More often than not employers enlist the services of a person they think to be acting as an independent contractor when in fact by law the person is not seen to be an independent contractor but in fact is classified by law to be an employee. This person will have all rights of an employee and also placing all such obligations of same on the employer.
The BCEA and LRA define an employee 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.
This definition can in some cases prove to be vague when determining the difference between an employee or independent contractor. Section 200A of the Labour Relations Act has stepped in here to shed more light on the above, this section reads as follows:
200A. Presumption as to who is employee
(1) Until the contrary is proved, a person, who works for or renders services to any other person, is presumed, regardless of the form of the contract, to be an employee, if any one or more of the following factors are present:
(a) the manner in which the person works is subject to the control or direction of another person;
(b) the person’s hours of work are subject to the control or direction of another person;
(c) in the case of a person who works for an organisation, the person forms part of that organisation;
(d) the person has worked for that other person for an average of at least 40 hours per month over the last three months;
(e) the person is economically dependent on the other person for whom he or she works or renders services;
(f) the person is provided with tools of trade or work equipment by the other person; or
(g) the person only works for or renders services to one person.
(note, the earnings threshold as determined by the minister from time to time may also have an influence on above mentioned provisions).
As soon as the person rendering services complies with one of the above mentioned provisions he will be deemed to be an employee and not an independent contractor. It is thus of utmost importance that if the intention is to enlist the services of an independent contractor and not be bound in an employment relationship, great care must be given to avoid that the person can be placed under one of the above mentioned presumptions.
For the purposes of the relationship with an independent contractor the person letting out the work is seen as the principal and the doer of the work is the agent, this contract is totally different it is not an employment contract but a contract relating to the performance of a specific piece of work. There is far less control of a principal over an agent than that of an employer over employees.
Article by: Carlene van der Lith
CEO Dispute Resolution Official – Kimberley