EMPLOYEES VS INDEPENDENT CONTRACTORS

Recent amendments have been passed changing some of key aspects of Labour Legislation in South Africa.  This legislation is the output of discussions that have taken place with the major stakeholders and attempts to address the various constituent needs in a practical and balanced way.  

Employees vs Independent Contractors:

Employee, and not Independent Contractors, are covered by the Labour Relations Act and the Basic Conditions of Employment Act.  Since Independent Contractors are excluded from the Basic Conditions of Employment Act and the Labour Relations Act they would not be entitled to:

• annual leave,
• sick leave, 
• claim unfair dismissal.

Section 200A of LRA and Section 83A of the Basic Conditions of Employment Act creates a series of rebuttable presumptions as to who is an employee, which applies to all workers earning below R89 455.00 per year.  (Please note that the earnings ceiling is changed from time to time.  Contact the Department of Labour for the latest applicable figure.  Their contact details are available on their website  http://www.labour.gov.za/contact/center_offices_display.jsp ) 

Unless 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 -

• the manner in which the person works is subject to the control or direction of another person;
• a person's hours of work are subject to the control or direction of another person;
• in the case of a person who works for an organisation, the person forms part of that organisation;
• the person has worked for that other person for an average of at least forty hours per month over the last three months;
• the person is economically dependent on the other person for whom he or she works or renders services;
• the person is provided with tools of trade or work equipment by the other person; and
• the person only works for or renders services to one person. 

Should a dispute exist over the nature of any proposed or existing work arrangement, the CCMA should be approached for an advisory arbitration award.

Information provided on this page is based on the document “Labour Law Amendments 2002” found on the Department of Labour’s website.  

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