Labour Law
Chapter 2
Development of the employment contract
The roots of South African common law contract of employment can be traced back to the
species location conductio (letting and hiring) of Roman law. There are three types of locatio
conductio :
locatio conductio rei – the letting and hiring of a specified thing for a money payment
locatio conductio operas - (the forerunner of the contract of the independent contractor)
locatio conductio operarum – the letting and hiring of personal services in return for a
money payment
Definition of the employment contract – The contract of employment is an agreement between
two parties, in terms of which one party (the employee) places his or her labour potential at the
disposal of the other party (the employer) in exchange for some form of remuneration.
The essential elements of the employment contract can be summarized as follows:
A voluntary agreement
Between two parties
In terms of which the employee places labour potential at the disposal and under the
control of the employer
In exchange for some form of remuneration by the employer
The element of control or subordination was at one time considered to be the most important
distinguishing feature between a contract of employment and a contract of the independent
contractor. The element of control has been reduced to the right of the employer to control the
employee.
Definition of an employee
The LRA defines an employee as follows:
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;
Any person who in any manner assists in carrying on or conducting the business of the
employer
The tests developed by the courts
The control test
The organization test
The multiple or dominant test
1. The right to supervision
2. Extent to which the worker depends on the employer in the performance of duties
3. Whether the employee is not allowed to work for another
4. Whether the employee is required to devote a specific time to his work
5. Whether the employee is obliged to perform his duties personally
6. Whether the employee is paid according to a fixed rate or by commission
7. Whether the employee provides his own tools and equipment
8. Whether the employer has the right to discipline the employee
Presumption as to who is an employee
Until the contrary is provided, a person who works for, or renders services to, any other person is
presumed, regardless of the form of 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
The 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 organization, the person forms part of that
organization
The person has worked for that other person for an average of at least 40 hours per
month over the last three months
The person is economically dependant on the other person for whom he or she works or
renders services
The person is provided with tools of trade or equipment by the other person
The person only works for or renders services to one person
Categories of employees
Permanent employees – ongoing employment relationship, indefinite period, can be
terminated by agreement, notice or dismissal. May be subject to probationary period.
Temporary employees – fixed term contract of employment for a specified period or
project. Can be terminated by period or project ending.
Part-time and full-time employees – Full-time employees work for one employer 5 or 6
days a week. Part-time employees work for one employer 3 or 4 days a week and can
work for another employer on thee other days but they still have protection against unfair
dismissal.
Probationary employees
Senior managerial employees
Concluding employment contracts
There has to be an agreement and intention that both parties are entering into an employment
contract. There must be consensus on the contents of the contract. No employer may employ a
child under the age of 15. Children under the age of 7 have no contractual capacity. You may not
employ illegal foreigners. The employer is usually in a position to dictate the contents of the
employment contract. An oral employment is as binding and valid as a written one. An employee
is obliged to comply with all workplace health and safety rules and take reasonable care for his
own health and safety. The employer is obliged to give the employee annual leave. The most
important duty of the employee is to tender his or her services to the employer as and when
required by the contract. The employee must perform his or her tasks competently and without
negligence. If the worker is incompetent or negligent, the employer may terminate the contract of
employment. The employee must obey lawful and reasonable instructions of the employer.
The most important duties of the employee are summarized below:
the duty to enter into the service of the employer
the duty to exercise due care and diligence
the duty to obey the commands of the employer
the duty to act in good faith
to tender his or her services
The contractual duties of the employer
To remunerate the employee
A duty to provide work
Safe working conditions
Other terms and conditions of employment
Freedom to contract – An employee employed to work 5 days a week may not work
more than 9 hours a day. Is entitled to 3 weeks annual leave.
What are terms and conditions of employment – Normally include issues such as
working hours, leave, sick leave, the length of notice of termination, remuneration.
Chapter 2
Development of the employment contract
The roots of South African common law contract of employment can be traced back to the
species location conductio (letting and hiring) of Roman law. There are three types of locatio
conductio :
locatio conductio rei – the letting and hiring of a specified thing for a money payment
locatio conductio operas - (the forerunner of the contract of the independent contractor)
locatio conductio operarum – the letting and hiring of personal services in return for a
money payment
Definition of the employment contract – The contract of employment is an agreement between
two parties, in terms of which one party (the employee) places his or her labour potential at the
disposal of the other party (the employer) in exchange for some form of remuneration.
The essential elements of the employment contract can be summarized as follows:
A voluntary agreement
Between two parties
In terms of which the employee places labour potential at the disposal and under the
control of the employer
In exchange for some form of remuneration by the employer
The element of control or subordination was at one time considered to be the most important
distinguishing feature between a contract of employment and a contract of the independent
contractor. The element of control has been reduced to the right of the employer to control the
employee.
Definition of an employee
The LRA defines an employee as follows:
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;
Any person who in any manner assists in carrying on or conducting the business of the
employer
The tests developed by the courts
The control test
The organization test
The multiple or dominant test
1. The right to supervision
2. Extent to which the worker depends on the employer in the performance of duties
3. Whether the employee is not allowed to work for another
4. Whether the employee is required to devote a specific time to his work
5. Whether the employee is obliged to perform his duties personally
6. Whether the employee is paid according to a fixed rate or by commission
7. Whether the employee provides his own tools and equipment
8. Whether the employer has the right to discipline the employee
Presumption as to who is an employee
Until the contrary is provided, a person who works for, or renders services to, any other person is
presumed, regardless of the form of 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
The 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 organization, the person forms part of that
organization
The person has worked for that other person for an average of at least 40 hours per
month over the last three months
The person is economically dependant on the other person for whom he or she works or
renders services
The person is provided with tools of trade or equipment by the other person
The person only works for or renders services to one person
Categories of employees
Permanent employees – ongoing employment relationship, indefinite period, can be
terminated by agreement, notice or dismissal. May be subject to probationary period.
Temporary employees – fixed term contract of employment for a specified period or
project. Can be terminated by period or project ending.
Part-time and full-time employees – Full-time employees work for one employer 5 or 6
days a week. Part-time employees work for one employer 3 or 4 days a week and can
work for another employer on thee other days but they still have protection against unfair
dismissal.
Probationary employees
Senior managerial employees
Concluding employment contracts
There has to be an agreement and intention that both parties are entering into an employment
contract. There must be consensus on the contents of the contract. No employer may employ a
child under the age of 15. Children under the age of 7 have no contractual capacity. You may not
employ illegal foreigners. The employer is usually in a position to dictate the contents of the
employment contract. An oral employment is as binding and valid as a written one. An employee
is obliged to comply with all workplace health and safety rules and take reasonable care for his
own health and safety. The employer is obliged to give the employee annual leave. The most
important duty of the employee is to tender his or her services to the employer as and when
required by the contract. The employee must perform his or her tasks competently and without
negligence. If the worker is incompetent or negligent, the employer may terminate the contract of
employment. The employee must obey lawful and reasonable instructions of the employer.
The most important duties of the employee are summarized below:
the duty to enter into the service of the employer
the duty to exercise due care and diligence
the duty to obey the commands of the employer
the duty to act in good faith
to tender his or her services
The contractual duties of the employer
To remunerate the employee
A duty to provide work
Safe working conditions
Other terms and conditions of employment
Freedom to contract – An employee employed to work 5 days a week may not work
more than 9 hours a day. Is entitled to 3 weeks annual leave.
What are terms and conditions of employment – Normally include issues such as
working hours, leave, sick leave, the length of notice of termination, remuneration.
