The AAT has confirmed the Commissioner’s decision to impose on a taxpayer (a trustee of a family trust) superannuation guarantee default assessments after finding that the taxpayer’s workers were employees and not independent contractors.
The Trust carried on a commercial residential plumbing business and during the relevant period, had approximately 13 employee plumbers and 4 to 5 independent contractor plumbers. Following an employer obligations audit, the Commissioner determined the taxpayer did not meet its superannuation guarantee obligations for 5 of the independent contractor plumbers (“the Workers”). The Commissioner had determined the Workers were not contractors but were employees. Superannuation guarantee default assessments were issued to the taxpayer in respect of the Workers for the quarters from 1 July 2009 to 30 June 2011.
After considering the “totality of the relationship” and the evidence before it, the Tribunal concluded the Workers were employees and not independent contractors.
- In doing so, it accepted the Commissioner’s submission that effectively, some Workers were full-time casuals, were paid an hourly rate and accordingly were not eligible for holiday or sick leave.
- The Tribunal was of the view that the Workers were employees within the meaning and tests of common law.
- It found the Workers were paid principally for their labour and therefore they came within the expanded definition of “employee” in s 12(3) of the SGAA.
- It also held the taxpayer had failed to discharge the onus of proving that the superannuation guarantee default assessments were excessive.
(AAT Case [2013] AATA 681, Re The Trustee for the SR & K Hall Family Trust and FCT, AAT, Ref Nos: 2012/3080, 2012/3081, Dunne SM, 24 September 2013.)
[LTN 186, 25/9/13]