12 Mar 12 Decision Impact Statement - Newton
The ATO has published a Decision Impact Statement in relation to the Federal Court decision in FCT v Newton  FCA 1440; 2010 ATC 20-234. The case concerned whether workers engaged by the taxpayer were employees for the purposes of the Superannuation Guarantee (Administration) Act 1992.
The taxpayer operated a business that principally provided community support services to the elderly. The services provided to them included amongst other things cooking, cleaning, shopping, showering, dressing and general household duties. The services were not physically or personally provided by the taxpayer but by the workers on whom the taxpayer could call when a client placed a request for assistance.
The AAT held that the workers were not employees on the basis of s 12(11) of the Superannuation Guarantee (Administration) Act 1992. The Commissioner's appeal to the Federal Court (Emmett J) was upheld, with his Honour holding that the exemption in s 12(11) was intended to be for the benefit of the householder for whom the relevant work was done. Where the work was done pursuant to a direct arrangement between the householder and the worker, s 12(11) would be attracted. It does not apply to workers engaged by labour hire entities to provide services to clients.
The Decision Impact Statement states as follows:
"This case is the first...decision to affirm the Commissioner's view that certain labour hire arrangements whereby labour hire firms supply or provide the services and labour of workers to client organisations come within the scope of s 12(3).
Consideration will be given to updating SGD 94/4: Is a person who provides home based child care an employee for the purposes of the Superannuation Guarantee (Administration) Act 1992 (SGAA)? to clarify that the exemption in s 12(11) of the SGAA does not apply to carers engaged by labour hire entities to provide child care services in the parent's home."