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Independent Contractors in Higher Education: The Case of JMC Pty Ltd v Commissioner of Taxation [2023] FCAFC 76

In a pivotal judgment that will interest all educational institutions and professionals contracting in Australia, the Full Court of the Federal Court has overturned a previous decision in JMC Pty Ltd v Commissioner of Taxation [2022] FCA 750. This case has significant implications for the engagement of staff as either employees or independent contractors under Australian law.

Independent Contractors in Higher Education: The Case of JMC Pty Ltd v Commissioner of Taxation [2023] FCAFC 76
Independent Contractors in Higher Education: The Case of JMC Pty Ltd v Commissioner of Taxation [2023] FCAFC 76

Background of the Case

JMC Pty Limited, a registered provider of higher education programs, engaged Mr. Nicholas Harrison, a qualified sound engineer, to deliver lectures and mark assignments under a series of contracts from April 2013 to March 2018. JMC treated Mr. Harrison as an independent contractor, refraining from making superannuation contributions on his behalf. This arrangement was challenged by the Commissioner of Taxation, who argued that Mr. Harrison was an employee under both the ordinary and extended definitions of the Superannuation Guarantee (Administration) Act 1992 (Cth) (SGA Act).

Legal Arguments and Decision

The primary legal question was whether Mr. Harrison was an employee or an independent contractor. Under the SGA Act, this determination affects superannuation guarantee obligations.

The trial court had originally sided with the Commissioner, finding Mr. Harrison to be an employee. However, this decision was based on an interpretation that has since been questioned by recent High Court rulings, which emphasise that the terms of a written contract should primarily determine the nature of the employment relationship, provided the contract is not a sham.

In overturning the decision, the Full Court focused on the contractual terms agreed between JMC and Mr. Harrison. It noted that the contract provided Mr. Harrison the right to subcontract or assign his teaching duties, subject to JMC's approval, which is indicative of an independent contractor relationship. The Full Court also found that the nature of Mr. Harrison's remuneration, based on hours worked rather than a salary, supported this view.

Implications for the Education Sector

This decision underscores the importance for educational institutions of carefully drafting and executing contracts with those they engage in a teaching or similar capacity. The distinction between an employee and an independent contractor hinges significantly on the rights and obligations explicitly stated in the contract. It is crucial for contracts to clearly define the nature of the relationship and the degree of control over the work to be performed.

Educational providers must ensure that contracts with lecturers, particularly those who might traditionally be seen as part of the gig economy, accurately reflect the true nature of the relationship intended by both parties. This clarity will not only help in compliance with superannuation obligations but also ensure transparency and fairness for the contracted individuals.


The JMC Pty Ltd v Commissioner of Taxation [2023] FCAFC 76 case is a landmark ruling with wide-reaching consequences for contract law in the education sector. It serves as a critical reminder of the legal nuances involved in classifying workers and the need to remain vigilant and precise in contract formulations.

For institutions and individuals alike, understanding and implementing the legal standards confirmed by this case will be essential in navigating the complexities of employment relationships in Australia's evolving educational landscape.

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