Sportspeople, sports contractors and superannuation
Whether or not a contractor is an "employee" for the
purposes of determining if compulsory superannuation contributions
need to be made, is not always clear, particularly when the
services they provide are connected to sport.
Section 12 of the Superannuation Guarantee (Administration)
Act 1992 (Cth) (SGA Act) extends the definition of
"employee" to certain activities that are engaged in by
sportspeople who would not be considered an "employee"
within the ordinary meaning of the word.
Players and athletes
The essential requirement is that the sportsperson is "paid
to perform". Accordingly, a sportsperson who is paid
"appearance fees" and similar payments to participate in
a sporting activity may be deemed an "employee" of the
payer under the SGA Act thus triggering the requirements for
compulsory employer superannuation contributions.
International sportspersons may also fall into the category of
"employee" despite being a "non-resident" of
Australia. If an international sportsperson is paid to perform or
appear at a sporting event, the payer may need to make
superannuation contributions unless a certificate of coverage made
under an international social security agreement is provided.
Sports related contractors
The SGA Act does not, however, require a person to actively
participate in the sport before being deemed an
"employee". Provided services are performed "in
connection with" a sporting activity and are "bound
up" in that activity, this may be enough for an individual to
be considered an "employee" under the SGA Act. For
example, sportspersons who are paid to appear on television or
radio broadcasts to promote a sporting organisation's event may
be deemed "employees".
Furthermore, services may also be performed before or after the
sporting activity occurs. In this respect, the provisions of the
SGA Act are intended to catch "behind the scenes" sports
services provided by umpires, referees, physiotherapists,
dieticians, team officials, coaching staff and mentors.
It is not, however, "game, set and match" for sports
contractors over the sporting organisations they work with. If an
individual is engaged to provide services to a sporting
organisation and has a right to delegate these activities to
another person or where that individual works for a number of
organisations, that person may not be deemed an employee under the
SGA Act. Each contract must be looked at on its own terms and
reference must be made to the substance of the arrangement and not
merely to what the parties agree to label the payment.
Review contractor arrangements
It is recommended that sporting organisations review their
contractor arrangements to determine whether there are any
contractors who fall within the expanded definition of
"employee" under the SGA Act. Failure to review those
contractor arrangements in a timely fashion could expose the
sporting organisation to catch up employer superannuation
contributions and late payment penalties under the SGA Act.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Long experience representing many of Australia's leading employers has taught us that in employment litigation the identity of an employee's representative is a major factor in how employee litigation runs.
Australian employees receive certain entitlements (such as annual leave and superannuation) where contractors do not.
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