Private ruling: Superannuation guarantee - church missionaries on home assignment
Date of advice: 15 May 2023
Published: 3 July 2023

Ruling: Q1: Is a missionary undertaking a period of 'home assignment' on behalf of a Church an employee within either the ordinary meaning of subsection 12(1) of the Superannuation Guarantee (Administration) Act 1992 (SGAA), or within the extended meaning of subsection 12(3)? | A1: No. Summary A missionary undertaking home assignment is not an employee under either subsection 12(1) or subsection 12(3) of the SGAA. Superannuation is not required to be paid for missionaries on home assignment. Facts The Church trains missionaries, places them with international partners, and provides pastoral care and support for them while on location. Missionaries alternate between periods of 'home assignment' and 'overseas assignment'. In most cases, missionaries undertake an initial home assignment, which is followed by an overseas assignment. This process may be repeated several times. Home assignment includes: • Engaging with local churches and supporters, to propagate the Christian message, and educate about mission • Providing pastoral duties • Assisting with fundraising work. Subsequent home assignments also include: • a period of rest and recuperation, which may include attending to any required health/medical matters • spending time with family and friends • spiritual refreshment • continuing professional development While on home assignment missionaries receive an allowance (whether 'on duty' or not) and are also provided with accommodation and utilities, either free, or for a nominal fee. Missionaries sign statements to the effect that they do not have an intent to enter into legal relations, and that their role is one of volunteer, not employee.


Relevant legislative provisions: Superannuation Guarantee (Administration) Act 1992 subsection 12(1) | Superannuation Guarantee (Administration) Act 1992 subsection 12(3) | Superannuation Guarantee (Administration) Act 1992 section 19 Detailed reasoning | Section 19 of the SGAA provides that an employer's individual shortfall is calculated by reference to salary and wages in respect of 'employees' for a particular quarter. | Subsection 12(1) of the SGAA contains an explanation of the terms 'employee' and 'employer' for the purposes of the Act and states that they have their ordinary meaning. | Subsections (2) to (11) of the SGAA expand the meaning of those terms. | Relevantly, subsection 12(3) states 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 to the contract'. | With regard to subsection 12(1), it is not considered that the usual indicators of a common law employee are present in this case. | Determining whether a contract exists is a matter of applying the ordinary principles of contract law. An agreement between parties will not be given effect by the courts as a legally enforceable contract unless the following elements are present: | • The parties must intend to be legally bound by their agreement. | • There must be an offer by one party and its acceptance by the other. | • The promises which constitute the agreement must be supported by consideration (unless the agreement is in the form of a deed). | The mutual intention to create legal relations is therefore an essential requirement in the formation of a contract ( Australian Woollen Mills Pty Ltd v Commonwealth (1954) 92 CLR 424, 457). | Paragraph 24 of Superannuation Guarantee Ruling SGR 2005/1 Superannuation guarantee: who is an employee? confirms the relationship between employer and employee is a contractual one, as follows: | 24. The relationship between an employer and employee is a contractual one. It is often referred to as a contract of service . Such a relationship is typically contrasted with the principal/independent contractor relationship that is referred to as a contract for services . An independent contractor typically contracts to achieve a result whereas an employee contracts to provide their labour (typically to enable the employer to achieve a result). | The documents provided for consideration clearly state that there is no intention on the part of either party to enter into legal relations, and further, that the intended role of a missionary is that of a volunteer only rather than as an employee. | The fact that the missionaries agree with statements made in the documents provided, while not determinative on its own, supports a view that they enter into this relationship of their own volition. | Notwithstanding that the documents are in many cases quite lengthy, and restrictive (the existence of missionaries during the course of the arrangement seemingly being greatly controlled by the Church), the parties have clearly stated an intention to not create a legally binding employment relationship. | Whilst the courts have confirmed that parties cannot deem the relationship between them to be something that it is not ( Hollis v. Vabu (2001) 207 CLR 21 at 45), there must be some objective grounds on which to consider misrepresentation by the parties. | In the case of Edwards v Skyways Ltd [1964] 1 All ER 494 , the High Court confirmed that where parties expressly disavow an intent to create legal relationships, there needs to be a firm objective reason before any rebuttal can occur. | In this case, there exists insufficient evidence to rebut the principle established in Edwards and to support an allegation that there was an intent to create legal relationships contrary to the express statements contained in the relevant documents. | In particular, the way the missionary assignment has been cast as a voluntary undertaking, and the way the allowances have been described as no more than a support payment for basic living requirements, rather than as consideration for any specific missionary work which has been performed, reconciles with the intent expressed by the parties, that these are not legally binding contracts. | In the absence of any identified employment contract and given the parties have asserted there is no employment relationship, it is considered that, with respect to the missionaries and the agreements considered, the Church is not an employer, nor is there an employee for the purposes of section 12 of the SGAA. | The missionaries are not employees for the purposes of subjection 12(1) of the SGAA. | There is no person working under a contract that is wholly or principally for the labour of that person, who is considered to be an employee under the extended definition provided by subsection 12(3) of the SGAA. | There is no payment of salary and wages as per section 19 of the SGAA, with the allowance paid to the missionaries appearing to meet the definition of a stipend, as defined in A Dictionary of Human Resource Management (3 ed) : | A regular, fixed payment that is received in return for performing a job or service. A stipend often takes the form of an allowance that is paid to someone undertaking work that is of public benefit and which otherwise would be performed on a voluntary, unpaid basis. | Consequently, there is no superannuation guarantee charge accruing to the Church as a result of this arrangement.