13 May 2023
A recent Federal Court case has highlighted important superannuation guarantee (SG) implications for businesses that engage certain types of contractors.
Background facts
The case of Jamsek v ZG Operations Australia Pty Ltd (No 3) [2023] FCAFC 48 (24 March 2023) concerned two truck drivers who previously drove delivery trucks for a company, ZG Lighting, and its related and predecessor companies for just under 30 years. The drivers provided their services via a partnership with their spouses.
The drivers commenced proceedings against ZG Lighting claiming they were employees for the purposes of section 12(3) the Superannuation Guarantee (Administration) Act (1992).
In the first appeal decision more than two years ago, the Federal Court held that Mr. Jamsek and his colleague Mr. Whitby were employees of ZG Lighting within the ordinary, common law, meaning of that term.
The court, in the first appeal decision, did not consider whether the ‘expanded meaning’ of employee in section 12(3) applied.
The expanded meaning 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 to the contract”.
On appeal, the High Court held that the workers were not employees within the ordinary, common law meaning of that term and remitted the matter back to the Federal Court to determine whether Mr. Jamsek and Mr. Whitby were ZG Lighting’s employees within the expanded meaning in s 12(3). That is, were the two workers engaged under contracts that were wholly or principally for their labour? If yes, then an SG obligation arose. That was the question that the Federal Court turned its mind to in March 2023.
Continue reading “Employee or contractor? – the Federal Court weighs in”
