The Administrative Appeals Tribunal decided that the crew members of a commercial fishing vessel were not employees for the purposes of section 12(3) of the Superannuation Guarantee (Administration) Act 1992 (Cth).

Section 12(3) states that ‘if a person works under a contract that is wholly or principally for the labour of the person, the person is an employee of the other party to the contract’.

The Facts

The taxpayer operated a commercial fishing vessel which was usually captained by the director of the taxpayer. The captain would be joined on each voyage by up to four crew members who were typically experienced fishermen. The crew members were engaged for each voyage.

While it was at sea, the vessel would anchor at a central spot each day and the fishermen would each board a small motorised boat that would head off to remote locations where the crew members would spend all or part of the day fishing, before returning to the vessel to offload the fish caught that day.

The taxpayer would pay the individual fisherman under the terms of the separate agreement between the taxpayer and each fisherman of which the agreement referred to them as joint venturers.


The Senior Member noted that the agreement between the parties contemplates them operating as joint venturers – independent business people who are cooperating for the limited purpose of catching and ultimately selling fish. Individual crew members brought their skills and preferred equipment to the venture, and they could exit the arrangement if they wished (albeit there were some practical limits on their ability to leave the boat while it was at sea). The taxpayer provided equipment – most obviously the boat itself – and the skipper and marketing arrangements. But the equipment was effectively placed at the service of the joint venture, to be managed collectively during the voyage for the common end. The crew members, for their part, were free to fish on their own and they were paid for their output. The crew were not integrated into the taxpayer’s organisation; each of the parties had a function that they performed individually, albeit cooperatively.

Accordingly, the Senior Member decided that the contract was not wholly or principally for the labour of a crew member, but was a joint venture agreement intended to produce fish for sale. Despite the agreement contemplating the crew members contributing labour, they were remunerated on the basis of an outcome. If there was no outcome – if they did not catch any fish – there would be no remuneration. Indeed, it was theoretically possible under the agreement the crew might return to port owing money to the taxpayer if there were no fish caught on a voyage (although the director acknowledged that had never occurred).