Study Unit1
Who is an employee?
The LRA 1 defines an ‘employee’ as follows:
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 any other person who in any manner assists in
carrying on or conducting the business of an employer.
It is important to be able to draw a distinction between employees and other workers who do not qualify
as employees, so-called ‘independent contractors’.
An independent contractor is contracted to perform a specified task or to produce a specific result (also
referred to as the contract of work or in terms of the common law as the location conductio operis)
An employee is appointed to tender personal services in terms of a job description (also referred to as the
contract of service or in terms of the common law as the location conductio operarum).
Guidelines to distinguish between employees and independent contractors.
The courts have developed five tests to distinguish between employees and independent contractors.
The control test,
The organization test,
The dominant impression test
The economic capacity test
The reality test
Control test
The test looks at the control the employer has over the work the person does, the manner in which the
work must be done, and when and where the work must be done.
Organisation test
This test looks at whether the person is part and parcel of the business/ organization of the employer.
The person’s work must be integrated into the business of the employer and must not just be an
accessory to the business.
Dominant impression test
This test is favoured by the courts and considers the employment relationship as a whole, rather than
concentrating on only one factor (study the contents of the table below to learn more about this test).
Economic capacity test
In Niselow v Liberty Life the court added a so-called ‘economic capacity test’ in terms of which an
employee’s income-earning capacity is solely dedicated to the employer.
Reality test
The court in Denel (Pty) Ltd v Gerber” said that when determining the true status of a worker, the court
will look at the ‘substance of the relationship as opposed to the form thereof.
The LRA and the BCEA had been amended in 2002 to include a rebuttable presumption as to who would
be regarded as an employee.
The presumption implies that, as soon as one of the factors listed in section 200A it is found to exist in the
relationship between the two parties, that relationship is presumed to be an employment relationship.
,The courts look at the substance of the relationship between the parties rather than the form or the label
attached thereto.
For example, in Mokoena v MEC, Gauteng Department of Health, the Labour Court had to determine
whether the applicants who were engaged with the department on fixed-term contracts as volunteering
community health workers were employees or independent contractors.
When does the employment relationship start?
This was answered in Wyeth SA (Pty) Ltd v Manqele22 where the employee accepted an employment
offer but before he could commence with his duties his contract was terminated.
The employer argued that, based on the definition of section 213 of the LRA., an employee is only
someone who renders his services
The employee has not rendered any services and was therefore not entitled to remuneration.
The court held that the definition of an employee in section 213 of the LRA, be read to include a person
who has concluded a contract of employment and where the commencement is deferred to a future date
The court therefore held that people who have signed contracts of employment, but have not yet started
working, were employees for purposes of the LRA.
Non-standard empployees
The Act now determines that ‘non-standard forms of employment relate to temporary employees, fixed-
term employees and part-time employees
Chapter IX of the LRA regulates non-standard employment, extends mort protection to vulnerable
workers and promotes decent work.
The Act creates three categories of non-standard employees:
Employees provided by a temporary employment service
Fixed term employees
Part-time employees
Temporary employment service (‘TES’)
• Who is a temporary employee?
• A temporary employee is employed by a temporary employment service and a TES is defined as:
o any person who, for reward, procures for or provides to a client, other persons who render
services to, or perform work for, the client; and who are remunerated by the temporary
employment service.
• This refers to employees supplied to a client by a TES/labour broker, on temporary basis or to render
a temporary service for the client.
• Such a relationship is characterized by its triangular form as it involves three parties, namely, the
employee, the TES/labour broker and the client.
• An employer may appoint a temporary employee to a client for a period of three months or less or as a
substitute for an employee of the client who is temporarily absent and then the period may be for
longer than three months.
• Employees who earn more than the BCEA threshold of R205 433 are excluded from the protection
provided by the LRA for non-standard employees.
,• The temporary employee is regarded as an employee of the TES.
• The TES/labour broker is responsible for its statutory obligations regarding the placed worker for as
long as the employee renders a temporary service to the client.
• If there is non-compliance, for example, where the employee is not or no longer really performing a
temporary service for the client, she/he will be ‘deemed’ to be the employee of the client and
employed on an indefinite basis.
• According to the Labour Appeal Court, an employee who performs a temporary service £01 the client,
is the employee of the TES/labour broker and the employee who is not performing such temporary
service the client is deemed to be the employee of that client.
• What this means is that the question of who becomes the employer, is not answered by looking at the
person who performs the work or even by looking at the person who places that employee or the
person who receives the service, but by the nature of the service being performed.
Fixed·term employees
• This refers to a contract of employment that terminates on/at:
o The occurrence of a specified event,
o The completion of a specified task or protect
o A fixed date other than an employee’s normal or agreed retirement age
• The following employees are excluded from the restrictions with regard to fixed-term employee:
• employees earning mote than the BCEA threshold of R20S 433 per year.
• Employees of an employer that employs fewer than 10 employees, or a employer that employs fewer
than SO employees and whose business has been in operation for less than two years
• An employee employed in terms of a fixed-term contract permitted by any:
o Statute
o Sectoral determination
o Collective agreement
When will it be allowed?
A fixed-term contract would be allowed if the employee is appointed for a period of three months or less
An employer may employ an employee on a fixed-term contract or successive fixed-term contracts for
longer than three months only if:
• the nature of the work for which the employee is employed is of a limited or definite duration
• the employer can demonstrate any other justifiable reason for fixing the term of the contract.
The Act determines that justifiable reasons for a fixed-term employee will be where such an employee:
• Is replacing another employee who is temporarily absent from work,
• Is employed to perform seasonal work,
• Is employed for an official public works or similar scheme,
• Is employed to work exclusively on a specific project
What will happen if there is non-compliance with the lRA?
If a fixed-term contract does not comply with the above provisions, then
, It is not a fixed-term contract,
The employment is for an indefinite or permanent period and the fixed term contract worker
will become a permanent employee of the employer,
The employee must be treated as a permanent employee.
Part-time employees
• A part time employee is an employee who is remunerated wholly or partly by reference to the time that
the employee works, and who works less hours than a comparable full-time employee
• Since a part-time employee is still a permanent employee, the Act does not extend further job security
protection
• A ‘comparable full-time employee’ is an employee who is paid for a full day, who is considered to be a
full-time employee according to custom and practice and who performs the same or similar work as
the part-time employee.
• Provisions, however, will not apply to:
o Employees earning more than R20S 433 per year
o Employees who ordinarily work fewer than 24 hours a month
o Employees during the first three months of employment
• Take note that illegal workers and foreign workers are not employees for purposes of the LRA and as
a result cannot receive any protection from the Act. It is, however, also important to note that these
workers may still receive protection in terms of section 23 of the Constitution.
Protection and regulation of illegal and foreign workers
Illegal workers
• It is important to understand that in terms of the common law illegal employment contracts or contracts
in terms whereof people are employed to perform illegal work are void and unenforceable.
• This was the case in the series of Kylie cases.
• This case concerned the alleged unfair dismissal of a prostitute.
• The commissioner held that the CCMA did not have jurisdiction to hear the matter since it could only
deal with cases where a lawful employment contract existed between the parties.
• A prostitute, as an illegal worker, can never conclude a valid employment contract and consequently
never have access to the LRA remedies, she can still access the protection afforded by the
Constitution in terms of section 23.
• The purpose of the LRA’is to advance economic development, social Justice, labour, peace and the
democratization of the work place’ and that would be achieved by giving effect to section 23 of the
Constitution.
• Section 10 of the Constitution protects the dignity of ‘everyone’ and section 23 ensures that ‘everyone’
is entitled to fair labour practices. This protection would therefore extend even to sex workers.
• Instead of focusing on the sex worker’s criminal conduct, it focused on the wrong committed against
her
Who is an employee?
The LRA 1 defines an ‘employee’ as follows:
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 any other person who in any manner assists in
carrying on or conducting the business of an employer.
It is important to be able to draw a distinction between employees and other workers who do not qualify
as employees, so-called ‘independent contractors’.
An independent contractor is contracted to perform a specified task or to produce a specific result (also
referred to as the contract of work or in terms of the common law as the location conductio operis)
An employee is appointed to tender personal services in terms of a job description (also referred to as the
contract of service or in terms of the common law as the location conductio operarum).
Guidelines to distinguish between employees and independent contractors.
The courts have developed five tests to distinguish between employees and independent contractors.
The control test,
The organization test,
The dominant impression test
The economic capacity test
The reality test
Control test
The test looks at the control the employer has over the work the person does, the manner in which the
work must be done, and when and where the work must be done.
Organisation test
This test looks at whether the person is part and parcel of the business/ organization of the employer.
The person’s work must be integrated into the business of the employer and must not just be an
accessory to the business.
Dominant impression test
This test is favoured by the courts and considers the employment relationship as a whole, rather than
concentrating on only one factor (study the contents of the table below to learn more about this test).
Economic capacity test
In Niselow v Liberty Life the court added a so-called ‘economic capacity test’ in terms of which an
employee’s income-earning capacity is solely dedicated to the employer.
Reality test
The court in Denel (Pty) Ltd v Gerber” said that when determining the true status of a worker, the court
will look at the ‘substance of the relationship as opposed to the form thereof.
The LRA and the BCEA had been amended in 2002 to include a rebuttable presumption as to who would
be regarded as an employee.
The presumption implies that, as soon as one of the factors listed in section 200A it is found to exist in the
relationship between the two parties, that relationship is presumed to be an employment relationship.
,The courts look at the substance of the relationship between the parties rather than the form or the label
attached thereto.
For example, in Mokoena v MEC, Gauteng Department of Health, the Labour Court had to determine
whether the applicants who were engaged with the department on fixed-term contracts as volunteering
community health workers were employees or independent contractors.
When does the employment relationship start?
This was answered in Wyeth SA (Pty) Ltd v Manqele22 where the employee accepted an employment
offer but before he could commence with his duties his contract was terminated.
The employer argued that, based on the definition of section 213 of the LRA., an employee is only
someone who renders his services
The employee has not rendered any services and was therefore not entitled to remuneration.
The court held that the definition of an employee in section 213 of the LRA, be read to include a person
who has concluded a contract of employment and where the commencement is deferred to a future date
The court therefore held that people who have signed contracts of employment, but have not yet started
working, were employees for purposes of the LRA.
Non-standard empployees
The Act now determines that ‘non-standard forms of employment relate to temporary employees, fixed-
term employees and part-time employees
Chapter IX of the LRA regulates non-standard employment, extends mort protection to vulnerable
workers and promotes decent work.
The Act creates three categories of non-standard employees:
Employees provided by a temporary employment service
Fixed term employees
Part-time employees
Temporary employment service (‘TES’)
• Who is a temporary employee?
• A temporary employee is employed by a temporary employment service and a TES is defined as:
o any person who, for reward, procures for or provides to a client, other persons who render
services to, or perform work for, the client; and who are remunerated by the temporary
employment service.
• This refers to employees supplied to a client by a TES/labour broker, on temporary basis or to render
a temporary service for the client.
• Such a relationship is characterized by its triangular form as it involves three parties, namely, the
employee, the TES/labour broker and the client.
• An employer may appoint a temporary employee to a client for a period of three months or less or as a
substitute for an employee of the client who is temporarily absent and then the period may be for
longer than three months.
• Employees who earn more than the BCEA threshold of R205 433 are excluded from the protection
provided by the LRA for non-standard employees.
,• The temporary employee is regarded as an employee of the TES.
• The TES/labour broker is responsible for its statutory obligations regarding the placed worker for as
long as the employee renders a temporary service to the client.
• If there is non-compliance, for example, where the employee is not or no longer really performing a
temporary service for the client, she/he will be ‘deemed’ to be the employee of the client and
employed on an indefinite basis.
• According to the Labour Appeal Court, an employee who performs a temporary service £01 the client,
is the employee of the TES/labour broker and the employee who is not performing such temporary
service the client is deemed to be the employee of that client.
• What this means is that the question of who becomes the employer, is not answered by looking at the
person who performs the work or even by looking at the person who places that employee or the
person who receives the service, but by the nature of the service being performed.
Fixed·term employees
• This refers to a contract of employment that terminates on/at:
o The occurrence of a specified event,
o The completion of a specified task or protect
o A fixed date other than an employee’s normal or agreed retirement age
• The following employees are excluded from the restrictions with regard to fixed-term employee:
• employees earning mote than the BCEA threshold of R20S 433 per year.
• Employees of an employer that employs fewer than 10 employees, or a employer that employs fewer
than SO employees and whose business has been in operation for less than two years
• An employee employed in terms of a fixed-term contract permitted by any:
o Statute
o Sectoral determination
o Collective agreement
When will it be allowed?
A fixed-term contract would be allowed if the employee is appointed for a period of three months or less
An employer may employ an employee on a fixed-term contract or successive fixed-term contracts for
longer than three months only if:
• the nature of the work for which the employee is employed is of a limited or definite duration
• the employer can demonstrate any other justifiable reason for fixing the term of the contract.
The Act determines that justifiable reasons for a fixed-term employee will be where such an employee:
• Is replacing another employee who is temporarily absent from work,
• Is employed to perform seasonal work,
• Is employed for an official public works or similar scheme,
• Is employed to work exclusively on a specific project
What will happen if there is non-compliance with the lRA?
If a fixed-term contract does not comply with the above provisions, then
, It is not a fixed-term contract,
The employment is for an indefinite or permanent period and the fixed term contract worker
will become a permanent employee of the employer,
The employee must be treated as a permanent employee.
Part-time employees
• A part time employee is an employee who is remunerated wholly or partly by reference to the time that
the employee works, and who works less hours than a comparable full-time employee
• Since a part-time employee is still a permanent employee, the Act does not extend further job security
protection
• A ‘comparable full-time employee’ is an employee who is paid for a full day, who is considered to be a
full-time employee according to custom and practice and who performs the same or similar work as
the part-time employee.
• Provisions, however, will not apply to:
o Employees earning more than R20S 433 per year
o Employees who ordinarily work fewer than 24 hours a month
o Employees during the first three months of employment
• Take note that illegal workers and foreign workers are not employees for purposes of the LRA and as
a result cannot receive any protection from the Act. It is, however, also important to note that these
workers may still receive protection in terms of section 23 of the Constitution.
Protection and regulation of illegal and foreign workers
Illegal workers
• It is important to understand that in terms of the common law illegal employment contracts or contracts
in terms whereof people are employed to perform illegal work are void and unenforceable.
• This was the case in the series of Kylie cases.
• This case concerned the alleged unfair dismissal of a prostitute.
• The commissioner held that the CCMA did not have jurisdiction to hear the matter since it could only
deal with cases where a lawful employment contract existed between the parties.
• A prostitute, as an illegal worker, can never conclude a valid employment contract and consequently
never have access to the LRA remedies, she can still access the protection afforded by the
Constitution in terms of section 23.
• The purpose of the LRA’is to advance economic development, social Justice, labour, peace and the
democratization of the work place’ and that would be achieved by giving effect to section 23 of the
Constitution.
• Section 10 of the Constitution protects the dignity of ‘everyone’ and section 23 ensures that ‘everyone’
is entitled to fair labour practices. This protection would therefore extend even to sex workers.
• Instead of focusing on the sex worker’s criminal conduct, it focused on the wrong committed against
her
