Parties South African labour law

1 parties

1.1 identification
1.2 common law
1.3 statutes
1.4 courts

1.4.1 control test
1.4.2 organisation test
1.4.3 multiple or dominant-impression test
1.4.4 productive capacity test
1.4.5 differences between employees , independent contractors
1.4.6 labour relations act 1995 s 200a


1.5 essentials

1.5.1 agreement
1.5.2 work
1.5.3 remuneration
1.5.4 reciprocity
1.5.5 summary


1.6 duties

1.6.1 employer

1.6.1.1 receipt service
1.6.1.2 payment
1.6.1.3 safe , healthy working conditions
1.6.1.4 remedies


1.6.2 employee

1.6.2.1 entering , remaining in service
1.6.2.2 reasonable efficiency
1.6.2.3 furthering employer’s business interests
1.6.2.4 respect , obedience
1.6.2.5 refraining misconduct generally
1.6.2.6 remedies

parties
identification

the first question asked, when seeking resolve labour law problem, whether parties indeed employees , employers within meaning of applicable statute or common law.

this has long been difficult task in south africa, not apparent whether parties have entered locatio conductio operarum (contract of employment) or merely locatio conductio operis (contract of work).

distinguishing between these 2 kinds of contracts critically important, different legal consequences flow various forms of contract. important south african labour legislation applies in respect of employees, entitled social security benefits , have access statutory mechanisms if wish seek remedies violations of employment rights. similarly, employers bound labour statutes, , vicariously liable delicts of employees.

common law

the first source examined, when seeking determine whether parties work relationship employers , employees, contract have entered.

a contract of employment comes existence when parties conclude agreement conforms requirements of locatio conductio operarum. contract of employment traditionally defined contract between 2 persons, master (employer) , servant (employee), letting , hiring of latter s services reward, master being able supervise , control servant’s work.

this, however, begs question of how supervision or control required distinguish between employees , independent contractors.

reported judgments have indicated task of distinguishing employees , employers parties other contractual relationships entailing provision of work, or rendering of services, not matter of definition; classification of such contracts matter of substance, not merely of form.

the true nature of contract, therefore, determined relationship between parties, not merely label parties have given contract.

statutes

statutory definitions not resolve problem. employee defined

in section 213 of labour relations act 1995 as

person excluding independent contractor, works person or state, , receives, or entitled receive, remuneration; and
other person in manner assists in carrying on or conducting business of employer;


in section 1 of basic conditions of employment act in same words; but
in section 1 of eea person other independent contractor who

works person or state , receives, or entitled receive, remuneration; and
in manner assists in carrying on or conducting business of employer.

the difference between labour relations act 1995 , eea labour relations act 1995 excludes independent contractors in section 213(a), while eea excludes independent contractors in both subsections. safe, however, assume second part of definition of employee, appears in labour relations act 1995 or basic conditions of employment act, independent contractors implicitly excluded.

at core of subsection (a) of both definitions lies reference contract of employment: 1 person working in exchange form of remuneration.

the basic idea behind subsection (b) of both definitions employees people place capacity work @ disposal of others. essence of employment.

the case of liberty life association of africa v niselow reiterates law set out above , interpretation of definition of employee.

courts

labour legislation not define contract of service or concept of work @ all.

this means necessary outside legislation determine meaning of these terms, in order distinguish between employee , independent contractor.

the courts have formulated number of tests drawing distinction.

control test

the control test focuses on element of control exercised employer on employee.

the power control has traditionally been regarded hallmark of employment contract. advent of highly skilled employees given free rein in performing duties, courts no longer insist on de facto control, once did, recognise right control sufficient.

the courts applied requirement of right control rather strictly, in r v amca services, presiding officer spoke of right control, not end achieved other’s labour , general lines followed, detailed manner in work performed.

it clear, however, courts have in mind, right control in principle. employer not choosing exercise right not render contract other 1 of employment.

the application of control test in isolation entirely inadequate, employees have wide discretion how perform work. such discretion not alone render them independent contractors.

the ultimate difference between employee , independent contractor principal has no legal right prescribe manner in independent contractor brings desired result, may prescribe methods employee works. in colonial mutual life assurance society v macdonald, court held employee subject control of employer in sense latter had right prescribe not work had done, manner in work had done. independent contractor, on other hand, directed work must done, not how done.

in event, define contract in terms of 1 of characteristics tautological.

organisation test

the organisation test developed in french law , adopted south african law in r v amca services , another. based upon assumption whether or not 1 employment not rest on submission orders; depends on whether person part , parcel of organisation.

in other words, 1 looks @ extent person (the worker) integrated organisation of other person (the employer), or whether person performing work inside organisation of another.

the work of independent contractor, although done business, not integrated it; accessory it.

if person incorporated or related sufficiently organisation, person regarded employee or worker though employer might exercise little actual control on him.

one of problems test is not possible measure extent of integration, or determine degree of integration sufficient qualify employee.

the test rejected appellate division in s v amca services on basis of being vague.

multiple or dominant-impression test

the deficiencies of control , organisation tests led courts approach question in same way approach many other problems: relationship viewed whole; conclusion drawn entire picture.

in ongevallekommissaris v onderlinge versekeringsgenootskap av-bob, although court did not spell out may included in general picture, guidance may derived english case of ready mixed concrete v minister of pensions , national insurance, in presiding officer set out 3 possible components:

when courts examine other provisions of contract, consider relevant aspects of relationship. these include:

the form of contract;
the right supervision (in other words, whether employer has right supervise person);
the extent worker depends on employer in performance of duties;
whether employee not allowed work another;
whether worker required devote specific amount of time work;
whether worker obliged perform duties personally;
whether worker paid according fixed rate or commission;
whether worker provides own tools , equipment; and
whether employer has right discipline, suspend , dismiss worker.

the decisive difference between control test , dominant-impression test that, in latter, existence or absence of control 1 of factors taken account.

in smit v workmen s compensation commissioner, court had decide whether smit, had been employed agent insurance company, employee or not. had been

remunerated on commission-basis;
forbidden perform acts (such pledging company’s credit) without written authority;
forbidden working company @ same time, not required work full-time , other work @ different times;
given use of company motor-car, had pay out of own pocket fuel , servicing;
working closely manager, there total absence of right of supervision , control of smit insurance company; and
able obtain assistance others in performing duties.

the dominant-impression test followed in case, , smit held not employee of insurance company.

in medical association of sa v minister of health, several district surgeons challenged decision of provincial mec health free state terminate contracts summarily part of restructuring of district health service. multiple or dominant impression test followed, , court used factors discussed in smit assist in obtaining dominant impression part-time district surgeons in fact employees of state.

the court held dominant-impression tests entails 1 should have regard considerations or indica contribute towards determination of whether contract 1 of service or of work, , react impression 1 gets upon consideration of such indica. labour court based decision on following factors:

the doctors rendered personal services.
the doctors expected @ beck , call of employer 24 hours day, , give preference official duties on in private practices.
the employer obliged pay contractual salary doctors in absence of actual work being performed, long doctors made available work.
even though doctors professionals, provincial administration did have control on way in services rendered.

the test has been subjected severe criticism. etienne mureinik has said test

offers no guidance in answering (legal) question whether facts of such nature individual may held servant within meaning of common law in difficult (penumbral) cases. indeed, no test @ all. employment contract contract looks 1 of employment sheds no light whatsoever on legal nature of relationship.

this criticism based on idea not helpful particular relationship exists because looks does.

productive capacity test

in other decisions, courts appear have resorted may described productive capacity test.

this test formulated in martin brassey’s article nature of employment in following terms:

the independent contractor “sells job” whereas employee “sells hands” [... e]mployment relationship in 1 person obliged, contract or otherwise, place or capacity work @ disposal of [... a]n employee distinguished independent contractor, undertakes deliver, not or capacity produce, product of capacity, completed work.

differences between employees , independent contractors

in sa broadcasting corporation v mckenzie, labour appeal court summarised main differences between contract of employment proper , called contract of work (locatio conductio operis):

in first, object rendering of personal services between employer , employee; in second, object production of specified service or production of specified result.
the employee renders service @ behest of employer; independent contractor not obliged perform work personally, unless otherwise agreed.
the employer may decide whether wishes have employee render service; independent contractor bound perform specified work or produce specified result within specified or reasonable time.
the employee obliged obey lawful, reasonable instructions regarding work done, , manner in done; independent contractor not obliged obey instructions regarding manner in task performed.
a contract of employment proper terminated death of employee; contract of work not terminated death of contractor.
a contract of employment terminates on completion of agreed period; contract of work terminates on completion of specified work, or on production of specified result.

labour relations act 1995 s 200a

there little work cannot outsourced. outsourcing not supported trade unions, represent employees. if work outsourced, worker independent contractor. political pressure placed on government move away outsourcing , more towards employment.

in 2002, accordingly, new presumption added labour relations act 1995, providing guidelines on when has ascertained whether or not employee. presumption introduced part of significant amendments labour relations act 1995 , basic conditions of employment act in 2002.

the effect of rebuttable presumption that, if 1 or more of list of factors present, person presumed employee unless , until contrary proven. many of factors , issues discussed courts in cases above resurface again: presumption created

if manner in person works subject control or direction of person;
if person’s hours of work subject control or direction of person;
if, in case of person works organisation, person forms part of organisation;
if person has worked other person average of @ least forty hours per month on last 3 months;
if person economically dependent on person whom works or renders services;
if person provided tools of trade or work equipment other person; and
if person works or renders services 1 person.

the legislative provision has been taken merely restatement or summary of principles laid down courts passing of time.

although presumption useful in determining whether person employee or not, closely linked principles , approaches developed courts, labour court held, in catlin v ccma, section 200a not away principle true nature of relationship between parties must gathered contract between them. section 200a not starting point, therefore; court held necessary consider provisions of contract before applying presumptions.

essentials

the common-law concept of employment sets scene interpretation of labour relations act 1995.

the contract of employment foundation of relationship between employee , employer. links 2 parties in employment relationship, irrespective of form contract takes.

the existence of employment relationship starting point application of labour law rules. without employment relationship between parties, rules of labour law not apply.

the origin of south africa s modern contract of employment lie in roman law, distinction made between 2 types of contracts discussed above: locatio conductio operis , locatio conductio operarum.

in terms of common law, 1 not have have written contract; therefore, not having contract in written form not fatal flaw, contract can verbal. there are, however, number of statutes require specific contracts of employment in writing. section 29 of basic conditions of employment act, example, states employer must supply employee written particulars concerning specific things, hours worked , remuneration.

like contract, locatio conductio operarum commences when parties have agreed essential terms, unless both parties have agreed suspend operation particular period. if contract s operation suspended, employer obliged allow employee commence work on specified date. failure so, without cause, constitutes breach of contract @ common law , dismissal under labour relations act 1995. important, therefore, determine essentials of contract of employment are.

stripped essence, contract of employment today may defined agreement between 2 parties, in terms of 1 party (the employee) works (the employer) in exchange remuneration. although definition appears simple, contains number of important principles, aspects , implications. when taken account below, definition of employment contract may expanded follows:

the contract of employment voluntary agreement between 2 legal personae (the parties) in terms of 1 party (the employee) places or personal services or labour potential @ disposal of other party (the employer) indefinite or determined period in exchange form of fixed or ascertainable remuneration, may include money and/or payments in kind. entitles employer define employee’s duties , control manner in employee discharges them.

agreement

firstly, must noted employment contract based on agreement; parties must enter voluntarily. idea finds expression in section 13 of constitution, provides no 1 may subjected slavery, servitude or forced labour, , section 48 of basic conditions of employment act, states forced labour prohibited.

another implication of fact employment contract based on agreement is contract, , therefore must comply requirements of our law valid contract. if not comply these requirements, not regarded binding , enforceable.

consensus between parties means both must have serious intention create mutual rights , duties legally bound. must have each been aware of nature of duties, , other had intention.

at common law, parties not required observe formalities. there no requirement contract in writing, employment contracts required statute in writing, of merchant seamen , learners under skills development act. in addition, of apprentices , candidate attorneys must registered appropriate authorities. lastly, parties wish alter provisions of basic conditions of employment act, must done in writing.

work

secondly, 1 of pivotal concepts in initial definition of work. generally, work means place one’s labour potential @ disposal , under control of another. means that, when work, offer our services person, , agree other person able tell do, when it, how , it.

to place labour potential @ disposal of means offer ability perform tasks person, , offer, @ same time follow person’s instructions.

remuneration

remuneration takes form of payment of money, or provision of benefit. (according common law, payment may made in kind.)

payment may made monthly, weekly, daily or in irregular cash payments. common law not prescribe form payment must take.

the labour relations act 1995 contains statutory definition of remuneration in section 213: payment in money or in kind, or both in money , in kind, made or owing person in return person working other person, including state.

the contract may state remuneration normal going rate specific type of work, or state specific amount or merely minimum wage.

the common law not indicate minimum wages; these set collective-bargaining councils , industry specific.

reciprocity

the contract of employment reciprocal contract. means 1 promise made in exchange another, , 1 obligation incurred in exchange other. employee works in exchange remuneration; employer remunerates employee in exchange employee offering place labour potential @ disposal , under control of employer.

summary

to summarise, essential elements of employment contract follows:

it voluntary agreement.
there 2 legal personae.
the employee agrees perform specified or implied duties employer.
there indefinite or specified period.
the employer agrees pay fixed or ascertainable remuneration employee.
the employer gains (qualified) right command employee manner in carries out duties.

duties

an employment relationship commences when parties conclude contract of service. prior this, neither party has rights against other; merely prospective employee , prospective employer.

there are, however, 2 statutory exceptions principle employers have no obligations applicants employment:

employer

in addition 3 principle duties of employer, discussed below, employers further obliged accord employees rights in terms of applicable contracts of service, collective agreements , legislation, adhere statutory duties imposed in interests of employees.

receipt service

the employer’s obligation receive employee service corollary of employee’s duty enter , remain in service.

the duty receive employees service not mean employers must provide employees work keep them busy, although general rule subject exceptions: where, example, remuneration based on volume of work done, in case of piece-workers or salespersons working on commission, or failure allow employee work degrades status. duty provide work may arise employer has contracted train employee in particular profession or trade, in case of article clerks , apprentices.

the common law permits suspension of employee, suspected of form of grave misconduct, while matter being investigated, employee entitled remuneration during period of suspension.

employers may deny employees access workplace, or otherwise prevent them working, in course of collective bargaining. known lock out, , employer’s equivalent of employees’ strike. if lock out lawful—if, is, complies labour relations act 1995—the employer relieved of obligation pay locked-out employees wages.

since contract of employment personal, 1 employer cannot compel employee work if first employer has no work him, unless first employer s business transferred going concern.

payment

this duty fundamental employment contract courts assume, there has been no agreement on remuneration, either contract not contract of employment, or else parties impliedly intended payment of reasonable sum according custom , practice of industry , locality.

the duty pay, , commensurate right remuneration, arises not actual performance of work, tendering of service.

it has become widespread practice employers make remuneration packages higher-paid employees in tax-effective way, substituting various benefits (like housing , car allowances) cash component of salary.

the periodicity of payment depends on parties’ agreement or on custom.

an employer may not unilaterally deduct amount remuneration employee entitled.

if contract terminated summarily cause, employer must pay employee services rendered day of dismissal. same principle applies when employee deserts mid-term before end of fixed-term contract or without proper notice.

safe , healthy working conditions

under common law, employers obliged provide employees reasonably safe , healthy working conditions.

the scope of duty extends providing proper machinery , equipment, trained , competent supervisory staff, , safe system of working.

if employer fails meet obligation, affected employees not in breach of contract if refuse work until dangerous situation corrected.

under common law, employees had rely on delict if employer did not ensure working conditions safe , healthy, viewed imprecise, , legislature intervened. situation governed occupational health , safety act, implements strict liability on employer, , states how must paid employee if accidents occur.

remedies

if breach material, employee may claim damages. provided material breach, employee may cancel contract of employment.

the employee may claim specific performance. seldom granted in past considered option.

finally, employee may refuse work, withholding labour until contract performed.

employee
entering , remaining in service

the main obligation of employee under contract place personal services @ disposal of employer.

the tender of service prerequisite , corollary of employee’s right claim payment of wages: no work, no pay. reverse applies: no pay, no work, employees have not been paid may legitimately refuse work without breaching contracts.

if number of workers engage in concerted cessation of work purpose of obtaining concession employer, deemed on strike. under common law, striking workers need not paid. common law allowed employers summarily dismiss striking employees, has since been changed labour relations act 1995.

subject right take such paid leave has been agreed upon or conferred statute, once employees have entered service, remain obliged render service until contract of employment ends.

if employee fails render service (by desertion, absenteeism, abscondment, unpunctuality, etc.), employer entitled deduct employee’s wage amount proportional absence.

reasonable efficiency

employees deemed law guarantee impliedly capable of performing tasks agree perform, , carry them out reasonable efficiency.

where employer seeks assurances employees’ competence before taking them service, employees bound representations may make, whether professions of competence made employees themselves, or in testimonials of aware.

the standard of competence employers entitled expect of employees depends on capacities in employees engaged , status , seniority accorded them.

the test standard of competence of persons comparable employees in question, having regard training, experience , special claims employee might have made regarding competence.

where employee has warranted possesses particular degree of skill, must satisfy representation.

furthering employer’s business interests

employees obliged devote energies , skills furthering employer’s business interests. must devote normal working hours employer’s business; may not, without employer’s permission, simultaneously work employer during hours contractually obliged devote employer’s needs.

these duties arise because relationship between parties of fiduciary nature: employees may not place in positions own interests conflict of employers , may not, exercising powers of agency, acquire interests or benefits without knowledge of employers.

the interests of employees must bona fide: may not work employer if business interests in conflict of principle employer.

in absence of contrary provision in contract, there nothing preclude employees holding 2 compatible jobs, provided second not conducted during working hours obliged devote first job. contractual provisions limiting employees’ moonlighting activities are, however, permissible.

in addition, employees may not compete employer’s business own account.

respect , obedience

respect , obedience regarded implied duty of every employee. absence of former renders interpersonal relationship between employer , employee intolerable; denial of latter undermines employer’s right decide how employees work.

the courts require employees show reasonable degree of respect , courtesy employers, , obey employers’ reasonable , lawful instructions.

respect, being disposition, quality difficult define precision. not equated deference in manner compatible subordinate position in employee definition stands vis-à-vis employer.

mere failure on occasion greet employer or superiors not place employees in breach of obligation show respect. disrespect must gross if justify termination of employment relationship, or frequent suggest employee has repudiated employer s lawful authority, or has rendered continuation of employment relationship intolerable.

each case must considered on own merits establish whether these inferences may drawn.

unless insolence particularly gross, proper sanction written warning in first instance.

the employee’s duty of obedience applies work-related orders , during working hours , orders lawful , reasonable.

employees entitled disobey instructions subject them personal dangers not connected performance of duties.

an order unlawful if requires employee perform illegal act or falls outside scope of contractual relationship.

refraining misconduct generally

any misconduct renders continuation of employment relationship intolerable or unworkable, or undermines trust , confidence between employer , employee, regarded sufficient justify dismissal, provided serious enough offset importance courts otherwise attach work security of employees. examples of misconduct insubordination, theft, fraud.

with regard misconduct committed before formation of conduct (like commission of serious crime), general principle there no duty on prospective employees disclose prejudicial information past future employers unless asked so.

a duty may arise, however, non-disclosure material , amounts fraud. whether or not employee may dismissed non-disclosure depends on whether or not employment relationship can reasonably sustained after discovery of past misdeed.

remedies

the employer may dismiss employee summarily misconduct, incapacity or operational requirements. if damages incurred result of breach of 1 of these duties, employer may claim compensation.