Summary MRL3702_Labour_law_notes

GENERAL: Labour law consists of two main components: 1. Individual labour law 2. Collective labour law INDIVIDUAL LABOUR LAW:  Includes topics such as the formation of the employment relationship, the content of the relationship, and the termination of the relationship.  The assumption here is that the employment relationship exists between two single entities i.e. between a single employer and a single employee COLLECTIVE LABOUR LAW:  Focuses on relationships on a collective level, in other words a number of people are acting together (collectively) to influence this relationship  Collective labour law looks at groups, for example collective entities such as trade unions and employer’s organisations THE MOST IMPORTANT LEGISLATION REGARDING LABOUR LAW IS:  Labour Relations Act 1995 (LRA)  Basic Conditions of Employment Act 1997 (BCEA)  Employment Equity Act 1998 (EEA)  Skills Development Act 1998 (SDA)  Occupational Health and Safety Act 1993 (OHSA)  Mine Health and Safety Act 1996 (MHSA) Page 1 of 89 LABOUR LAW NOTES CHAPTER 2: EXCLUSIVE PROTECTION FOR EMPLOYEES IN TERMS OF LEGISLATION WHAT IS AN EMPLOYMENT CONTRACT? The contract of employment:  is a voluntary agreement between two parties in terms of which  one party (the employee) places his or her labour potential at the disposal and under the control  of the other party (the employer) in exchange for some form of remuneration WHO IS AN EMPLOYEE? The LRA, BCEA, EEA and SEA all use the same definition of an “employee”, and employee is: (a) Any person, excluding an independent contractor, who works for another person or for the State and who receives, or is entitled to receive, any remuneration; and (b) Any person who in any manner assists in carrying on or conducting the business of an employer Part (a) of the definition includes both employees:  in the private sector (“who works for another person”)  and the public sector (“or for the state”)  the definition also includes domestic and farm workers as employees Part (a) incorporates the common-law contract of service (locatio conduction operarum) and excludes the contract of work (locatio conduction operis), which relates to the contract of work Part (b) includes any person who in any manner assists in carrying on or conducting the business of the employer, it should be noted that this part is couched in broader terms and can include various categories of workers, which complicates the matter as far as the distinction between an employee and independent contractor is concerned. Such categories include:  permanent employees  temporary employees  casual workers  contract workers  part-time employees  self-employed people  and others such as seasonal workers The difficulty in determining who qualifies as an employee and who does not has prompted the courts to formulate various tests to distinguish between them, the various test are:  the control test,  the organisation test, and  the dominant impression test Page 2 of 89 LABOUR LAW NOTES Control Test Organisation Test Dominant Impression Test The test looks at the control:  over the type of work the person does,  the manner in which the work must be done and  when the work must be done This test looks at whether the person is:  part and parcel of the business  the person’s work is integrated into the business of the employer and not just an accessory to the business This test is favoured by the courts and considers:  the employment relationship as a whole rather than concentrating on one factor These tests help clarify the concept of “employee”, but were not sufficiently clear to solve a problem As a result, the LRA and BCEA were amended in 2002 to include rebuttable presumption as to who would be regarded as an employee The presumption applies that as soon as one of the factors listed in section 200A of the LRA or section 83A of the BCEA, is found to exist in the relationship between two parties, there is presumed to be an employment relationship The other party then has the opportunity to show, on a balance of probabilities that no such relationship exists The presumption will however not apply:  to any person earning more than the amount determined by the Minister in terms of the BCEA, and  to a work arrangement involving persons who earn amounts equal to or below the amount determined by the Minister Section 200A of the LRA reads as follows: “Until the contrary is proved, a person who works for, or renders services to, any other person is presumed to be an employee, if any one or more of the following factors are present: (a) manner in which the person works is subject to the control or direction of another person; (b) person’s hours of work are subject to the control or direction of another person; (c) the case of a person who works for an organisation, the person forms part of that organisation (d) person has worked for that person for an average of 40 hours per month over the last three months; (e) person is economically dependent on the person for whom he or she works or renders services; (f) person is provided with tools of trade or work equipment by the other person, or (g) person only works for or renders services to one person” Section 200A and 83A should be read with the Code: Who is an Employee? The Code incorporates the three tests developed by the courts, but goes further and provides guidance for the possible interpretation and application of these tests in a modern context Page 3 of 89 LABOUR LAW NOTES For example, as far as the control test is concerned the Code determines:  control includes the right to determine what work the employee will do, in what manner and that the employees working hours will be, and  control may be a term of the contract, but even where it is not specified in the contract, it does not necessarily mean there is not a contract of employment As far as the organisation test is concerned the Code states inter alia that:  the traditional workplace no longer exists and the employee does not need to work from the employer’s premises to indicate that there is an employment relationship, and  the tools of trade provided by the employer should not be interpreted narrowly and may range from a modem or a cell phone package to a set of screw drivers As far as the dominant impression test is concerned, the Code confirms the importance of this test  it states that there is no single decisive factor to determine the existence or absence of an employment relationship  therefore all factors should be taken into account when determining the type of relationship  a table has been developed from case law on the subject and can be used as part of the application for the dominant impression test: Employee Independent contractor Object of contract is to render personal services Object of contract is to perform specified work or produce specified results Employee must perform services personally Independent contractor may usually perform through others Employer may choose when to make use of services of employee Independent contractor must perform work (or produce result) within period fixed by contract Contract terminates on death of employee Contract does not necessarily terminate on the death of the employee Contract also terminates on expiry of period of service in contract Contract terminates on completion of work or production of specified results It can be safely stated that the courts are generally in favour of the purposive and expansive interpretation than the restrictive approach to the definition of an “employee” in recent years WHAT IS AN IDEPENDANT CONTRACTOR? “Independent contractor” means:  a person who works for or supplies services to a client or customer  as part of the person’s business undertaking or professional practice - as amended by the Labour Relations Amendment Bill and proposed by the BCEA