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ARTICLE · 28 FEBRUARY 2023

Employee or independent contractor? ATO releases draft guidance

Mellor Olsson
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Businesses must take care in correctly determining the character of the relationships with their workers.

AustraliaTax
John Love
John Love
Ben Smith
Ben Smith
Maida Mujkic
Maida Mujkic
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On 12 December 2022, the Australian Taxation Office released a draft ruling and practical compliance guideline clarifying the Commissioner of Taxation's views and approach to worker classification after the High Court decisions in Jamsek and Personnel Contracting.

The High Court's approach in those cases involved a focus on the terms of the written contract to establish the character of the relationship between a business and its workers. You can read our previous article about those decisions here.

Previously, the nature of an employment relationship was determined by the "multi-factorial test" which involved an analysis of the totality of the relationship, including the post-contractual conduct of the parties, not just the terms of the written contract.

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