Study Unit 3

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Study unit 3

Parties to the employment relationship


Study outcomes
1. Distinguish between employee and independent contractor
2. Indicate why this distinction is important
3. Define “employee”
4. Distinguish between the tests for the existence of an employment
relationship. Apply.
5. Understand the role and application of the statutory presumption of
who is an employee. Apply.
6. List the persons excluded from the definition of an employee
7. Distinguish different atypical employees and how the legislation
provide for them
8. Define “employer”
Prescribed case law

1. SABC v McKenzie 1999 20 ILJ 585 (LC)


2. Medical Association of SA v Minister of Health 1997 18 ILJ
528 (LC)
3. Workforce Group v CCMA 2012 33 ILJ 738 (LC)
4. Denel v Gerber 2005 9 BLLR 849 (LAC)
5. Mandla v LAD Brokers 2000 21 ILJ 1807 (LC)
6. Linda Erasmus Properties Enterprise v Mhlongo 2007 6
BLLR 530 (LC)
7. Mokoena v Member of Executive Council 2016 37 ILJ 1445
(LC)
8. Kylie v CCMA 2010 31 ILJ 1600 (LAC)
9. Discovery Health Ltd v CCMA 2008 29 ILJ 1918 (LC)
Determination of employment relationship

1. Why is it important?
2. What are the implications?
3. Usually look at the contract first to determine the nature of
the relationship
Independent contractor

Pete is a construction
contractor

Which elements make


him an independent
contractor?
Employee

Stephan is a tele-
marketer

Which elements make


him an employee?
Thus: Employee and IC
Locatio conductio operarum Locatio conductio operis
(Employee) (Independent contractor)

Object is the rendering of personal services between Object is the production of a certain specified service or
employer and employee the production of a certain specified result

Employee renders service at the behest of employer Independent contractor is not obliged to perform work
personally unless otherwise agreed

Employer may decide whether it wishes to have Independent contractor is bound to perform specified work
employee render service or produce specified result within a specified or reasonable
time

Employee is obliged to obey lawful, reasonable


instructions regarding work to be done and manner in Independent contractor is not obliged to obey instructions
which it is to be done regarding manner in which task is to be performed

Terminated by the death of the employee Not terminated by the death of the contractor

Terminates on completion of the agreed period Terminates on completion of the specified work or
production of the specified result
Statutory employee

1. Common law: Narrow definition


2. Statutory definition extended
3. Definition in two parts
a. Standard understanding of employee
b. Extended to include other types of employees – thus
wider protection
Statutory employee

4. Statutory definition contains more people than the common law


definition
5. Atypical employees now also covered
6. Should the employment contract be valid for a person to be deemed an
“employee”?
7. Remember: Discovery Health v CCMA and Kylie v CCMA
8. Who else expressly excluded from the definition?
4 Tests for employment relationship

1. Employment relationship not always easily determined


2. Factors of IC and employee can overlap
3. Courts developed tests
4. Employment relationship determined on case by case basis
5. See: Denel v Gerber; Mandla v LAD Brokers; Workforce Group v
CCMA
4 Tests for employment relationship

1. Control test
2. Organisation test
3. Dominant impression test
4. Economic test
Pete concluded a contract with another person in 2015, in terms of which
he would personally do deliveries for the other person. In terms of the
contract the worker works for a monthly commission. The other person
allows him the freedom to determine his own working hours (although he
has to work at least 30 hours a week). The contract provides that Pete may
not work for another company during the period of his contract. The
contract between the parties further stated that Pete has the obligation to
spend all the working hours performing his prescribed work, that he has
the obligation to perform the duties given to him from time to time by the
other person in a way as required, and he should comply with the internal
policies of the business. It is expected of Pete to provide the other person
with a monthly report summarising all the deliveries made that month. A
vehicle is made available to Pete to do the deliveries.
Statutory presumption: Who is an employee?

- S 200A of the LRA and S 83A of the BCEA (content identical)


- A “codification” of the common law tests and something extra
- Only applicable when person earns below certain annual income threshold
- Creates a rebuttable presumption that a person is an employee if at least
one of the seven factors is present in the circumstances
- See Code of Good Practice: Who is an Employee?
Atypical employees

 Fixed term employees (section 198B of the LRA)


- Contract terminates automatically at the end. Not exceed 3 months,
unless with good reason.
 Part time employees (section 198C of the LRA)
- Work less hours a day or fewer days a week. Remuneration calculated by
way of hourly fees. Full employee status and benefits.
 Temporary employees (section 198A of the LRA)
- Employees provided to a client by an agent. Agent and employee
concludes employment contract. Client and agent concludes commercial

contract. Agent pays the salary, client pays a fee to A.


Who is the employer?

1. Employer not defined in labour legislation


2. Cohen says:

"…by using the correlative of the definition of employee an employer can be


identified as any person who employs or provides work for an employee and
remunerates him or her for such services or permits such employee to assist
him or her in the carrying on or conducting of his or her business…"

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