Summary LLW2601 SUMMARISED NOTES

• South Africa is regulated by 3 main sources: 1. The Constitution 2. Labour Legislation 3. The law of contract regulated by common law AN EMPLOYEE & AN INDEPENDENT CONTRACTOR • 5 tests that have been developed by the courts & are used to determine who is an employee & who is an independent contract: 1. Control test 2. Organization test 3. Dominant impression test 4. Economic capacity test 5. Reality test • Who is an employee: Any person, excluding an independent contractor, who works for another person or for the State & receives, or is entitled to receive, any remuneration; & any other person who in any manner assists in carrying on or conducting the business of an employer • Labour law protects employees against unfair dismissal or exploitation and victimisation in the workplace • Primary aims of the LRA is to promote sound relations between employers & employees in the workplace • Independent contractor: Contracted to perform a specified task or to produce a specific result (location conductio operis) • Employee is appointed to render personal services in terms of a job description (locatio conductio operarum) 1. CONTROL TEST • Looks at the control the employer has over the work the person does, manner in which work must be done, & when & where the work must be done 2. ORGANIZATION TEST • Looks at whether the person is part & parcel of the business / organization • Person’s work must be integrated into the business – not just an accessory to the business 3. DOMINANT IMPRESSION TEST • Favoured by the courts & considers employment relationship as a whole, rather than concentrating on only one factor Individual Labour Law – LLW2601 - SUMMARY Page 2 of 53 4. ECONOMIC CAPACITY TEST • In Niselow v Liberty Life the court added a so-called ‘economic capacity test’, in terms of which an employees’ income-earning capacity is solely dedicated to the employer 5. REALITY TEST • When determining the true status of a worker, the court will look at the ‘substance of the relationship as opposed to the form thereof • Control test (code: Who is an employee): control includes the right to determine what work the employee will do, in what manner & what the working hours will be • Control may be a term of contract • Organization test – code states inter alia • Traditional workplace no longer exists & employee does not need to work from employer’s premises in order for an employment relationship to exist • Tools of trade provided by the employer should not be interpreted narrowly and may range from a modern / cellphone package to a set of screwdrivers • Dominant – impression test, code confirms the importance of this test • States there is no single decisive factor to determine the existence or absence of an employment relationship & all factors should be considered when determining the nature of the relationship EMPLOYEE INDEPENDENT CONTRACTOR Object of the contract is to render personal services Object of the contract is to perform a specified work or produce specified results Employee must perform services personally IC may usually perform through others Employer may choose when to make use of the services of the employee IC must perform work (produce result) within a period fixed by the contract Contract terminates on death of the employee Contract does not necessarily terminate on death of IC Contract also terminates on expiry of the period of service in the contract Contract terminates on completion of work or production of specified results • LRA & BCEA amended in 2002 to include a rebuttable presumption as to who would be regarded as an employee • Presumptions do not apply to people earning more than the threshold amount determined by the MOL in terms of the BCEA (Section 83A(2)) • LRA reads as follows: (Section 200A): ‘Until the contrary is proved, for the purpose of this act…, a person who works for, or renders services to, any other person is presumed, regardless of the form of the contract, to be an employee, if any one or more of the following factors are present: (a) The manner in which the person works is subject to the control or direction of another person (b) The person’s hours of work are subject to the control or direction of another person (c) In the case of a person who works for an organization, the person forms part of that organization (d) The person has worked for that other person for an average of at least 40 hours per month over the last three months (e) Person is economically dependent on the other person for whom he works or renders services (f) Person is provided with tools of trade or work equipment by the other person (g) Person only works for or renders services to one person Individual Labour Law – LLW2601 - SUMMARY Page 3 of 53 Example: Richard sold newspapers for a Sunday newspaper, Paper Palace. This was his only source of income since he was unemployed during the week. Paper Palace had an area manager who phoned the vendors every Friday to arrange when and where they will be picked up. The vendors are paid on commission basis. When Richard’s services were terminated, he claimed unfair dismissal. The first step to get access to the ‘umbrella’ of labour law protection, is to show that at least one of the factors in the presumption had been present in the work relationship. Richard held that he was an employee because he reported to the area manager, he was supplied with the tools of the trade (posters and the newspapers to sell) and he was economically dependent on Paper Palace. Richard was consequently assumed to be an employee. Paper Palace then had the opportunity to rebut this assumption. They had presented the following facts to show on a balance of probabilities that Richard was not an employee: • Richard did not form part of the organization • The area member was a mere contact person for practical arrangements • Richard was not under the control of the employer, Paper Palace • The job necessitated him to work on Sundays and to be available to sell newspapers from 05h00 – 15h00 • The employer did not control what he did, so he could choose to sit under a tree for the duration of the time if he wanted • Richards was not economically dependent on Paper Palace as a result of their doing • He was allowed to work for any other employer during the week but since he was unemployed, the selling of newspapers was his only income • However, the employer did not force him to only use his economic capacity for this purpose The dominant impression test indicated that Richard was not an employee.