Please note that this pertains to South African Labour Relations and Best Practice requirements.
If you will remember, the second indicator of how to determine if the person is an employee is:
2). the person’s hours of work are subject to the control or direction of another person.
If there is a Contract or Letter of Appointment and the hours of work are stipulated therein, this is a really strong indicator that there is in fact an employment relationship between the employer and the person.
On the other hand, the lack of stipulated hours in a Contract does not necessarily mean that it is not a Contract of Employment. As soon as there is any kind of control or any indication that the person is required to work a specified number of hours within a specific period (per day, per week etc), this an indicator that the person is an employee as flexi-time working arrangements can also be present in an employment relationship.
The third indicator of how to determine if the person is an employee is:
3). in the case of a person who works for an organization, the person forms part of that organization.
This one on the face of it appears to be somewhat tricky. However it probably applies in respect of any employer that is in the Corporate arena. It would not apply to say someone who employs a domestic worker or a gardener, although having said that both the domestic worker and the gardener are obviously employees.
Let’s see if I can explain this a little more clearly. If a person does work for or supplies services to an employer, as part of their own business interests, they do not form part of the employer’s organization. So for example, I have my own business, it is a registered as (Pty) Ltd, I supply a service to other organizations, however I do not form part of that organization, but rather form part of my own organization.
So how does that make me different from an employee, who also provides a service as well? Well you see, apart from having a registered company of my own, I also have to be responsible for the risks and be accountable for issues such as poor performance, bad workmanship, incomplete work, price increases etc. In the instances where there is an employment relationship, the employer would be the one to be responsible for these risks and be accountable to their client – not the employee.
Next week I will continue with some of the other indicators.