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31 Mar 2023

Not easy to be super - Full Federal Court confirms meaning of ‘employee’ for superannuation purposes

As outlined in our article available here, in February 2022, the High Court determined that two truck drivers who, in partnership with their spouses, provided delivery services for ZG Operations were independent contractors and not employees for the purposes of the general law.

One matter which was left unresolved was whether the drivers, notwithstanding their contractor status under the general law, were nevertheless entitled to superannuation. The High Court referred this issue to the Full Federal Court for determination.

Last week the Full Federal Court handed down its decision, finding that the truck drivers were not entitled to superannuation.


In order to be eligible for superannuation under section 12(3) of the Superannuation Guarantee (Administration) Act 1992 (Cth) (SGA Act), the drivers needed to satisfy the court that they were engaged to work under a contract which was wholly or principally for their labour.

In reaching its unanimous decision, the court found that:

  • the drivers themselves were not parties to any contract. Rather, it was their partnerships which contracted with ZG Operations;
  • the contracts were not “wholly or principally” for the drivers’ labour, as the benefit received by ZG Operations was a delivery service that included a labour component in addition to the benefit of the equipment (namely the trucks) which the drivers supplied; and
  • under the terms of the contracts, the partnerships were able to delegate performance of the services to substitute drivers, such that the performance of the contracts were not personal to the particular drivers. The fact that the right of delegation was not unconditional and required the consent of ZG Operations did not change the position.


This decision confirms the importance of a written contractor agreement incorporating an express right of delegation, which need not be unfettered, in order to mitigate the risk of the contractor being eligible for superannuation under the SGA Act.

The Full Federal Court has also clarified that a superannuation liability under s 12(3) of the SGA Act will only arise if the putative employee is a natural person and is a party to the contract in his or her individual capacity.

This article provides general commentary only. It is not legal advice. Before acting on the basis of any material contained in this article, seek professional advice.

Author: Lachlan Chuong

Position: Associate

Practice: Disputes


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