The Labour Consultancy.
THIS week, Cosatu consultant KENNETH CREAMER hits out at employers seeking to avoid new labour regulations by changing the status of their workers. Creamer is writing in his private capacity and the views expressed are not necessarily those of Cosatu's.
The side-step involves redefining employees as "independent contractors" in an attempt to place them out of the reach of labour legislation such as the Labour Relations Act (LRA) and Basic Conditions of Employment Bill.
Business Times reported last month that according to figures released by Hein van der Walt of the Confederation of Employers of SA - a leading proponent of this dubious side-stepping jig - more than 150 000 employees at over 3 000 companies have already had the misfortune of being "redefined".
The bended knee involves employer organisations pleadong with government for increased labour market flexibility and efforts by individual employers to gain exemption from basic labour standards.
Their argument is that companies are experiencing financial difficulties as they find labour laws too onerous.
Those who attempt to classify their employees as independent contractors are likely to find that in addition to making them legally vulnerable, the suggestion is ultimately counter-productive.
Even though independent contractors are excluded from the definition of employment in both the LRA and the Basic Conditions of Employment Bill, this exclusion applies only to bona fide independent contractors like plumbers or electricians, or entrepreneurs who establish a business which performs a service to the general public.
Legal opinion is unequivocal that in deciding whether someone is an employee or an independent contractor, "substance must take precedence over form".
Employers are not permitted to circumvent their statutory obligations by simply labelling employees independent contractors. This position was reaffirmed in April this year by Labour Court Judge Ray Zondo in a case between Free State district surgeons and the health authorities. The court made use of a "dominant impression test" to show it was correct to include part-time surgeons under the LRA's definition of employees and that they were entitled to all of the law's protections.
In terms of the court's test, an employee is distinguishable from an independent contractor in that he or she:
The law's definition of an "employee" is relevant both to the application of the LRA and the Basic Conditions of Employment Bill. Indeed, the Bill would allow the minister to extend the application of minimum conditions to persons not defined as employees.
Employers who try to side-step the law are likely to be taken to court by disgruntled staff members and they will step into the very cauldron of labour unrest which the laws that they are trying to avoid were designed to prevent.
Employers who are approaching government on bended knee wish either to be exempted from the law, or for it to include mechanisms that will allow for a lowering of basic conditions by agreement with employees.
The draft Basic Conditions of Employment Bill provides for the downward variation of basic conditions through the granting of ministerial exemptions and, in certain circumstances, by agreement.
The exemptions mechanism will ensure a degree of flexibility in the application of basic labour standards. It is important, though, that this flexibility is properly regulated. In order to avoid abuse of the system, the Act should only allow the minister to grant a firm an exemption where it can show that an exemption is needed for economic survival. Such exemptions should only be temporary. Unions must be notified of any exemption application and should have the right to make representation on the matter.
If employers are successful in their attempts to win the right to downward variation by agreement, it seems inevitable that employees should prepare themselves for a sharp kick in the teeth.
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