Employee or independent contractor?
- a. Dominant impression test:
In order to assist with the distinction between an employee and an independent contractor, the courts have formulated a number of tests, the dominant impression test which was accepted by the Labour Appeal Court in SABC v McKenzie:
Some of the important characteristics of the contract of employment and the contract of work, respectively, are:
- i.The object of the contract of service is the rendering of personal services by the employee to the employer. The services are the object of the contract. The object of the contract of work is the performance of a certain specified work or the production of a certain specified result.
- ii.According to a contract of service the employee will typically be at the beck and call of the employer to render his personal services at the behest of the employer. The independent contractor, by way of contrast, is not obliged to perform the work himself or to produce the result himself, unless otherwise agreed upon. He may avail himself of the labour of others as assistants or employees to perform the work or to assist him in the performance of the work.
- iii.Services to be rendered in terms of a contract of service are at the disposal of the employer who may in his own discretion subject, of course, to questions of repudiation decide whether or not he wants to have them rendered. The independent contractor is bound to perform a certain specified work or produce a certain specified result within a time fixed by the contract of work or within a reasonable time where no time has been specified.
- iv.The employee is subordinate to the will of the employer. He is obliged to obey the lawful commands, orders or instructions of the employer who has the right of supervising and controlling him by prescribing to him what work he has to do as well as the manner in which it has to be done. The independent contractor, however, is notionally on a footing of equality with the employer. He is bound to produce in terms of his contract of work, not by the orders of the employer. He is not under the supervision or control of the employer. Nor is he under any obligation to obey any orders of the employer in regard to the manner in which the work is to be performed. The independent contractor is his own master.
- v.A contract of service is terminated by the death of the employee whereas the death of the parties to a contract of work does not necessarily terminate it.
- vi.A contract of service terminates on expiration of the period of service entered into while a contract of work terminates on completion of the specified work or on production of the specified result.
- b.Additional criteria to assist in determining the true relationship between the parties:
- i.The contract itself:
Will usually state the intention of the two parties to the contract - meaning whether it is intended to be an employer/employee relationship or an independent contractor relationship? The courts will not simply accept a contract at face value. They will investigate the true nature and realities of the relationship, and will not bind themselves to what the parties have chosen to call the relationship.
Therefore, despite the fact that the contract may emphasise throughout that the relationship is that of an independent contractor, the courts will not simply accept that at face value. They will dig much deeper.
They could get away with a retrenchment process [here] if they had kept the Bethalites on Temp contracts However this too would be open to challenge in the courts as you cannot keep someone indefinitely on your books without it creating the expectation that this is actually permanent employment - You have to be sleazy about the employment relationship all the same !