Client Portal

Does your contractor need to be paid superannuation?

A recent decision of the full Federal Court will result in many contractors, who were previously considered to be outside the scope of compulsory superannuation payments, being entitled to such superannuation payments.

In Dental Corporation v Moffet, Dr Moffet, provided his services as a dentist to Dental Corporation under a services agreement.  Upon termination of the services agreement, Dr Moffet brought proceedings asserting that he was an employee of Dental Corporation and was entitled to be paid annual leave, long service leave and superannuation.

The Court found that Dr Moffet was not an employee of Dental Corporation but was an independent contractor conducting his own business. Therefore, he had no entitlement to annual leave or long service leave. However, on the issue of superannuation the Court was required to consider section 12(3) of the Superannuation Guarantee (Administration) Act 1992 (Cth) (Superannuation Act).

Section 12(3) defines an “employee” to include a person working under a “contract that is wholly or principally for the labour of the person”.

Section 12(3) can therefore apply to an independent contractor.

The Court found that Dr Moffet was entitled to superannuation and this finding was upheld on appeal by the full Court.

To view the Lynch Meyer article in full, click here

Let us keep you up-to-date

Subscribe to the NFPAS email newsletter to receive not for profit industry news and special updates.