Are You Sure Of Your Obligations As An Employer?

A couple of weeks ago the Federal Court of Australia passed a judgement that a claim lodged by dentist for unpaid superannuation payments be paid to him by the organisation that engaged him.

The dentist had been engaged by the organisation as a “contractor” and the court ruled that under the superannuation laws the dentist was deemed to be eligible for the unpaid superannuation entitlements.

However claims by the same dentist for unpaid annual leave and unpaid long service leave were dismissed as under those acts, the dentist was ruled to be ineligible.

As one commentator said:

“It’s all a bit weird.”

And you would think so….

Same situation, three different awards.

Two rulings one way, and one ruling the other way.

One commentator asked how this can be so?

And I am not sure.

The  ATO website says that if you are primarily exchanging your labour for [units of] money then you are deemed an employee.

And seeing that the dentist in this situation was doing that, you would think he would have been an employee in all situations.

And be entitled to claim ALL of his unpaid entitlements.

After all, he turned up, with only his hands and his education, and without any equipment or uniforms, and was provided with the tools and the materials and the chairs and the staff to be able to treat the patients who were appointed to him by the organisation. 

And the patients were deemed to be owned by the organisation.

The patient treatment records were all owned by the organisation.

The dentist just provided “sweat equity” only.

Yet there was no equity.

Importantly, this ruling on superannuation is not time restricted. 

In fact, in a previous independent action, the Federal Government of Australia has already some time ago paid and back paid superannuation entitlements to “contractor” dentists that it engaged.

It seems there is now a definite precedent for further claims by all dentists engaged in similar situations.…. and maybe other professions could be interested as well.

And I would imagine the fines that the ATO would impose on any organisation failing its superannuation responsibilities, could be significant.

Agreements that are set up to imply that employees who provide labour are somehow “contractors” running their own businesses are usually written with the primary intention of avoidance of paying payroll tax by the organisations.

And superannuation obligations it would seem.

And as the ATO website says, just because that’s the way it has always been done, and just because everyone else is doing it this way, doesn’t mean it’s the right way.

Any resemblance of any person, character, entity, organisation or charity described in this article to any person or entity living, or dead, or unborn, or uncreated, is purely coincidental, imaginary and delusionary.

Readers of this article interested in comparing their own situations to those imaginary situations described in this article should employ their own due diligences.


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