HR 101 - Who is an Employee - Part 9

HR 101 - WHO IS AN EMPLOYEE – PART 9

By Nikki Viljoen – Viljoen Consulting CC.

Please note that this pertains to South African Labour Relations & Best Practice requirements.

The code also has a look at ‘when’ a person becomes as employee.  This should be of particular interest to those among us who hire staff and then change our minds.

Let’s take this example – A person applies for a job (let’s call her Brenda).  Brenda gets the job and her new boss (let’s call him Alan), is really on the ball and the result is that Brenda receives her letter/contract of employment even before her starting date.  She resigns from her previous employer and is in the process of working her notice period in, when she gets a call from Alan to say – the job no longer exists for whatever reason, and he wants to cancel the employment contract.

Let me put it this way – this can and will put Alan in a problematic situation.

You see, it is not necessary for Brenda to have started working at the new job to be regarded as an employee, in terms of Labour Legislation.  Section 26 of the code states clearly that “the definition of an employee” includes a person who has concluded a contract of  employment  to commence work at a future date.

Brenda could take Alan to the CCMA and/or the bargaining council for ‘unfair dismissal’.

There is also a process to distinguish the difference between an employee and an independent contractor.

Let’s explore the reality of this situation as I am sure that most ‘employers’ would be particularly interested in this.

We know for sure that even though a contract or letter of employment may state that a person is an independent contractor, this is not necessary so and will not necessarily make it so.

Section 27 of the code says that the courts follows a procedure called the “dominant impression” test, when they make this type of decision.  These are:

1. All of the aspects of the contract and/or relationship between the employer and the person need to be evaluated and a decision then made on the dominant impression formed during the course of that evaluation.
2. As an added precaution it is also noted that all the different factors do and would not carry the same weight.  This is because there is no single criterion that will determine whether an employment relationship exists or not.
3. The true relationship between the employer and the person needs to be discovered, as the wording in the contract may not be a true reflection of this relationship. So the court would need to look at the reality of the relationship rather than just the contractual nature.

There are obviously many instances where the employer treats an individual as a contractor, when in fact they are an employee.  One of the most common ones is:

Conversions – the employer claims that a person who was ‘previously’ employed has now become a contractor.  If the person is still performing exactly the same or even similar work as they did when they were “employees”, chances are they are actually still employees.

So in closing, the employer needs to be aware of the differences between an employer and an independent contractor and of course make sure that they are within the scope of what the law requires.

It can be an extremely costly exercise, if an employer is taken to court or the CCMA, and it is discovered that they have not followed the law and are therefore in contravention of the Code.

Make sure that you know what it is that you want and then make sure that you follow the letter of the law – it is much easier (and cheaper in the long run) to start off in the correct manner than to try and sort it out afterwards.

Nikki is an Internal Auditor and Business Administration Specialist who can be contacted on 083 702 8849 or nikki@viljoenconsulting.co.za