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Independent Contractor vs Employee

Independent Contractor vs Employee

Employers often ask the following question: “What is the difference between an independent contractor and an employee?” (Read more about this topic here)

Definition of an employee

According to Section 213 of the Labour Relations Act (LRA) an employee is defined as:

  1. 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;
  2. any person who in any manner assists in carrying on or conducting the business of an employer.

Presumption as to who is an employee

Section 200A of the LRA also clarifies this position where the presumption as to who is an employee is explained. According to this section a person is presumed to be an employee if any one or more of the following factors are present:

  1. The manner in which the person works is subject to the control or direction of another person.
  1. The person’s hours of work are subject to the control or direction of another person.
  1. In the case of a person who works for an organisation, the person forms part of that organisation.
  1. The person has worked for that other person for an average of at least 40 hours per month over the last three months.
  1. The person is economically dependent on the other person for whom he or she works or renders services.
  1. The person is provided with tools of trade or work equipment by the other person.
  1. The person only work for or renders service to one person.

The abovementioned section does not apply to any person who earns in excess of the amount determined by the Minister, in terms of Section 6(3) of the Basic Conditions of Employment Act (BCEA).

A comparison between an employee and an independent contractor

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A case study

In the case Dyssel vs Media 24 (2014), the Commissioner found that Media 24 did not control the manner on how the applicant sold the newspapers. Media 24 also did not regulate and/or controlled his working hours and the applicant also worked for other employers. The applicant was not an employee and the termination of his contract with Media 24 was not regarded as an unfair dismissal.

Conclusion

Employers should take note of Section 200A when entering into contracts with employees and to be clear on whether it is an independent contractor or an employee.Have you struggled with this before? Tell us more about your story in the comments below!

Have you struggled with this before? Tell us more about your story in the comments below!

ABOUT THE AUTHOR

Lizca Samuels obtained her B.Proc.LLB degree form the University of Port Elizabeth. She completed her articles at Dietrich Attorneys and was admitted as an attorney in 2003. She joined SEESA Labour as a legal advisor in 2005, and was promoted to a SEESA Labour Senior Legal Advisor in 2008.

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