lOMoARcPSD|50337824
individual labour law
Indivudual Labour Law (University of South Africa)
, lOMoARcPSD|50337824
STUDY UNIT 1: THE EMPLOYEE AND THE IMPACT OF COMMON LAW ON THE CONTRACT OF
EMPLOYMEN
T
KEY CONCEPTS TO LOOK OUT FOR IN THE UNIT
• employee
• employer
• labour broker
• independent contractor
• control test
• organisation test
• dominant impression test
• illegal workers
• the common law
• contract of employment
• breach of contract
• restraint of trade
• termination of contract
vicarious liability
Employee
According to the LRA, BCEA, EEA and SDA, 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 on or conducting the business of an
employer.
Guidelines to distinguish between employees and independent
contractors
Control test
The test looks at the control over the work the person does, the manner in which the work must be
done and when the work must be done.
Organisation test ’s work is integrated
This test looks at whether the person is part and parcel of the business. The
person into the business of the employer and is not just an accessory to the
business. Dominant impression test
This test is favoured by the courts and considers the employment relationship as a whole, rather
than concentrating on only one factor.
Categories of
employees
Part of the application of the dominant impression test
Categories of employee Description
Permanent employee The person is employed for an indefinite period.
Temporary/ The person is employed for a specific period or for a specific project.
contract/fixedterm
employee
, lOMoARcPSD|50337824
Casual employee • The person works for the same employer on not more than three days
per week.
• The person’s employment can either be temporary or permanent.
Part-time employee • The person works for the employer only at certain times of the day,
for example, mornings or at night time.
• The person works on certain days of the week, mostly limited to
three days per week.
The person’s employment can either be temporary or permanent.
Illegal workers
Even though an illegal worker is not entitled to any protection under the LRA, he or she may still be
protected by sections 23 and 10 of the Constitution. In addition, the employer who employs an illegal
foreigner may not refuse to remunerate that worker on the basis that the worker is an illegal foreigner.
If the employer fails to pay such a worker the worker can approach a court of law to enforce his or her
contractual rights against the employer. Statutory exclusion of workers
The following employees are excluding from the scope of the definition of employee in the LRA:
• Members of the National Defence Force.
• Members of the National Intelligence Agency.
• Members of the South African Secret Service.
• Members of the South African national Academy of Intelligence. Members of Comsec.
The following employees are excluding from the scope of the definition of employee in the BCEA:
• Unpaid volunteers working for charitable organisations or organisations with a public purpose.
People employed on vessels at sea.
Employer
Existing legislation does not provide a definition for an employer. An employer can be defined as:
• Any person or body which employs any person in exchange for remuneration and Any person
who permits any person to assist him or her in conducting his or her business.
Labour broker
A labour broker is deemed to be the ‘employer’ of a person whose services have been obtained for, or
provided to, a client for reward. Independent contractor
An independent contractor is contracted to perform a specific task or to produce a specific result, while an
employee is appointed to render personal services in terms of a job description.
Duties of the employer and employee
Employer and employee duties flow from the contract of employment, labour legislation, the common law
and collective agreements. The primary duty of the employee is to make his or her services available to the
employer and the duty of the employer is to remunerate the employee for making his or her services
available to the employer.
It is therefore important to understand that it is not necessary for the employee to perform actual work in
order to receive remuneration.
• Duties of employer o To remunerate the employee
The primary duty of the employer is to pay the employee, and if the employee does not
work, no pay is due. The BCEA does however provide for paid leave in certain circumstances.
o To provide the employee with work
The employer is generally not required to provide the employee with work to do except in
certain circumstances, such as where the employee’s salary is commission-based and
dependant on actual work done, or where the employee’s success is dependant on the
performance of certain duties on a regular basis e.g. an actor.
, lOMoARcPSD|50337824
o To provide safe working conditions
This duty entails that the employer may, depending on the nature and scope of work or
workplace, have to provide the employee with protective devices, install safety equipment and
exercise proper supervision.
o To deal fairly with the employee
This duty is captured by the constitutional right to fair labour practices.
• Duties of employees o To render services to the employer
This is the primary duty of an employee, whereby the employee’s labour potential is placed
at the disposal of the employer.
o To work competently and diligently
When the employee enters into the employment contract with the employer, he/she
guarantees that he/she is capable of doing the work, and that it will be performed
competently and diligently.
o To obey lawful and reasonable instructions
The employee is under the control and authority of the employer. Non-compliance of this
duty will constitute serious insubordination and breach of contract, except if the employee
refuses to follow orders outside the scope of the employment contract.
o To serve the employer’s interests and act in good faith (fiduciary duty)
An employment relationship is built on trust and confidence, and this is an implicit term
of an employment contract, which includes the duty not to work against the employer’s interests and
not to compete with the employer. Vicarious liability
In terms of this doctrine the employer may be held liable for the wrongful acts or omissions of the
employee committed during the course of the employee’s employment, provided certain requirements
have been met.
Requirements that must be met in order for the employer to be held liable for the employee’s wrongful
conduct:
• There must be a contract of employment.
• The employee must have acted in the course and scope of employment.
• The employee must have committed a delict. (e.g. third party damages)
The common law
A contract of employment just like any other type of contract is regulated by common law. Note should
be taken that in cases where a specific labour matter is not covered by the LRA or any other labour
legislation the common law will apply. Contract of employment
In order for a contract of employment to be valid, parties to the contract must have satisfied all the
following common law requirements for the conclusion of a valid contract:
• Both parties must agree
• Have capacity to enter into the contract
• The contract must be lawful Possible to perform
• Where there are formalities agreed upon by the parties, all those formalities must have been
satisfied.
The law does not require the contract of employment to be in writing.
Breach of contract
In the event of breach of contract the innocent party has a choice either to accept the breach and cancel
the contract, or to compel the defaulting party to perform. In addition the innocent party can claim
damages. Breach of contract by an employer could lead to unfair labour practise, unfair discrimination, or
an unfair dismissal. Where an employee breaches a contract, it could lead to misconduct. An employee can
claim breach of contract through the High Court, which will have jurisdiction and not the Labour Court and
only common-law remedies will be available. This route will deal with lawfulness and not fairness.
individual labour law
Indivudual Labour Law (University of South Africa)
, lOMoARcPSD|50337824
STUDY UNIT 1: THE EMPLOYEE AND THE IMPACT OF COMMON LAW ON THE CONTRACT OF
EMPLOYMEN
T
KEY CONCEPTS TO LOOK OUT FOR IN THE UNIT
• employee
• employer
• labour broker
• independent contractor
• control test
• organisation test
• dominant impression test
• illegal workers
• the common law
• contract of employment
• breach of contract
• restraint of trade
• termination of contract
vicarious liability
Employee
According to the LRA, BCEA, EEA and SDA, 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 on or conducting the business of an
employer.
Guidelines to distinguish between employees and independent
contractors
Control test
The test looks at the control over the work the person does, the manner in which the work must be
done and when the work must be done.
Organisation test ’s work is integrated
This test looks at whether the person is part and parcel of the business. The
person into the business of the employer and is not just an accessory to the
business. Dominant impression test
This test is favoured by the courts and considers the employment relationship as a whole, rather
than concentrating on only one factor.
Categories of
employees
Part of the application of the dominant impression test
Categories of employee Description
Permanent employee The person is employed for an indefinite period.
Temporary/ The person is employed for a specific period or for a specific project.
contract/fixedterm
employee
, lOMoARcPSD|50337824
Casual employee • The person works for the same employer on not more than three days
per week.
• The person’s employment can either be temporary or permanent.
Part-time employee • The person works for the employer only at certain times of the day,
for example, mornings or at night time.
• The person works on certain days of the week, mostly limited to
three days per week.
The person’s employment can either be temporary or permanent.
Illegal workers
Even though an illegal worker is not entitled to any protection under the LRA, he or she may still be
protected by sections 23 and 10 of the Constitution. In addition, the employer who employs an illegal
foreigner may not refuse to remunerate that worker on the basis that the worker is an illegal foreigner.
If the employer fails to pay such a worker the worker can approach a court of law to enforce his or her
contractual rights against the employer. Statutory exclusion of workers
The following employees are excluding from the scope of the definition of employee in the LRA:
• Members of the National Defence Force.
• Members of the National Intelligence Agency.
• Members of the South African Secret Service.
• Members of the South African national Academy of Intelligence. Members of Comsec.
The following employees are excluding from the scope of the definition of employee in the BCEA:
• Unpaid volunteers working for charitable organisations or organisations with a public purpose.
People employed on vessels at sea.
Employer
Existing legislation does not provide a definition for an employer. An employer can be defined as:
• Any person or body which employs any person in exchange for remuneration and Any person
who permits any person to assist him or her in conducting his or her business.
Labour broker
A labour broker is deemed to be the ‘employer’ of a person whose services have been obtained for, or
provided to, a client for reward. Independent contractor
An independent contractor is contracted to perform a specific task or to produce a specific result, while an
employee is appointed to render personal services in terms of a job description.
Duties of the employer and employee
Employer and employee duties flow from the contract of employment, labour legislation, the common law
and collective agreements. The primary duty of the employee is to make his or her services available to the
employer and the duty of the employer is to remunerate the employee for making his or her services
available to the employer.
It is therefore important to understand that it is not necessary for the employee to perform actual work in
order to receive remuneration.
• Duties of employer o To remunerate the employee
The primary duty of the employer is to pay the employee, and if the employee does not
work, no pay is due. The BCEA does however provide for paid leave in certain circumstances.
o To provide the employee with work
The employer is generally not required to provide the employee with work to do except in
certain circumstances, such as where the employee’s salary is commission-based and
dependant on actual work done, or where the employee’s success is dependant on the
performance of certain duties on a regular basis e.g. an actor.
, lOMoARcPSD|50337824
o To provide safe working conditions
This duty entails that the employer may, depending on the nature and scope of work or
workplace, have to provide the employee with protective devices, install safety equipment and
exercise proper supervision.
o To deal fairly with the employee
This duty is captured by the constitutional right to fair labour practices.
• Duties of employees o To render services to the employer
This is the primary duty of an employee, whereby the employee’s labour potential is placed
at the disposal of the employer.
o To work competently and diligently
When the employee enters into the employment contract with the employer, he/she
guarantees that he/she is capable of doing the work, and that it will be performed
competently and diligently.
o To obey lawful and reasonable instructions
The employee is under the control and authority of the employer. Non-compliance of this
duty will constitute serious insubordination and breach of contract, except if the employee
refuses to follow orders outside the scope of the employment contract.
o To serve the employer’s interests and act in good faith (fiduciary duty)
An employment relationship is built on trust and confidence, and this is an implicit term
of an employment contract, which includes the duty not to work against the employer’s interests and
not to compete with the employer. Vicarious liability
In terms of this doctrine the employer may be held liable for the wrongful acts or omissions of the
employee committed during the course of the employee’s employment, provided certain requirements
have been met.
Requirements that must be met in order for the employer to be held liable for the employee’s wrongful
conduct:
• There must be a contract of employment.
• The employee must have acted in the course and scope of employment.
• The employee must have committed a delict. (e.g. third party damages)
The common law
A contract of employment just like any other type of contract is regulated by common law. Note should
be taken that in cases where a specific labour matter is not covered by the LRA or any other labour
legislation the common law will apply. Contract of employment
In order for a contract of employment to be valid, parties to the contract must have satisfied all the
following common law requirements for the conclusion of a valid contract:
• Both parties must agree
• Have capacity to enter into the contract
• The contract must be lawful Possible to perform
• Where there are formalities agreed upon by the parties, all those formalities must have been
satisfied.
The law does not require the contract of employment to be in writing.
Breach of contract
In the event of breach of contract the innocent party has a choice either to accept the breach and cancel
the contract, or to compel the defaulting party to perform. In addition the innocent party can claim
damages. Breach of contract by an employer could lead to unfair labour practise, unfair discrimination, or
an unfair dismissal. Where an employee breaches a contract, it could lead to misconduct. An employee can
claim breach of contract through the High Court, which will have jurisdiction and not the Labour Court and
only common-law remedies will be available. This route will deal with lawfulness and not fairness.
