Page 10 - DRG HR HANDBOOK- Nikita Pillay

VARIATIONS OF EMPLOYMENT

CONTRACTS AND RELATIONSHIPS

n employment contract is a written agreement ƒ Is not subject to discipline by another
entered into between an employer and an employee,
ƒ Is not protected by labour legislation
Adrawn up with agreed terms and conditions, and
ƒ Could work any hours that suit him/her
signed at the time the employee is hired.
ƒ Is allowed to enter into as many contracts as he wants
It define and outlines the exact nature of their business
ƒ Is not supervised on a day-to-day basis
relationship, specifically what compensation the employee
will receive in exchange for specific work performed, and INDEPENDENT CONTRACTORS
for what period of time this service is required.
An independent contractor, Freelancers, or Independent
In order to differentiate between a Dependent Worker
Consultants on the other hand does not sign an
status (Employees), and an Independent Worker status
employment contract but enters into a Contract of Work,
(Independent Contractors), the Common Law Dominant
or a Service Agreement.
Impression Test, needs to be applied.
An independent contractor would be a person who is
Section 200A of the Labour Relations Act was introduced
registered as a provisional tax payer, will work his own
in 2002 in order to deal with the abuses that came about to
hours and runs his own business.
avoid the consequences of an employment relationship.
This type of contractor is free to carry out work for more
The Act works on a presumption of employment that
than one organisation simultaneously and is not entitled
came about as a result of the legal test of the “dominant
to any additional benefits as provided to permanent
impression.” It deals with the presumptions that apply to
employees of that same organisation.
determine who is an employee in the event of a dispute
about the employment status of an employee. The contractor issues an invoice to the organisation,
which is not subject to statutory deductions of PAYE and
A Dependent Contractor, most commonly known as
UIF, to the organisation.
an employee:
ƒ Is supervised by management The Common Law Dominant Impression Test helps to
clearly identify and differentiate an Independent Contractor
ƒ Renders personal services
to an Employee.
ƒ Employment terminates on death, breach or
expiration of the period of employment Certain key factors need to be looked at to determine
if a worker is independent or should be an employee
ƒ Is provided with tools and equipment
of a company. Those factors include but are not
ƒ Has duties which are dependent on the employer
limited to:
ƒ Is paid a fixed salary
ƒ When, where and how the work is done. Is it done at
ƒ Is subject to the discipline of the employer
the employer’s place of business or does the
ƒ Is protected by labour legislation
independent contractor do the work at their own
An Independent Contractor varies as such, in that he / she:
place? Does the employer set the hours or can the
ƒ Is equal with and not subordinate to the employer independent contractor work whenever they want?
ƒ Performs specified work or a specific result Does the employer provide the tools or does the
ƒ Relationship is only terminated by breach, completion independent contractor use their own?

of the job or consent ƒ Is the employee required to complete company
ƒ Uses own tools and equipment training? Independent contractors usually don’t,
ƒ Hires own staff as they come with skills.
ƒ Is paid in accordance with hours worked or on ƒ Is the employee doing full-time, ongoing/continual
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commission work? Or is the independent contractor just doing