Jamsek v ZG Operations Australia Pty Ltd (No 3)  FCAFC 48 – Full Court finds truck drivers not employees under extended definition
The Full Federal Court has ruled that individual truck drivers who provided delivery services to a company over an extended period via their respective partnerships with their wives were not ’employees’ of that company within the extended definition of that term for the purposes of the Superannuation Guarantee (Administration) Act 1992 (Cth). In determining the High Court’s remittal of the respondent’s cross-appeal in ZG Operations Australia Pty Ltd v Jamsek  HCA 2 (in which the High Court determined that the truck drivers were independent contractors and not employees within the ordinary meaning of that term), the Full Federal Court held that section 12(3) is only capable of applying where an identified natural person is a party to a contract in their individual capacity. As the truck drivers were parties to the relevant contracts in their capacity as partners of their respective partnerships, the provision could not apply. Further, the Court was satisfied that the relevant contracts were not wholly or principally “for” the labour of the truck drivers as what ZG received under them was ‘a single integrated benefit being a delivery service to be carried out by the partnership, using the partnership’s resources at the partnership’s risk and fully insured at the partnership expense.’
The decision is undeniably noteworthy, serving to provide some much needed certainty on the potential scope of section 12(3). It is definitely worth understanding the Full Court’s reasoning in detail, and as such we will discuss the case further in our upcoming Employee / Contractor webinar. More details regarding that webinar will follow in next week’s Birchstone Brief.
Sunlite Australia Pty Ltd v FCT  FCAFC 43 – R&D expenditure incurred by corporate trustee not deductible
The Full Federal Court has confirmed that R&D expenditure incurred by a company in its capacity as trustee of a trust was not deductible under the R&D provisions as it was not incurred by the company in its own right. In so doing, the Court dismissed the taxpayer’s appeal against the AAT’s decision in  AATA 4070.