Study Unit 3

• Explain the statutory definition of “employee”, including the exclusions.

• Discuss the traditional common-law tests to determine if a person is an
employee.
• Explain what the presumption as to who is an employee entails.
• Explain the shift brought about in Sita v CCMA in identifying an employee.
• Explain the so-called non-standard forms of employment and what protection
employees employed through a TES, fixed-term employees and part-time
employees can rely on.
• Explain whether sex workers, and foreign nationals without work permits are
entitled to labour law protection in South Africa.
• Discuss the LC decision of Uber South Africa Technology Services (Pty) Ltd v
National Union of Public Service and Allied Workers and explain whether uber
drivers are considered to be employees. Do you agree with this position?

Labour statues apply to persons who are defined as employees.

Example:

o Section 185 of the LRA states that every employee has the right not to
be unfairly dismissed and subjected to unfair labour practices.
o If A wants to institute an unfair dismissal claim against B, but B is of the
view that A is not its employee and therefore not entitled to the unfair
dismissal recourse provided for in the LRA, the first question is whether
or not A is/was an employee of B.

How to determine whether someone is an employee:

 Legal framework
 Common-law tests

How our legal framework determines who is an employee:

i. Definition of employee
ii. Factors used in the presumption.
iii. Code of Good Practice

Definition of an employee:

Provided for in the LRA, BCEA and the EEA “employee” means:

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

Smit v Workmens Compensation: distinguish employees and independent

contractors

Contract of employment Independent contractor

Object of the contract is to render Object of contract is the

personal services. performance of specified work or
achievement of a specified result.

The employee must perform The contractor may perform through

services personally. others.

The employer may choose when to Contractor must perform work (or
make use of the services of the produce result) within period fixed
employee. by contract.

The employee is obliged to carry out The contractor is subservient to the

lawful commands and instructions of contract but does not render service
the employer. under the supervision or control of
the employer.

The contract terminates on the The contract does not necessarily

death of the employee. terminate upon the death of the
 contractor.

The contract terminates on the The contract terminates on

expiry of a period of service in the completion of work or on production
contract of a specified result

The Presumption of who is an employee

Provided for in sections 200A of the LRA and 83A of the BCEA

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:

o Whether the person’s work is subject to the control or direction of

another
o Whether the person’s hours of work are subject to the control or
direction of another
o Whether the person forms part of the organisation
o Whether the person worked for an average of 40 hours per month over
last 3 months
o Whether the person is economically dependent on the person for who
he/she works
o Whether the person is provided with tools of the trade or work
equipment
o Whether the person only works for that one person

- If a decision-maker finds that any one of these factors are present, the
person will be deemed to be an employee in terms of the presumption.
- However, this does not mean that the person is an employee. It only
shifts the onus to the alleged employer to proof the person is not an
employee.
- The presumption only applies to employees earning below the threshold
amount set by the Minister of Labour = R 241 110.59

Code of Good Practice: Who is an employee

Annexure to the LRA

Common law tests

Tests were developed by courts to distinguish btw employees and

independent contractors

Common-law tests:

 Supervision-and-control test
 Organisation or integration test
 Economic-dependency test

Dominant impression test (most important test): Court considers all

aspects of the relationship and then evaluates whether the dominant
impression formed is that an employment relationship exists.

Role of the contract of employment

- Common law contract of employment initially relied on by the courts

- Emphasis in recent years shifted from the contract of employment to the
existance of an employment relationship see SITA v CCMA
- In line with the ILO Employment Relations Recommendation 198 (must
define the employment relationship rather than the contract of
employment)
- Why change??? To counter disguised employment/elimination of labour
law protection.

SITA v CCMA

o Shift from contract of employment to employment relationship

o Crt did not concern itself with existence of valid contract of employment,
rather whether a employment relationship existed
o Primary criteria for employment relationship:
i. employer’s right to supervision and control
ii. whether employee forms integral part of organisation
iii. whether employee was economically dependent
Non-standard forms of work:

Three categories:

1. Individuals employed through a temporary employment service (TES /

labour brokers)
2. Employees employed on a fixed term contract.
3. Part-time employees

1. TES Employees
Consists of 3 parties

o Party 1 = TES recruits employee on behalf of client

o Party 2 = Employee, who renders services to client
o Party 3 = Client, who renumerates TES for procuring employee

s 198A: No pprotection for persons earning in excess of threshold amount,

and if it is not genuine TES contract.

for a service to qualify as a temporary service, the employee recruited by the

TES must.

 Render services for the client for no longer than 3 months.

 Be a substitute for an employee who is temporarily absent; or
 Perform in a category of work for any period, as long as such work is
determined to be a temporary service by a collective agreement, a
sectoral determination or by a notice published by the Minister.

If the work performed by the employee does not fall within the definition of a
temporary service, the employee has certain protections:

 He is deemed to be an employee of the client.

 He must be treated the same as other employees unless there is a
justifiable reason to treat the person differently.
What happens to the relationship between the TES and the employee in
cases where the employee is now deemed to be the employee of the client.

Assign Services (Pty) Ltd v CCMA:

HC DECISION

 Considered whether the TES and client are dual employers or whether
the client becomes the sole employer.
 Held that the deeming provision does not have the effect that the
client of the TES becomes the sole employer.
 The common-law contract of employment between the TES and the
agency worker remains in place and nothing in the provision
invalidates the contract.
 However, the client also becomes the employer in a new statutory
relationship after the expiry of the three-month but only for the
purposes of the LRA, which regulates aspects such as unfair dismissal
and unfair labour practices.

LABOUR APPEAL COURT DECISION

o The protection established by s 198A seeks to ensure that employees

of a TES are treated no differently to those of the client, and to ensure
that the dee3med employees are fully integrated into the enterprise as
employees of the client.
o The TES remains the employer of the placed employee until the
employee is deemed to be the employee of the client, on an indefinite
basis.
o This conclusion is consistent with the intention to restrict the role of
TESs to genuine temporary employment.

CC DECISION

- Confirmed appeal court decision.

- Recorded that the issue it was required to determine related to employees
contracted by a TES and placed with a client for more than three months.
- In the triangular relationship created by the placement of a person’s
services at the disposal of another, the functions of the TES were
ordinarily limited to the obligation to pay remuneration and other human-
resource related functions.
- In reality, it is the client that engages in day-to-day management, the
allocation of work and performance assessment.
- The placed employee does not contribute to the TES’s business except as
a commodity.
- Court held that s 198A (3) effects a change in the statutory attribution of
responsibility as employer, within the triangular relationship, and that the
plain language of the section supports the ‘sole employer’ interpretation.
- In short, once the placed employee is deemed to be the employee of the
client, the client is the employer of that employee for all purposes and
there is no residual employment relationship with the TES.

Fixed Term Contract

Section 198B (1) of LRA definition of a fixed-term contract:

Such a contract must be entered into for the person to provide services:

- For specified event

- Until a specified project is completed; or
- For a specific period of time

When is protection excluded:

- Employee earns above threshold.

- Employer employs fewer than 10 workers.
- Employer employs 10-50 workers but has been in operation for less
than 2 years.

Section 198B (3): Fixed-term contract should not be for a period longer
than 3 months.

Exceptions:

 If the nature of the work is of a limited or definite duration

 If the employer has a justifiable reason to employ for longer than 3
months

Section 198B (4): What constitutes a justifiable reason:

- Replacing another employee

- Temporary increase in work (12 months)
- Student or graduate receiving training.
- Specific project
- Non-citizen on work permit
- Seasonal work
- Position funded by external source.
 - Reached retirement age

An offer to employ on a fixed term contract or renew a fixed term contract

must be in writing and must state the reasons why a fixed term contract is
being used.

- Rules governing fixed-

term contracts:
- Must be a genuine


fixed-term contract
(must comply with s
198B (1)
- of LRA definition)
- Contract should not


be for longer than 3

months, unless
exceptions
- are applicable (s 198B
(3) of LRA)
-
- If the contract is not a
fixed-term contract:
- Fixed-term employee


is deemed to be an
employee of the
employer for
- an indefinite duration.
- Treated not less


favourably than a
permanent employee
unless there
- is a justifiable reason
for different treatment.
 -  E q u a l
a c c e s s t o
o p p o r t u n i
t i e s
Rules governing fixed-term contracts:

 Must be a genuine fixed-term contract (must comply with s 198B (1) of

LRA definition)
 Contract should not be for longer than 3 months, unless exceptions are
applicable (s 198B (3) of LRA)

If the contract is not a fixed-term contract:

- Fixed-term employee is deemed to be an employee of the employer for

an indefinite duration.
- Treated not less favourably than a permanent employee unless there is
a justifiable reason for different treatment.
- Equal access to opportunities
- Longer than 24 months: severance pay of one week per year.
- Offer to employ or renew fixed-term contract in writing and state
reasons.
PART-TIME EMPLOYEES

Employees who work fewer hours or fewer days than a full-time employee

- Someone who works mornings only.

- Someone who works 2 days a week.

Protection afforded:

 Must be treated on the whole not less favorably than a comparable full-
time employee doing the same work.
 Must be provided with equal opportunity to training and skills
development opportunities.
 Must be given the same opportunities to apply for vacancies.

When protection is excluded:

 Employee earns above threshold.

 Employer employs fewer than 10 employees.
  Employer with fewer than 50 workers but has been in operation for less
than 2 years.
 Employees who work fewer than 24 mths for employer

UNAUTHORISED AND ILLEGAL WORK

Discovery Health v CCMA:

Are employees without valid work permits protected by labour legislation?

 Concerned people working without a valid work permit, i.e., working

illegally.
 Court held that it was not the intention of the Immigration Act to render
the employee’s contract of employment concluded without a permit null
and void.
o To render such contracts invalid could only encourage unscrupulous
employers to exploit unprotected workers and persons.
o Employing workers without permits is in any event a criminal offence.
 Court held that even if the contract was invalid, the definition of
‘employee’ does not necessarily presuppose a valid contract of
employment.
 o Any person who works for another person and receives remuneration
falls in the def of employee ito s 213 of the LRA and within the
protection of s 23 of Const.

“Kylie” v CCMA Are sex workers protected by labour legislation?

 The definition of ‘employee’ extends to persons engaged in unlawful

activities.
 Kylie worked for a massage parlour as a sex worker until her contract was
terminated without a hearing on the grounds of disruptive behaviour and
substance abuse.
 CCMA ruled that it lacked jurisdiction to entertain a matter involving
illegal work.
 Court concluded that within the constitutional right to fair labour
practices, Kylie was in an employment relationship even if there was no
valid contract. This relationship fell within the scope of the application of
the LRA that, amongst other things, advances the goals of social justice,
fairness, and respect for all.
 Even though the court was mindful of the fact that reinstatement would
be manifestly against public policy, the par delictum rule could be relaxed
in certain circumstances and compensation could be awarded.

THE FUTURE OF WORK

Discuss whether the Labour Court found that Uber drivers are
employees and the reasons for the decision:

In the case of Uber South Africa Technology Services (Pty) Ltd v National
Union of Public Service and Allied Workers (NUPSAW), the Labour Court ruled
that Uber drivers are not employees of Uber South Africa (Uber SA). The
primary reason for this decision was the lack of a formal contractual
employment relationship between Uber SA and the drivers. According to the
court, Uber operates as a platform that connects independent drivers (who
are not employed by Uber) with users in need of transportation, rather than
as an employer with a direct employer-employee relationship.

Uber SA, as a subsidiary of Uber BV, provides services such as marketing,

training, and support to facilitate the connection between drivers and users,
but it does not own any vehicles and does not directly control the drivers in a
traditional employer sense. The drivers are registered with Uber and have
the autonomy to choose when and where they wish to work, reinforcing the
argument that Uber drivers operate more as independent contractors than
as employees. The court’s decision emphasized the contractual freedom and
the absence of a clear, formal employment agreement between Uber SA and
its drivers, which led to the conclusion that the drivers did not meet the
criteria for employee status under South African labour law.

Discuss the reasons why Van Eck and Nemusimbori criticised the
court's decision in Uber SA:

Van Eck and Nemusimbori criticized the Uber SA (LC) decision for several
reasons. They argued that the court missed an opportunity to establish a
new, more progressive framework for regulating workers in the gig economy.
They pointed out that the court relied too heavily on a narrow, formalistic
approach, focusing on the lack of a formal employment contract, rather than
adopting a broader, constitutional view of what constitutes a worker’s rights
in the modern economy.

They contend that the court should have taken a more expansive view that
considers the nature of the relationship between Uber and its drivers. They
argue that Uber is not merely a technological company but is in fact a
transportation services provider, operating through a complex structure of
holding companies and subsidiaries in various countries. This structure, they
suggest, should not be allowed to shield Uber from its responsibilities as an
employer simply because of the lack of a formal employment agreement.

Furthermore, they criticize the court’s reliance on the absence of a formal

contract as the key determinant for employee status. They argue that the
court should have instead considered the realities of the gig economy, where
many workers are engaged in non-traditional, flexible forms of work that
often do not fit neatly into the categories of "employee" or "independent
contractor." They also suggest that the court should have explored foreign
legal precedents and adopted a more nuanced understanding of who
qualifies as an employer in the context of the gig economy, focusing on the
nature of Uber's role and its responsibility toward workers.

In conclusion, Van Eck and Nemusimbori believe that the decision in Uber SA
(LC) reflects a narrow legal outlook that fails to fully address the broader
societal and constitutional issues at play in the regulation of gig economy
work. They advocate for a broader constitutional approach that considers the
real economic relationship between companies like Uber and their drivers,
rather than focusing solely on formal contractual arrangements.