An employee is a person who is party to a contract of employment or locatio conduction operarum (the letting and hiring of personal services in return for a money payment). The question is whether or not the contract is valid or invalid. In the case of Discovery Health Ltd v CCMA & Others the Labour Court found the definition of ‘employee’ is not dependent on a valid employment contract. The Constitution states that everyone is entitled to fair labour practices and not just for those party to a contract. Therefore as long as someone is an employee, the Labour Relations Act 66 of 1995 (LRA) applies.
In Kylie v CCMA & others the court dealt with the claim of unfair dismissal by a sex worker against her former employer, a massage parlour. The work that she did mostly contravened the provisions of the Sexual Offences Act (SOA). The court held that there was no doubt that Kylie was an employee and that courts cannot sanction illegal activities as the protection of the Constitution did not extend to people performing prohibited work. On appeal, the Labour Appeal Court that a sex worker is not entitled to the full range of remedies in the LRA, as this would violate the SOA, however this does not preclude her from compensation for unfair dismissal. The CCMA was thus granted jurisdiction to hear an unfair dismissal claim by a sex worker.
Some employees to valid employment contracts cannot rely on the LRA in respect of all their disputes, as some are excluded by section 2 of the Act. In Khanyile v CCMA & others it was held that magistrates are not employees for purposes of the LRA, nor are they members of a legitimate worker co-operative established in terms of the Co-operatives Act. One would have to first establish whether the parties concerned are employers and if not, then their matter will be dealt with by another branch of the law.
It may be difficult to know whether a party is an employee or an independent contractor. The oldest test of such is supervision and control. The strictest formulation of the test requires that employer be able to control not only what is done by employee but also how. The second test is the organisation/integration test which looks at whether the person falls within the organisation of the employer, i.e. does the person work in an independent capacity or do they sell their labour to another?
The third test is the dominant impression test which looks at the relationship between the alleged employer and employee, the relationship must be assessed in view that it is one of employment against those factors which tend to demonstrate the existence of another type of relationship. The LRA has attempted to bring greater certainty to the question of whether a party is an employee or independent contractor. Section 200A provides the factors to consider:
- The manner in which that person works is subject to the control or direction of the other;
- The person’s hours of work are subject to the control or direction of the other;
- That person forms part of the organisation, where he or she works for an organisation;
- That person has worked for the other for an average of at least 40 hours per month for the last three months;
- That person is economically dependent on the person for whom he or she works or provides services;
- That person is provided with his or her tools of trade or work equipment by the other;
- That person only works or supplies services to one person.
This presumption will apply regardless of the form of the contract and whatever the parties choose to call the employment contract is not sufficient to rebut the presumption. This presumption will not apply to persons who earn in excess of an amount determined from time to time by the Minister in terms of section 6(3) of the Basic Conditions of Employment Act. Any of the contracting parties may approach the CCMA for an advisory award on whether the persons involved in the arrangement are employees. The dominant impression test remains applicable today and should be taken into account when determining the nature of the relationship between the parties.
Section 198 of the LRA states that a person whose services are provided to a client by a temporary employment service and their remuneration is paid by the labour broker, he or she is the employee of the labour broker. Temporary employees have taken into employment on a temporary basis and there is no expectation of permanent employment. It is known that the employment will come to an end at a particular date and the employment is for a fixed period of time or coupled to a specific task which needs to be completed by employee.
In SA Post Office Ltd v Mampeule a provision in a contract that provides for the automatic termination of the employment of an employee upon the occurrence of some event provided for in the contract limits the employee’s right under the LRA and thus void. The case states that the labour broker employee’s employment contract is no longer brought to an automatic end. It has also come to be known that employers who tell employees to stay home until another project comes up, have effectively dismissed them. In Enforce Security Group v Fikile & others stated that an automatic termination clause based on an event described in a fixed term contract o employment will not always be invalid. It held that section 186(1) of the LRA was not intended to amend the common law relating to fixed terms contracts and that the wording of section 186(1)(a) requires an act by the employer terminating employment.
Relevant considerations in determining whether the clause had been included in the contract to circumvent the employer’s fair dismissal obligations would include the precise wording of the automatic termination clause and the purpose of the contract; whether it is left to the employer’s client to pick and choose which employees will render their services in terms of their fixed-term contracts; whether the automatic termination clause is used to unfairly target a particular employee; and whether the event that triggers the termination clause is based on proper economic and commercial considerations.
AMCU & others v Piet Wes Civils CC & another held that the termination of its contract with the employer by the client was not a “specific event” as envisaged in section 198B (1). The Labour Court stated that this is not a fixed term contract. It remains to be seen what the impact of section 198B affects the way the courts approach such automatic termination clauses in the future. Normally, a temporary or fixed-term contract whose duration is determined by a specified termination date or by the completion of a specified task or by the occurrence of a specific event will come to an end not by way of dismissal but in terms of, or as a consequence of, the provisions of section 186(1) (a) of the LRA, which provides, in its recently amended form, that termination of employment with or without notice constitutes a dismissal.
A “casual employee” is not recognised by the LRA or Basic Conditions of Employment (BCEA) but it remains in common use. They are temporary employees but may also be part-time employees. However they are usually employed on a daily basis. Employees might work on a full-time or part-time basis. All employment is temporary as it will terminate at some point and permanent employment is employment of an indefinite period. Probationary employees will have their permanent employment confirmed should they meet the standard of performance and behaviour set by the employer within a specified probationary period. Probation is not a form of temporary employment and that a probation clause in an employment contract will normally not itself constitute a fixed term contract.