Private ruling: Superannuation - contract emloyee
Date of advice: 22 July 2025
Published: 15 September 2025

Ruling: Q1: Are the Workers common law employees the Principal under subsection 12(1) of the Superannuation Guarantee (Administration) Act 1992 (SGAA) for the period 1 July 20YY to 30 June 20YY? | A1: Yes. | Q2: Are the Workers employees of the Principal in accordance with subsection 12(3) of the SGAA for the period 1 July 20YY to 30 June 20YY? | A2: Yes.

Relevant facts and circumstances: The Principal operates a business in which it offers xx services to its clients. The Principal has engaged two independent contractors, Worker A, as a xx, and Worker B, as a xx and xx (the Workers). The Principal and the Workers entered into a formal written contract, (the Agreement). The Agreement between the Principal and Worker A was dated DDMMYYYY. The Agreement between the Principal and Worker B was dated DDMMYYYY. The Principal advised that contract terms for both Workers remained unchanged from DDMMYYYY to DDMMYYYY. The relevant terms and circumstances of the Agreement are as follows: a. Upon engagement the Principal is liable to pay the Worker in accordance with the contract; b. The Principal pays the Worker x% of the gross fees for xx services received by the Principal from the clients, for non-xx services, the Workers will be paid a separate sum on a case-by-case basis as agreed by both parties; c. By signing the Agreement, the Worker acknowledges that they are not an employee of the Principal and as such have no entitlements relating to superannuation or under the National Employment Standards; d. The Principal calculates the Workers' entitlement of xx and non-xx services at the end of each calendar month, then the payment shall be made to the Worker within fourteen days in the subsequent month by cheque or direct deposit; e. Hours of work will be arranged by mutual agreement; f. The place of work is the Principal's service centres or other agreed premises, such as by using technology, in the Principal's other premises, church premises, or venues where the Principal can serve its community; g. Workers are to hold relevant professional indemnity and worker's compensation insurance with copies to be given to the Principal before the commencement of the agreement, and within seven days upon renewal or amendment; h. Workers are to hold the relevant qualifications to practise as a xx in the relevant state and to be currently registered with the relevant professional bodies in the relevant state with copies to be given to the Principal that is valid during the Workers' practise with the Principal; i. Either party can terminate the agreement by giving four weeks' written notice; j. Any intellectual property rights in materials developed for and paid by the Principal during the contracted period lie with the Principal, and the intellectual property may only be used by the Workers whilst they are contracted. The Agreement describes the role, and expected services and outcomes as follows: a. The role of the Workers is 'to provide xx, education and training services to the community in accordance with the values, vision, and mission' of the Principal. b. To provide xx services (assessment, intervention, therapy, and treatment plan review) for the Principal's clients; c. To prepare and conduct mental health, relationships and family life educational seminars, group work, therapeutic groups, or public talks, as mutually agreed; d. To maintain up-to-date professional records of xx, education and training services; e. To assist in data entry relating to xx service provided by you for the smooth operation of the services; f. To consult with the Principal's Director and other staff as needed; g. To be accountable and report directly to the Principal's Director. The agreements between the Principal and the Worker are for one income year (Worker A: DDMMYYYY to DDMMYYYY; Worker B: DDMMYYYY to DDMMYYYY) or until a new agreement is made and replaces the original agreement. On DDMMYYYY, the Principal provided the following further information by email as follows: a. The Workers work every month. b. Based upon a four-week average from DDMMYYYY to DDMMYYYY, Worker B worked X.X hours per week and Worker A worked X.X hours per week. c. The Workers decide when they work. d. The Workers decide the location of their work, either at the Principal's premises, online, or alternate locations. e. The Workers do not work exclusively for the Principal. f. The Workers can refuse any appointment without providing an explanation to the Principal. g. The Workers provide their own materials. h. The Workers cannot subcontract their work to others. i. The Principal's input into the services offered by the Workers includes booking, billing, and issuing receipts to clients. j. The Workers are responsible for damages and claims; the Workers have their own professional indemnity insurance. The Principal's website lists both Worker A and Worker B as members of their team. Both workers have a profile on the website that introduces themselves, lists their relevant qualifications, and allows the Principal's clients to contact them to book a xx appointment. On DDMMYYYY, the Principal provided a breakdown of the fees for Worker A for the period DDMMYYYY to DDMMYYYY. Relevant information within this document includes a. The Worker held XX appointments during this period, all of which have been described as 'xx sessions'. b. In XX of these appointments, the total amount billed to the client was $XXX.XX, and the amount received by the Worker was $XXX.XX. c. In XX of these appointments, the total amount billed to the client was $XXX.XX, and the amount received by the Worker was $XXX.XX. d. The total amount paid to the Worker was $X,XXX.XX, which was split into a gross payment of $X,XXX.XX and a superannuation payment of $XXX.XX (11.5% of the total amount). On DDMMYYYY, the Principal provided the following further information by email as follows: a. 'Contractors do not provide services at no cost to clients..' b. 'Contractors do not offer services at a reduced fee...' Assumption The Workers' contracts are the same from 20YY-YY to 20YY-YY.

Relevant legislative provisions: Taxation Administration Act 1953 section 12-35 of Schedule 1 | Super Guarantee Administration Act 1992 section 12 (3)

Reasons for decision: Summary: The Principal is required to make Superannuation Guarantee payments to the Worker A and Worker B pursuant to section 12(1) of the Superannuation Guarantee (Administration) Act 1992 (SGAA). | Detailed Reasoning - Background: 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. Case references used throughout this document are cited in TR 2023/4. 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. 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 subsections 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 or her, the employer's, business, and a person who carries on a trade or business of his or her 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, xx. Construct's right to control the provision of xx labour was an essential asset of their business, which they deployed in order to fulfil contractual obligations with xx. [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: 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] 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] 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] | 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. [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. 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. 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. 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] | 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. [24] 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. [25] 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. [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] | 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. [29] 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. [30] 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] | 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. [32] 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. | 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. [34] Rather the characterisation of the relationship needs to turn on the substantial rights and duties between the parties. [35] 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 offers xx. The Principal offers services such as xx and xx. The Workers provide an integral part in allowing the Principal to provide those services. The Principal engages the Workers under the Agreement, a term of which requires the Workers to acknowledge that they are not an employee of the Principal and as such have no entitlements relating to superannuation. TR 2023/4 states that in respect of labels and other descriptors given to parties in a contract, the labels are not determinative or even likely relevant to the characterisation of their relationship. [36] A contractor would typically 'carry out the work as principal of their own business, not part of another'. [37] In this case, the clients approach the Principal to seek xx, and they can see the Workers in their roles as xx or xx. The Workers have a profile on the Principal's website and are described as members of the Principal's team. The Agreement states that the Principal is to make available booking, clerical and administrative support. The booking support is facilitated via the Principal's website with options of phone contact, email contact or submission of an electronic form. All options result in a public perception that the Workers are serving in the Principal's business. The Workers are effectively obliged to use the Principal's systems to initially interact with the clients and the Workers are visible on the Principal's website during that process. As part of the Agreement. the Workers must commit to the values, vision and mission of the Principal. This range of contractual obligations are indicative of the Workers being integrated into the Principal's business, and seen as such by the public. | Detailed Reasoning - Control: The Workers can choose whether they work in one of the Principal's service centres, online, or at alternate locations, however, regardless of the location they still need to meet contractual obligations in performing the services. The Workers' role is to provide xx, education and training services to the community in accordance with the values, vision, and mission of the Principal. The Workers are not told how to manage their clients. However, the Workers' contracts state that they must assist in data entry relating to the xx service provided. The Workers must consult with the Principal's Director and other staff as needed. This is indicative of the Principal's right to control the Workers. They can choose when they work. The Agreement requires the Workers to provide a copy of their client reports as per the industry standards for the Principal's record and to ensure its accessibility by the Principal's Centre Director within 7 days after each consultation. TR 2023/4 states that 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. [38] As detailed above, the Agreement provides the Principal with contractual right to exercise control in a range of situations. | Detailed Reasoning - Other common law indicia: Based on the information provided, the Workers must provide their own supplies and equipment, such as note-taking supplies or personal electronic devices. However, the Principal provides the premises to perform xx work and the technology, such as the Principal's website, to schedule xx appointments The Principal's premises are an asset, which provides the Workers a place to perform their services. If the Workers acted as the principal of their own business, they would need to find their own place of work to be able to see clients in a face-to-face environment. The Workers must obtain and maintain their own professional indemnity insurance. However: A clause in a contract that requires a worker to take out public liability or indemnity insurance in the Commissioner's view will likely be a neutral factor in determining the nature of the relationship between the worker and the engaging entity. [39] The Agreement states that the Workers 'monthly entitlement for the xx services and any agreed payment for your non-xx services will be calculated at the end of each calendar month'. In a contractor relationship, the Worker would bill the Principal for the work completed, not receive a monthly payment calculated by the Principal. The Agreement states that 'Service hours will be arranged by mutual agreement', which could indicate either a contractor relationship or a casual employee relationship. The Workers are not contracted to achieve a result as the Agreement requires the delivery of services throughout a set contract period, in contrast to a lump sum payment on delivery of a discrete result. In a typical Principal-contractor relationship, the Principal would allow the contractor to sub-contract their work to another worker without oversight. It would be the contractor's role to ensure that the sub-contractor completes the work to the Principal's required standard. The contractor would also be responsible for paying the sub-contractor. There is no express right of delegation under the Agreement, and no basis on which to read an implied right into the Agreement. An evaluation of these common law indicia, together with how they interrelate with the control and integration elements, is indicative of the Workers being common law employees of the Principal. Accordingly, the Workers are employees under subsection 12(1) of the SGAA. Subsection 12(3) - contract wholly or principally for labour | Detailed Reasoning - Question 2: Are the Workers employees of the Principal in accordance with subsection 12(3) of the SGAA for the period 1 July 20YY to 30 June 20YY? | 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: 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: A person's labour can include mental and artistic effort, as well as physical toll. [40] 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.' | 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). [41] In Moffet , Perram and Anderson JJ considered that the Services Agreement provided Dental Corporation, the putative employer, with two sets of benefits: [42] ... 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. [43] 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. [44] For that reason, the Services Agreement was, from Dental Corporation's perspective, wholly or principally for Dr Moffet's labour. [45] It was substantially for that purpose [46] , 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. [47] 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. [48] 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. [49] 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. [50] 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. [51] 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. [52] 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. [53] 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. [54] 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. [55] | 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 of the law: In your case, the Principal uses the Workers contracted to provide xx or xx for its clients and the wider community. A written contract exists between the Principal and each of the Workers. [56] The Workers complete their work under the contract. [57] The contract is wholly or principally for the labour of the Workers based on the facts and circumstances and common law discussion above which indicate that: • the Workers are remunerated (either wholly or principally) for their personal labour and skills • the Workers must perform the contractual work personally (that is, there is no right to delegate), and • the Workers are not contracted to achieve a result as the Agreement requires the delivery of services throughout a set contract period, in contrast to a lump sum payment on delivery of a discrete result. Accordingly, all three elements, listed at paragraph 62, for the Worker to be an employee under subsection 12(3) of the SGAA, are satisfied. [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] TR 2023/4 at [76] [37] TR 2023/4 at [39]. [38] TR 2023/4 at [37] [39] TR 2023/4 ­ at [73]. [40] Deputy Commissioner of Taxation v Bolwell (1967) 1 ATR 862 at 873. [41] Moffet [2020] FCAFC 118 at [96-97]. [42] Moffet at [100]. [43] Moffet at[101]. [44] Moffet at[103]. [45] Moffet at [104]. [46] Ibid. [47] World Book at [4334]. [48] ZG Operations at [88]. See also Humberstone v Northern Timber Mills (1949) 79 CLR 389. [49] For example, in Stevens . [50] Hollis at [54]. [51] Roy Morgan (2004) SASC 288 at [42]. [52] Hollis at [4520]. [53] 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]. [54] On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 3) [2011] FCA 366 ( On Call ) at [105] and [253]. [55] On Call at [253]. [56] TR 2023/4 at [96]. [57] TR 2023/4 at [99,100]

Reasons for Decision: Subsection 12(1) - common law employee | Question 1: Are the Workers common law employees of the Principal under subsection 12(1) of the Superannuation Guarantee (Administration) Act 1992 (SGAA) for the period 1 July 20YY to 30 June 20YY?