parts of a contract is specified in the contract (i.e. the labour and non-labour components of the contract are clearly expressed. In this instance, it is concluded from the wording of the Agreement that the workers are being wholly or principally remunerated for their labour. | Detailed Reasoning - Were the workers required to perform the work personally?: The second requirement of subsection 12(3) of the SGAA is that it requires the individual to carry out the work personally. That is, the worker does not have the right to delegate or subcontract the work to another party. Even if the contractor has no intention to delegate or subcontract the work and actually performs the work personally, the contract itself is still not for the labour of the person if there is a possibility of delegating work to another person. Nevertheless, the Commissioner considers that, with respect to this criterion, the worker had the ability to delegate under the Agreement provided the payer's policy was satisfied. Therefore it is considered that the worker was not required to perform the work personally. | Detailed Reasoning - Were the workers paid to achieve a result?: The third and last requirement of subsection 12(3) of the SGAA is that the payments received by the worker must not be in relation to the production of a given result, but instead should be for their labour. The clauses contained in the agreement indicate that the worker is paid to achieve a result, namely the provision of their skills and services to the clients of the payer. | Detailed Reasoning - Conclusion - extended definition of employee: As stated above, each of the three conditions in paragraph 11 of SGR 2005/1 must be met before subsection 12(3) of the SGAA can be satisfied. In this case as all three conditions have not been satisfied it is considered that the workers do not meet the extended definition of employee as set out in subsection 12(3) of the SGAA as the contract stipulates that they are being paid under a results based contract and have the power to delegate. | Detailed Reasoning - Status of worker under SGAA for workers under a separate standard employment agreement (On-call Agreement): The ' Letter of appointment as a casual worker' (the letter of appointment) sent to the workers by the payer clearly states that the worker will be a casual employee. As a casual employee, the allowance includes a loading to account for annual leave and sick leave. The payer will deduct and pay superannuation as required pursuant to the SGA, into a superannuation scheme of the worker's choice. As an employee the worker will be able to salary package in accordance with the policies of the payer and this will include the ability to salary sacrifice package meal and entertainment expense and any other benefits that might be available. Moreover, any reference made to the worker throughout the letter of appointment clearly refers to the worker as an employee and finishes with the worker signing a declaration understanding that they are an employee of the payer. Consequently it is considered that the intention of the parties was that the nature of the relationship outlined in the Agreement would be characterised as employee/employer for the purposes of the SGAA. In addition, as the worker: · is being remunerated (either wholly or principally) for their personal labour and skills; and · must perform the contractual work personally (there is no right of delegation); and · is not paid to achieve a result, · the contract is considered to be wholly or principally for the labour of the individual engaged therefore the worker who is operating under the letter of appointment will be an employee for the purposes of the extended definition contained in subsection 12(3) of the SGAA 1992. | Detailed Reasoning - Conclusion - overall: Having considered the nature of the working relationship between principal and worker and the relevant case law, and putting in balance the relevant indicators it has been determined that a common law employment relationship does not exist between the payer and the worker and that the worker would not be considered to be employees under the extended definition of employee contained in subsection 12(3) of the SGAA 1992. For the worker who is providing on-call services under the letter of appointment it is considered that they are employees for the purposes of the SGAA and the payer has an obligation to comply with the SGAA in respect of these employees.

Please check this edited version to be sure that there are no details remaining that you think may allow you to be identified. Contact us at the address given in the fact sheet if you have any concerns. | Question 1: Are the workers retained by the payer under a contract for services (the Agreement) considered common law employees as defined in subsection 12(1) of the SGAA for the quarters commencing 1 January 2010 and ending 31 December 2012? | This advice applies for the following periods: 1 January 2010 to 30 December 2012 | Question 1: Is a worker retained by the payer under a letter of appointment as a casual worker (the letter of appointment) considered a common law employee as defined in subsection 12(1) of the SGAA for the quarter starting 1 January 2010 to the quarter ending 31 December 2012? | Yes, please refer to the Reasons for Decision | Is a worker retained by the payer under the letter of appointment considered an employee as defined in subsection 12(3) of the SGAA for the quarter starting 1 January 2010 to the quarter ending 31 December 2012? | This advice applies for the following periods: 31 December 2009 to 30 December 2012