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Continuing from Part 1 which was published last week, we firstly define the term " rebuttable presumption."

          

A "rebuttable presumption"  (Latin, praesumptio iuris tantum) in both common law and civil law (which is what we are dealing with here)  is an assumption that is made that is taken to be true unless someone comes forward to contest it and prove otherwise. Most of what follows is quoted from the Code itself. The Labour Relations Act – section 200A and the BCEA  – section 83A - were amended in 2002, and these amendments introduced a rebuttable presumption as to whether a person is an employee and therefore covered by the act.

               

The section is only applicable to employees who earn less than the threshold amount determined from time to time by the Minister of Labour – presently R115572-00 per annum. On page 9 of the Code, paragraph 20, it is stated that in cases where the presumption is not applicable - because the person earns above the threshold amount - the factors listed in the presumption may be used as a guide for the purpose of determining whether a person is in reality in an employment relationship or is self-employed (independent contractor.) In this connection, the code refers to Denel (Pty) Ltd v Gerber 201 [2005] 9BLLR 849 (LAC).

                

A person is presumed to be an employee if any one of the 7 factors listed in the LRA – section 200A – or the BCEA section 83A - is present in the relationship between that person and the person for whom they work or to whom they render services. It must be emphasised that not all of these factors must be present - only one of them needs to be present. Subject to the earnings threshold, the presumption applies to any proceedings in terms of either the BCEA or the LRA in which a person alleges " I am an employee in terms of the LRA or BCEA", and the other party disputes that allegation.

                   

In order to be presumed to be an employee, any one of the following factors must be present :

(a)  the person works for or renders services to the person or entities cited in the proceedings as the employer ; and
(b)  any one of the seven listed factors is present in their relationship with that person or entity.

        

Those seven factors are as follows :

           

(a)  the manner in which the person works is subject to the control or direction of another person.

The factor of control or direction will be present if the person is required to obey the lawful and reasonable commands, orders or instructions of the employer or the employer's personnel, as to the manner in which they are to work. In other words, the person is required to obey the work performance instructions of the employer. This requirement is present in a relationship in which a person supplies only labour, and the other party directs the manner in which he or she works.

              

Control and direction is not present if a person is hired to perform a particular task or produce a particular product and is entitled to determine the manner in which the task is to be performed or the product produced.  For example, you call in a painting contractor to repaint your office block. You do not tell him what scaffolding to use, or how to erect the scaffolding. You do not tell him how to scrape the old paint off the walls, nor do you tell him what undercoat to apply or how many coats of paint to apply. You will probably only have a say in the choice of colour, and perhaps the type of paint that you want - matte finish, glossy finish, eggshell enamel or whatever.

        

But apart from that, the employer will have no say over how the job is done, or the materials used. In an employment relationship, the "employer" has the right to choose which tools, staff, raw materials, work performance specifications, etc are to be used. Furthermore a strong indicator of an employment relationship is where the "employee" is subject to the employer's disciplinary code, company policies and procedures.

        

(b) the person's hours of work are subject to the control or direction of another person.

If the person's hours of work are stipulated, usually in a contract or letter of appointment, and the contract permits the employer to determine the hours of work, then this will be a strong indicator of an employment relationship. The absence of stipulated hours of work in a contract will not necessarily mean that it is not a contract of employment. Sufficient control or direction may be present if the employer is entitled to determine the number of hours that the person is required to work within a specified period - per day, per week or whatever. Flexible working time arrangements are also found to be present in an employment relationship.

          

(c) in the case of a person who works for an organization, the person forms part of that organization.

This will probably apply in respect of any employer that is a corporate entity.  It would not apply for example to a person employing a domestic worker - although in such instances, the domestic worker is obviously an employee.

          

The factor will be present if the employee's services form an integral part of the employer's organisation or operations. A person who works for or supplies services to an employer as part of conducting his own business interests does not form part of the employer's organization. Therefore, a person who, for example, has a registered close corporation (cc) and who renders services to another organization, does not form part of that other person's organization.

          

Indications that the person operates his own business is that they bear risks such as bad workmanship, poor performance, price increases and so on. In the case of an employment relationship, the employer will typically bear these risks, and not the employee.

         

(d) the person has worked for the other person for an average of at least 40 hours per month over the last three months.

This is self-explanatory.

               

(e) the person is economically dependent on the other person for whom he or she works or renders services.

This means that the person for whom the employee is working, is generally the sole source for the supply of work, and will be the employee's sole source or principal source of income. Economic dependence will not normally be present if the person is genuinely self-employed or is running his/her own business. An important indicator to self-employment is that the person is free to contract with other companies or persons to do work for them or to provide services to them.

             

The fact that a self-employed person might only have one " client" does not necessarily mean that they are an employee of that client. If other factors are present, such as some of those mentioned, it will not necessarily form an employee-employer relationship.

          

Part time workers - the fact that a part-time worker is able to work for another employer during those periods in which he is not working, does not change his status as an employee.The same would apply to a full-time employee who has an after–hours, supplementary income-producing job. He remains an employee of the employer.

           

(f) the person is provided with the tools of trade or work equipment by the other person.

It is of no consequence whether the tools or equipment is supplied to the employee free of charge, or whether the employee pays for them. This provision includes equipment such as the provision of telephones, computers etc.

               

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

Obviously, this condition will not be present in the case of a self-employed person, because such a person is free to do work for or supply services to any number of other persons or organizations.  Very importantly, the Code states that it is not relevant whether that work is permitted in terms of the employment relationship, or whether it involves "moonlighting" contrary to the terms of the relationship.

             

It is important to note that if any one (and not necessarily all) of the above factors is present, then the person is presumed to be an employee until the employer or other person proves otherwise. The employer will be required to lead evidence concerning the nature of the working relationship.

         

More next week…

       

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