JMC Pty Ltd v Commissioner of Taxation
You may be recruiting trainers either as an employee or a subcontractor. The nature of the relationship between the parties governs the outcome. We have previously considered the factors to determine whether a trainer is an employee or a subcontractor. Here is the link to the previous blog.
In a recent Federal Court case of JMC Pty Ltd vs Commissioner of Taxation, an individual lecturer engaged as a subcontractor by a higher education provider was held to be an employee for superannuation purposes.
Facts of the Case:
JMC Pty Ltd (JMC) engaged a trainer as an independent contractor.
The trainer was issuing invoices under a trading name.
The written contract mentioned paying an hourly rate for delivering lectures and marking examinations, with a degree of oversight by JMC.
The trainer had the right to delegate teaching services to another person or corporation.
JMC also provided the necessary infrastructure and equipment to deliver the lectures.
The trainer provided the invoices, and JMC paid the invoices. However, JMC did not make superannuation contributions for the trainer.
The federal court held that the trainer was a common law employee for superannuation purposes and was not a subcontractor.
The interesting point is that this is a federal court decision and not a matter at the Administrative Appeals Tribunal (AAT). The case has since been appealed to the full federal court. We will keep you posted if the full federal court has a different view.
Full details of the case are available at:
Factors to determine Employee or Subcontractor: