Unit 3.3: Employees and Independent contractors

Question 1

Define an employee according to the labour relations act

Answer 1

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 other person who in any manner assists in carrying on or conducting the
business of an employer …

Question 2

Explain the dominant test

Answer 2

• The weighing-up of number of factors against one another
• The factors taken into account are not exhaustive and the courts have held that there is no single factor that is decisive in determining the existence of a contract of employment

Question 2

State the four factors from the Mckenzie court case

Answer 2

Factors to be considered when making a decision as to whether someone is an employee:
■ The object of the contract should be that the individual renders personal services
■ The employer chooses when and where to use these services
■ The individual must obey the commands of the person requiring his service
■ There is usually no date for termination of the contract, except in the case of a fixed
term contract.

Question 3

State the difference of independent contractor from a employee

Answer 3

• Works business owner on a part-time basis, and may also be working for other companies or individuals at the same time
• Is given a goal and a deadline but no specific schedule is set
• Is responsible only for the attainment of goal, without specific requirements on how the goal must be achieved
• Provides own tools and materials, and may work from home, own location, etc.
• May hire assistants or sub-contractors to accomplish the goal
• Is paid on a per-project commission basis or invoices you for time worked
• Holds their own business licenses, permits, etc

Question 4

Discuss the SABC v McKenzie court case

Answer 4

• The object of the contract of service is the rendering of personal services by the employee to the employer
• Independent contractor is not obliged to perform work or produce results himself, unless otherwise agreed
• Services to be rendered in terms of a contract of service are at the disposal of the employer who may on his own discretion subject of course to question of repudiation decide whether or not he wants to have them rendered. The independent contractor is bound to perform a certain specified work/produce a certain specified results within a time or reasonable time
• The employee is subordinate to the will of the employer and obeys lawful commands of the employer who has the right to supervise and control; where as an independent contractor is notionally on a footing of equality with the employer and the independent contractor is his own master
• A contract of service is terminated by death of the employee whereas the death of the parties to a contract of work does not necessarily terminate it
• A contract of service terminates on expiration of the period of service entered into while a contract of work terminates on completion of the specified work on production of the specified results

Question 5

State the types of employment contracts

Answer 5

• Indefinite/Permanent
• Fixed term contracts
• Part-time contracts
• Labour brokers

Question 6

Explain indefinite/permanent contracts

Answer 6

Most contracts of employment are indefinite in that no date for termination of the contract
is given.

Question 7

When cannot employer by engaging in
an indefinite or permanent contract with the employee, implicitly agrees that the employee
will not be dismissed unless?

Answer 7

■ He is in breach of contract or
■ He becomes too ill or incapacitated to perform his duties
■ The operational requirements of the employer require a reduction of the workforce.

Question 8

Explain fixed term contracts

Answer 8

There are instances where the services of an employee may be required only for a specific
period or for a particular project. In these instances the employer will conclude a fixed-term
contract with the employee or employees in question.

Question 9

What is an fixed term contract according to section 198B(1)?

Answer 9

Section 198B(1) of the Act now defines a fixed-term contract as one which will end on:
■ The occurrence of a specified event
■ The completion of a specific task or project
■ A fixed date (but not the employee’s normal retirement date).