Contracts of Employment


Employers must clearly understand exactly how the Act defines "an employee." Many employers sit back smiling, falsely believing that all the people who work for them are not employees – so the employer has successfully circumvented the Act.  "They are not employees – they are all independent contractors !!

 

It is time to smell the coffee!!

 

The definition of an employee in the Act is vastly different from the conception or perception of employers as to what an employee is. The first thing to take note of is that the Act makes no mention anywhere of "contractor" employees, or " independent contractor" employees, or " temporary employees", or " part-time employees", or "fixed term contract employees", or "part-time employees", or " flexitime employees" or "commission-only contractor" employees ,or any thing else.

 

Those classifications of employees exist only in the mind of and for the purpose of the employer – the Act is vastly different. The act refers, very simply, to "employees." In some sections, the words "independent contractor" is mentioned, as well as "senior managerial employee", in the context of those sections. Certain sections of the act state that "this section does not apply to senior managerial employees."

 

Thus, we need to start by looking at how the act defines "senior managerial employee", and how it defines "employee."

In section 1, "employee", is defined as :

  1. 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
  2. any other person, who in any manner, assists in carrying on or conducting the business of an employer.

 

Section 83 A of the BCEA goes further in the definition of "employee." It states that:

 A person who works for, or renders services to, another person, is presumed, until the contrary is proved, to be an employee, regardless of the form of the contract, if any one or more of the following factors is present:

 

i) The manner in which the person works is subject to the control or direction of another person;

 ii)the person's hours of work are subject to the control or direction of another person;

 iii)in the case of a person who works for an organisation, the person is a part of that organisation;

 iv)the person has worked for that other person for an average of at least 40 hours per month over the last three months;   

v)the person is economically dependent on the other person for whom that person works or renders services;  

vi) the person is provided with tools of trade or work equipment by the other person;

 vii) or  the person only works for or renders services to one person.

 

This is what is termed "a rebuttable presumption."  In other words, it is a presumption that is made in law, (the law presumes that person to be an employee), until such time as it can be proved that the person is not an employee. Lastly, a senior managerial employee is defined in section one as:

 

" senior managerial employee" means  an employee who has the authority to hire, discipline and dismiss employees, and to represent the employer internally and externally.  "

 

This means that, in order to qualify as a senior managerial employee for the purposes of the Act, the employee must have the authority to hire AND discipline AND dismiss employees, AND to represent the employer both internally and externally (signing of contracts, tenders, attending shareholders meetings, etc).   If any of these elements is missing, then the employee is not a senior managerial employee for the purposes of the Act.  Therefore it is possible that an employee can be classed as a "senior manager" for the purposes of the employer, but that same employee will not necessarily be a "senior managerial employee" for the purposes of the Act.

 

More next week - contact

Case Law Summaries and Articles

 

Can employees be dismissed for refusing to accept new terms and conditions of employment?

Can an employer dismiss employees because they refuse to agree to a change to their terms and conditions of employment? An initial answer may be, “yes”.

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Escape route: “Resignation with immediate effect”

The latest case in the ‘disciplining employees who have resigned with immediate effect’ saga has brought about more uncertainty as to whether an employee who resigns with immediate effect shortly before a disciplinary hearing can avoid disciplinary action and subsequent dismissal.

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Freedom of expression or incitement to commit an offence? A constitutional challenge

On 4 July 2019, the North Gauteng High Court handed down judgment in the case of The EFF and other v Minister of Justice and Constitutional Development and other (87638/2017 and 45666/2017) in which the EFF and Julius Malema (the applicants) sought to have s18(2)(b) of the Riotous Assemblies Act, No 17 of 1956 (Riotous Act) declared unconstitutional.

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Consolidated, comprehensive or general final written warnings

Regarding dismissal, according to the Code of Good Practice, “the courts have endorsed the concept of corrective or progressive discipline. This approach regards the purpose of discipline as a means for employees to know and understand what standards are required of them.

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