Edited version of private advice

Authorisation Number: 1051505477304

Date of advice: 21 May 2019

Ruling

Subject: Employee or Contractor

Question

Were the instructors considered employees for the purposes of section 12-35 of Schedule 1 of the Taxation Administration Act 1953?

Answer

Yes. We agree with decision of the Superannuation Business area. You are now required to lodge Pay As You Go withholding for the workers commencing with the reporting period starting from 30 March 20XX onwards.

This ruling applies for the following period:

Year ending 30 June 20XX

The scheme commences on:

31 March 20XX

Relevant facts and circumstances

The Principal is a registered charity.

The Principal's primary activity is to provide products, services and facilities to the members of the community which complement and support the activities of the entity. Services and facilities provided include sporting and recreational facilities, food, beverage, and etc.

The Workers were engaged between quarters ending 31 March 20XX and 30 June 20XX (the Period).

The Workers were engaged under a written contract (the Agreement). The Principal is the Company as referred to in the Agreement.

The Agreement states,

'The Contactor will agree to provide Business services in accordance with Schedule 1- Statement of Duties and in accordance with the timeline identified and agreed with the Company in Schedule 2'.

Schedule sets out a 'Statement of Duties" which outlines how the Workers are required to conduct themselves when working. This includes:

·         Operate within the Code of Conduct for the Principal

·         follow centre procedures including;

·         collection and submission of attendance cards

·         implementing the current Principal service or promotional strategies during class

·         reading and responding to all memos

·         operating within all customer service policies

·         participation in casual staff appraisals

·         attend quarterly Principal meetings;

·         effectively contributing to the team; and

The Workers were required to deal with customer enquiries in a 'knowledgeable, timely and friendly manner'.

The Workers were required to deliver freestyle and pre-choreographed group fitness classes.

The Workers were contracted to work as required and hours were based on the consumer demand for classes.

Under the Agreement, the Workers were required to submit a timesheet/tax invoice to the Principal for work completed. Rates were subject to negotiation with the Principal.

The Principal provided all necessary equipment for the role. The Workers were provided with an optional shirt.

The Workers worked as required, they were not given a set amount of work and frequently worked at other workplaces.

In the event that a Worker was unable to fulfil a contracted class, they were required to find a replacement to act in their absence. If they were unable to find a replacement, the Principal would find a substitute to avoid cancelling the class. Replacement instructors were paid by the Principal.

The Agreement made no provision for sick or annual leave.

The Workers were required to hold an Australian Business Number and were able to, and did, undertake work for different organisations.

Under the Agreement, all Intellectual Property developed, created or conceived by the Worker was the property of the Principal.

Under the Agreement, Workers are responsible for indemnifying the Principal against all claims and are personally responsible for harm caused to customers.

Relevant legislative provisions

Taxation Administration Act 1953 Section 12-35 of Schedule 1

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