by K-Ci Henry | May 3, 2021 | Legal
According to section 213 of the LRA an employee is:
“(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 out or conducting the business of an employer…”
This definition strongly implies that the employer’s legal obligations begin only on the day that the employee physically begins work. However, this is not necessarily so. The courts have found that the employee is protected by labour law from the moment the employment contract is concluded even if the employee has not yet started work; and even if the contract has only been orally agreed.
For example, in the case of Wyeth SA (Pty) Ltd vs Manqele (People Dynamics, September 2003 page 39). Manqele was offered a position by the employer as a sales rep. The parties concluded a written contract of employment in terms of which he was to commence work on 1 April. Prior to Manqele beginning work, he was advised that the employer was no longer prepared to employ him. In terms of the contract of employment, Manqele had been entitled to a company vehicle.
The employer believed that Manqele had made a misrepresentation as to the status of the car he had chosen, and on this basis took the view that there was no contract, as the parties had not reached agreement as to the condition of the motor vehicle stipulated in the letter of appointment.
Manqele took the matter to the CCMA where the arbitrator ruled that Manqele had become an employee the moment he accepted Wyeth’s offer of employment. Wyeth took the arbitrator on review at the Labour Court on the
grounds that the arbitrator had arrived at an “unjustifiable conclusion in ruling on the definition of an employee”.
That is, Wyeth argued in the Labour Court that Manqele did not become an employee merely because of the employment contract. This argument is supported by an earlier Labour Court finding in the case of Whitehead vs
Woolworths (Pty) Ltd (1999 20 ILJ 2133). In that case the Court found, according to the report, that a person who is party to a contract of employment but who has not yet commenced employment is not an employee for the purposes of the LRA.
However, despite the Woolworths case finding the Court, in the Manqele case found that, as a party to a valid and binding contract of employment, Manqele was an employee for the purposes of the LRA.
The employer recently took the matter further to the Labour Appeal Court (In Wyeth SA (Pty) Ltd vs Manqele & others 2005, 6 BLLR 523) but lost yet again. The Court upheld the earlier decisions by the CCMA and Labour Court that Manqele had achieved legal employee status the moment his employment
contract was signed. This decision poses a number of concerns for employers.
– Firstly, the fact that two different benches of Labour Appeal Court judges (Woolworths on the one hand and Wyeth on the other) made two such diametrically opposed decisions on a matter as fundamental as this one
creates major uncertainty as regards the law.
– Secondly, employers are now clueless as to whether they are or are not entitled to cancel employment contracts prior to commencement of work.
– Thirdly, where the parties have agreed in principle that the employee will get the job it is now not clear whether a disagreement on the terms of the employment does or does not delay the legal validity of the contract of
employment.
In the light of these dangers employers should:
– Avoid entering into employment agreements until all the terms and conditions
have been dealt with thoroughly
– Ensure that, before offering anybody a job, there are no obstacles to allowing
the candidate to take up the position
– Make it clear that the discussion of the terms and conditions of a contract in
no way constitutes an offer of employment.
– Never employ, contract with or cancel the employment contract of any person
without involving a labour law expert experienced in dealing with these tricky issues.
To observe our experts debating controversial labour law topics please go to
www.labourlawadvice.co.za and click on the Labour Law Debate menu item.
by K-Ci Henry | Apr 26, 2021 | Employers
Under the yoke of the Covid lockdown employers are becoming more and more desperate in their attempts to run orderly, productive and profitable businesses. In addition to the lockdown the special obstacles to the achievement of this goal are intense and growing international competition, South Africa’s culture of crime and disciplinary legislation that severely restricts the rights of employers.
In their attempt to deal with this restrictive labour legislation employers place new employees on probation so as to detect and get rid of ‘bad apples’ without having to travel the tortuous disciplinary procedure route mapped out by the law. However, employers have discovered to their alarm that, while probationary contracts are legal, they are not a license to fire at will.
In October vs Teleperformance SA (Pty) Ltd 2021] 4 BALR 426 (CCMA) a call centre agent was dismissed for absenting himself from work without permission for four days during May 2020. He had stayed home because he
felt afraid after a colleague had been infected by Covid.
The Commissioner noted that a regulation issued by the Minister of Employment and Labour in April 2020 provided that employees may refuse to work if they reasonably feel that doing so would pose an imminent threat of exposure to Covid-19 and that they may not be dismissed or disciplined for this. The applicant was awarded compensation of four months’ salary.
Another problem is that probation clauses are not useful as quick fixes for getting rid of undesirable employees. As a result employers use fixed-term contracts as a way of testing out whether the employee is going to fit into the
organization. However, in the case of Abrahams vs Rapitrade (Pty) Ltd (2007, 6 BALR 501) the employee was hired on a probationary contract. However, when the employee performed badly the employer claimed that the employee was on a fixed-term contract and terminated his employment at the alleged expiry date. The arbitrator found that the dismissal was unfair because the employee was not on a fixed-term contract and dismissals for poor performance must be preceded by counselling and/or training. Other employers hire workers as independent or external contractors to disguise the fact that the workers are employees. If the contractor works and
behaves well the employer might then make him/her an employee. However, the pawpaw hits the fan when the worker fails to meet the standards and is terminated on short notice. Labour law procedures are not used because the worker is seen as an independent contractor.
However, workers terminated in this way have a good chance of succeeding at the CCMA because section 200A of the Labour Relations Act (LRA) effectively distinguishes between genuine independent contractors and
employees. That is, this section provides that, unless the employer can prove otherwise, the worker is presumed to be an employee and not an independent contractor if any one of the following factors is present:
o The manner in which the person works is subject to the control or
direction of another person;
o The person’s hours of work are subject to the control or direction of
another person;
o The person forms part of the organisation or business;
o The person has worked for the organisation/business or other person
for an average of at least 40 hours per month over the last three
months;
o The person is economically dependent on the
organisation/business/person;
o The person is provided with work tools or equipment by the
organisation/business;
o The person only works for one organisation/business/person.
I must stress that these criteria apply regardless of the form of the contract. This means that, even if the employee has contractually agreed that he/she is an independent contractor the CCMA may well find that he is not one!
Therefore, at CCMA there is a heavy onus on the employer to prove that, despite the existence of any one of these seven factors, the worker is an independent contractor. However, due to the fact that the majority of such
workers are employees disguised as independent contractors the employer loses the case. And, because the employer fails to use disciplinary procedures they are forced to reinstate or compensate the employees.
The loopholes for avoiding the law of discipline are all but closed and the impending new legislation on labour brokering and contracting is likely to finish off the job. This means that employers will have to abandon the quest
for loopholes and become more adept at implementing the laws of discipline and dismissal.
To register for our 7 May webinar on Lockdown Labour Law please contact
Ronni on [email protected] or 0845217492.
