A client argued that his hairstylists do not fall under the definition of an employee and may only pay them commission or rent a chair fee for their services. The client provides his employees with a mirror and chair to serve their client base. He also provides hair products and equipment.
Section 200A of the Labour Relations Act provides definite guidelines to define an employee as, among others, economic dependency on the employer; providing the equipment to render a service and rendering service to only one employer are three of the definite guidelines provided by the Act.
The employees are indeed economically dependent on the employer for income, they use his equipment to earn income, and only earn income from services rendered under his supervision/employment. Although the employees regulate their own working hours and have their own client base, they are still employees of the employer. The employer will be obligated to pay at least two-thirds of the minimum wage to the employees before entering into an alternative commission agreement.
In the contrary to this, The National Bargaining Council for Hairdressing, under section 31 of their Collective Main Agreement, determines that if an employer and employee are both registered with the Council, based on the above, the employees may be registered under a rent a chair agreement (commission fee only) and will then be seen as independent contractors who can enter into a commission agreement which the Council approved.
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