In South Africa, there are many forms of employment, both formal and informal. However, certain rights and protections only accrue to those who are deemed to be employees. Merely working for an individual does not amount to an employment relationship in terms of South African Law. This article aims to identify the factors considered when establishing whether or not an employment relationship exists.
South African Law considers certain factors in establishing the existence of an employment relationship.
The first is the wording of the contract entered into between the parties. The wording of the contract gives insight into the thought process, hence the intention of the parties who are contracting. This would allow an outsider to determine the nature of the relationship between the parties. Should the practical relationship of the parties not follow that of the contract, the practical relationship would be followed to identify if the relationship is that of an employment nature. The employment contract would therefore only serve as a starting point.
The most important aspect to consider is the legislative definition of an employee. Here we look at legislation such as the Basic Conditions of Employment Act, as well as, the Labour Relations Act. These Acts define an employee as any person who works for another or the State and who is entitled to receive remuneration for that work.[1] The definition goes further and includes any person who assists in carrying on or conducting the business of an employer.[2] However, this definition excludes those individuals who perform these tasks as independent contractors.[3] Here we can see that the definition of an employee is quite a broad one, as such in most circumstances it is easy for individuals to fall within this category.
South African legislation is not the only place we look to when attempting to identify an employment relationship. This may be taken a step further by looking at the rulings made by the judiciary. Here a judicial test has been put into place, which allows for two outright tests and another which is a combination of the two.
The first distinct test is that of the control test. This test holds that the more control the person has, the less likely that person is an employee. The alternate test is that of the organization test, here the more a person is integrated into the organization, the higher the chances of the person being an employee. There is also a test which is known as the dominant impression test, this is a test which is a combination of both the control and the organization test.
A factor that should also be considered when determining whether a relationship is that of an employment nature is that of statutory presumptions. Here section 83 of the Basic Conditions of Employment Act, as well as section 200A of the Labour Relations Act, deals with the presumption of an employment relationship. These Acts set out a list of requirements which if one falls within, is presumed to be an employee unless proven otherwise.
The final aspect which should be considered is the definition of an employee in terms of the Code of Good Practice. The Code of Good Practice is not specific legislation, but it exists to support the legislation. As such one may be guided by it, but one cannot use it as your only source.
It is clear that although there is a broad definition of an employment relationship, it is not a straightforward process to make this determination.
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Saeedah Salie
saeedah@bbplaw.attorney
Associate
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