Case Study: Dental clinic liable for super guarantee charge

The Administrative Review Tribunal ('ART') recently considered whether an oral health therapist engaged by a dental clinic was an 'employee' for super guarantee purposes.

The clinic argued that the therapist was not an employee but was instead an independent contractor and, as such, the clinic was not liable for the super guarantee charge. 

The ART disagreed, and held that the therapist was an employee under the extended definition.

The extended definition of 'employee' for these purposes includes a person who works under a contract that is wholly or principally for the labour of the person.

In particular, the ART found that:

• the contract contained features consistent with an 'employment' arrangement;

• the therapist was part of a regulated profession and could not practise independently;

• the purpose of the contract was to engage the therapist personally to work as a member of an integrated team (rather than to provide her with the use of the clinic and its facilities for a fee);

• the clinic did not establish that she had a genuine right to delegate/subcontract her work; and

• the therapist was not directly rewarded for her services, as her remuneration was subject to adjustments applied by the clinic on patient invoices.

This is a timely reminder for clients that have contractors, that it may not necessarily mean their payments are automatically exempt from superannuation simply based on how they are engaged.

We recommend contacting our office if you engage contractors and are unsure of your obligations, or to assess whether they may fit into the extended definition of ‘employee’ for this purpose.