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Who is an Employee? The question addressed. (Part 4)


The Code addresses the question of: when does a person becomes an employee?

 

Disputes arise around this question when a person applies for a job, the application is successful, they sign a contract or letter of appointment, but before actually commencing work the new employer phones them to say that the post no longer exists, or the employment decision has been suspended, or some other reason, and they cancel the contract. This practice, which is fairly common, will only land the employer in hot water.

 

Section 26 of the Code states that "the definition of an' employee' includes a person who has concluded a contract of employment to commence work at a future date.  Accordingly it is not a requirement that a person has actually commenced work in order to be classified as an employee in terms of labour legislation." This means that, if a person has concluded a contract but has not actually started work yet, and the employer cancels or withdraws the contract,  then that person will be entitled to refer a dispute of unfair dismissal to the CCMA or bargaining council.

 

Distinguishing between an employee and an independent contractor

 

This process, in a nutshell, is really what employers want to know and should know - how do you distinguish?  Well, one thing is certain - the fact that the contract states that it is a contract of independent contractor, or states that the person is not an employee but an independent contractor, is nowhere near sufficient.  Section 27 of the code states that in making the decision, the court's follow the procedure commonly known as the "dominant impression" test.

 

This test requires that all aspects of the contract and the relationship must be evaluated, and then a decision is made based on the dominant impression formed in that evaluation. The fact that there is no single decisive criterion that determines whether an employment relationship exists or not,  does not mean that all the sectors should be given the same weight. In determining whether or not a person is an employee, the courts attempt to discover the true relationship between the parties.

 

The point here is that the wording in the contract, or the contractual relationship, may not always reflect the true relationship between the parties. Therefore, the court must have regard to the realities of the relationship, rather than only looking at the contractual nature of the relationship. It is unfortunate that disguised employment is alive and well and thriving in the South African labour market.

 

The Employment Relationship Recommendation, 2006, of the International Labour Organisation, defines disguised employment to be a circumstance where the employer treats an individual as other than an employee, in a manner that hides his true legal status as an employee." (section 30 of the code.)

 

In some cases, employers have claimed that a person who was formerly an employee, has been ' converted' into an independent contractor. If that person has previously performed the same or similar work as an employee, then this is a very strong indication that he or she remains an employee - despite the ' conversion.'

 

Similarly, the fact that other employees employed by the same employer, or by other employers in the same sector, to perform the same or similar work under similar conditions are classified as employees, may also be a factor strongly indicating that the ' converted' person is still an employee.

 

Another interesting observation in the code is that even where workers have agreed to a contract classifying them as independent contractors, it is consistent with the purpose of the LRA to classify them as employees. The point here is that, even if an employee has agreed to and signed a contract containing certain conditions, it does not necessarily mean that the contract is lawful. If it is not lawful, it cannot be enforced.

 

Further, the code states that the fact that a person provides services through the vehicle of a legal entity such as a company or a closed corporation, does not necessarily exclude that relationship as being an employment relationship covered by labour legislation.

 

It is necessary to look beyond the legal structuring to ascertain the reality of the employment relationship, and to determine whether the purpose of the arrangement was to avoid labour legislation or other regulatory obligations. The Appellate Division has listed six factors to distinguish a contract of employment (employee) from a contract for services (independent contractor). These factors are frequently cited in judgements, but they are not a definitive listing of the differences between the two types of contract.

 

(Employee in Bold, independent contractor Italic)

 

Object of the contract is to render personal services.
Object of contract is to perform specified work or produce a specified result.
 
Employee must perform services personally.
Independent contractor may usually perform through others
 
Employer may choose when to make use of services of employee
Independent contractor must perform work (or produce result) within period fixed by contract   
 
Employee obliged to perform lawful commands and instructions of employer
Independent contractor is subservient to the contract, not under supervision of control of employer    

Contract terminates on death of employee.
Contract does not necessarily terminate on death of employee.     
 
Contract also terminates on expiry of period of service in contract.      
Contract terminates on completion of work or production of specified result    

We will discuss these factors, and more on the dominant impression test next week.

 

For further information, contact [email protected]

 

What does POPI compliance mean?

By Jan du Toit

 

Latest developments – Registration of Information Officers:

 

On 17 May 2021 the Information Regulator’s long awaited online portal went live for the registration of Information and Deputy Information Officers.

 

The Information Officer of a Responsible Party is the person at the head of your company (CEO or MD) or any person acting in such capacity, or specifically appointed by the MD or CEO to be the Information Officer. Registration must be completed before the end for June 2021.

 

The address for the portal is  https://justice.gov.za/inforeg/portal.html   

 

The following information is required to successfully register: 

  • Company name.

  • Company registration number.

  • Company type.

  • Company physical and postal addresses.

  • Company telephone and fax numbers.

  • Information Officer gender, nationality, full name and surname, ID or passport number.

  • Deputy Information Officers same details as per above.

 

POPIA Compliance – what must be done?

With a little more than a month left before POPI becomes fully effective, many employers may find themselves out of time to become fully compliant to amongst other considerations, the 8 processing conditions prescribed in the Protection of Personal Information Act.

 

To be considered compliant the following must be considered and applied in the business of a Responsible Party before 1 July 2021. 

  1. POPI training / awareness sessions for the CEO / MD, managers and others tasked with the company’s POPI compliance project. Have a look on our website for the next POPIA training dates.

  2. Compliance audit to be conducted company-wide per department / division to determine the current processing practices within the organization and to establish what needs to be done to be compliant.

  3. Correction of contraventions as identified, and to introduce reasonable technical and organizational measures to prevent the loss or unauthorized access of Personal Information.

  4. Introduction of Data Subject rights and consent in the business through policies and consent clauses / paragraphs / contracts.

  5. The introduction of a PAIA manual (Promotion of Access to Information Act) that incorporates data subject rights and participation in terms of POPIA. This manual must be published on one of the company’s websites. It is also important to note that the current exemption granted by the Minister of Justice for some business to not have such a manual in place currently, expires at the end of June 2021.

  6. General staff POPI policy and legislation awareness training.

  7. Registration of the company’s Information Officer (the CEO, MD or any person acting in such position).

  8. Follow-up assessment on compliance measures and adherence thereto.

 

It is important to note that no institution, not even the Information Regulator, can “accredit” any Responsible Party in South Africa to be compliant in terms of legislation. Compliance (or otherwise) will only be determined should an investigation be launched by the Information Regulator following a complaint. Should such an investigation confirm a lack of compliance, consequences such an administrative fine not exceeding R10m may follow (which one may luckily pay off in instalments). Further to this those whose rights are infringed upon by a Responsible Party not adhering to the requirements of POPIA, may also institute civil proceedings. Such  proceedings may result in compensation being awarded for loss, as well as aggravated damages determined at the discretion of the court.

 

In terms of section 19 of the Act, the Responsible Party (business owner / employer) is required to introduce reasonable organizational and technical measures to secure the integrity and confidentiality of Personal Information. The organizational measures referred  to above includes inter alia both internal and external policies to introduce the principle of protection of personal information in the workplace, as well as the rights of data subjects.

 

To allow you more time to focus on your business, the author of this article compiled a bundle of detailed policies for your business, ready to use. This includes all relevant forms to be used and a template document with draft consent clauses / paragraphs / rules  to be incorporated into service and employment contracts, job applications, credit and other applications forms, WhatsApp and Facebook groups / pages, and Independent Contractor agreements.

 

Also included is an Operator Agreement as required in terms of section 21 of the Act and a consent letter for existing clients / service providers, to agree to the continued processing of their Personal Information beyond June 2021.

 

The policies bundle includes: 

  • Privacy notice template to be published on your website.

  • Personal information protection policy.

  • Personal information retention policy.

  • Data breach policy.

  • Data breach register - form.

  • Data breach report - form.

  • Data security policy.

  • Data subject access request policy and procedures.

  • Data subject access request forms.

  • Processing agreement with third parties as Operators - contract.

  • Data subject participation - draft consent paragraphs / clauses to be incorporated into service and employment contracts, job applications, credit and other applications forms, WhatsApp and Facebook groups / pages and Independent Contractor agreements

  • Guidelines on the appointment of deputy information officers, inclusive of appointment letter.

 

For only R3750 you can now order you set of POPI policies, ready to use. Contact Jan du Toit for further assistance at [email protected]

 

 

 

 

 

 

 

 

Courses and Workshops

 

                   

The OHS Act and the Responsibilities of Management

30 September 2021 (08:30 – 16:00)

Interactive Online Course

Employment Equity Committee Training

30 September 2021 (09:00 - 16:00) (Fully Booked)

Interactive Online Course

27 October 2021 (09:00 - 16:00)

Interactive Online Course

Managing Day to Day Issues/ Problem Employees Full day workshop

01 October 2021 (09:00 - 16:00) (Fully Booked)

Interactive Online Course

28 October 2021 (09:00 - 16:00)

Interactive Online Course

Compensation for Occupational Injuries and Diseases Course

01 October 2021 (08:30 - 16:00) (Fully Booked)

Interactive Online Course

15 October 2021 (08:30 - 16:00)

Interactive Online Course

Basic Labour Relations

07 October 2021 (09:00 - 16:00)

Interactive Online Course

AARTO and the Impact on Your Business

08 October 2021 (09:00 - 12:00)

Interactive Online Course

POPIA: Protection of Personal Information Act

15 October 2021 (09:00 - 12:00)

Interactive Online Course

Workshop Chairing Disciplinary Hearings

21 & 22 October 2021 (09:00 - 16:00)

Interactive Online Course

Strategic Human Resources Management (HRM) and - Business Partnering

27, 28 & 29 October 2021 (08:30 - 16:00)

Interactive Online Course

Health and Safety Representative and Committee Training Course

28 October 2021 (08:30 - 16:00)

Interactive Online Course

Managing Poor Performance/ Incapacity

29 October 2021 (09:00 - 12:00)

Interactive Online Course

Management and Leadership Skills

10, 11 & 12 November 2021 (08:30 - 16:00)

Interactive Online Course

 

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