Business taxation Employment taxes Employee vs contractor

Draft guidance on the meaning of an employee

Author: The Tax Institute

Published Date: 15 Mar 2023

 

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The recent decisions of the High Court in Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contacting Pty Ltd [2022] HCA 1 (Personnel Contracting) and ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2 (Jamsek), have signalled a major shift away from the approach the courts have historically adopted to characterise a worker as either an employee or independent contractor at general law. The judgment of Wigney J in JMC Pty Ltd v Commissioner of Taxation [2022] FCA 750 (JMC) is an example of how the courts have applied the principles in Personnel Contracting and Jamsek, with the analysis centred around the terms of the relevant employment contract. 

It is important for the guidance to be consistent with, and accurately reflect the reasoning of the High Court, including, in particular, the emphasis that the High Court has placed on legal rights and obligations being determined by reference only to the terms of the contract between the worker and the principal. 

 

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  • Published By:The Tax Institute
  • Published On:15 Mar 2023

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