Labour Law Question

[japie_die_skapie]

Person A currently employed through a labour broker (company M) as a "fixed term contractor" (according to the the company's human resources definition) at company A. His contract gets renewed every year and he has been working at company A now for 5 years.

My questions are :
1) Is he considered a "employee" according to the labour law?
2) Should he get paid leave & sick leave from company A?
3) Should he get paid on public holidays?
4) Should he get medical aid & pension contributions?
5) Should he be eligible for bonuses & 13th cheques?
6) What other benefits should he be getting?
7) Should these benefits come from Company A or Company M?

Any help in this regard will be appreciated and if you can back it up with references to the labour law, it would be even better.

 

[japie_die_skapie]

I think I answered the first question from the labour law :

"10. PRESUMPTION AS TO WHO IS AN EMPLOYEE : SECTION 83A

10.1 A person who works for, or provides services to, another person is presumed to be an employee if –

(a) his or her manner or hours of work are subject to control or direction;
(b) he or she forms part of the employer’s organisation;
(c) he or she has worked for the other person for at least 40 hours per month over the previous three months;
(d) he or she is economically dependant on the other person;
(e) he or she is provided with his or her tools or work equipment; or
(f) he or she only works for, or renders service to, one person.

10.2 If one of these factors is present, the person is presumed to be an employee until the employer proves that he or she is not. "

So, that would mean that he is an employee of Company A?

 

[waynegohl]

we need a thread for these kinda questions, i would be on there all the time.

 

[quovadis]

He is an employee of the Labour Broker and not Company A. If you were a private person and contracted yourself to Company A then you would be seen as employee after an extended period.

The perks/benefits in this case would be only available from the Labour Broker.

The person is a full time employee of the LAbour Broker and the job is to be contracted to company A,B,C,D or just A - it's irrelevant if its 1 or many.

 

[japie_die_skapie]

I see where you are coming from, but according to the definition of an employee, it could be argued that he could be seen as an employee of Company A.

1) His hours is under control of Company A.
2) He forms part of Company A's organization.
3) He has worked 160 hours per month for the last 5 years at Company A.
4) He is economically dependant on renumeration from Company A.
5) He is provided by equipment by Company A.
6) He only works at Company A.

Whereas for Company M:

1) They are not in control of his hours.
2) He doesn't have a role in the organisation.
3) He hasn't worked at Company M at all in the last 5 years.
4) Although he received his salary from Company M, he is dependant on renumeration from Company A through Company M.
5) He doesn't receive any equipment from Company M.
6) He works only at Company A.

I am open for discussion on this point and any and all views.

 

[japie_die_skapie]

And if you were and independant contractor, you would not be seen as an employee.
Independant contractors are specifically excluded from the definition of an employee in the labour law.

 

[quovadis]

My argument is this... Person A has entered into a contract with Company M (The labour broker) and Company A has entered into a contract agreement with Company M which results in Person A providing services to Company A on behalf of Company M.

The terms of your contract with Company M would be a fixed term contract (of 'x' months or years) and probably correlates to the agreement between the broker and their client.

As you are employed and remunerated by Company M and your job description is to assist and provide services to Company A subject to Company A's management and discretion you are in fact employed by Company M and your benefits and paid leave etc should be discussed with your current employer who would be Company M subject to the contents and agreements in your contract of employment with Company M. Company A has as such never entered into any form of employment contract or agreement with Person A.

It must also be stated that if you earn approximately R10,000 per month or more you fall outside of the Basic Conditions of Employment act and thus the definition of an employee based on this act would be void.

 

[japie_die_skapie]

It must also be stated that if you earn approximately R10,000 per month or more you fall outside of the Basic Conditions of Employment act and thus the definition of an employee based on this act would be void.

"Application of this Act
3. (1) This Act applies to all employees and employers except—
(a) members of the National Defence Force, the National Intelligence Agency
and the South African Secret Service; and
(b) unpaid volunteers working for an organisation serving a charitable purpose.
(2) This Act applies to persons undergoing vocational training except to the extent
that any term or condition of their employment is regulated by the provisions of any
other law.
(3) This Act, except section 41, does not apply to persons employed on vessels at sea
in respect of which the Merchant Shipping Act, 1951 (Act No. 57 of 1951), applies
except to the extent provided for in a sectoral determination."

The only part of the act that doesn't apply to people earning more than a certain amount is the section on working hours.

"The Basic Conditions of Employment Act applies to all employers and workers, but not -members of the -

* National Defence Force,
* National Intelligence Agency, or
* South African Secret Service; or
* unpaid volunteers working for charity.

The section of the Act that regulate working hours does not apply to:

* workers in senior management
* sales staff who travel and regulate their own working hours
* workers who work less than 24 hours in a month
* workers who earn more than R115 572 per year
* workers engaged in emergency work are excluded from certain provisions.

The provisions for annual leave do not apply to -

* workers who work less than 24 hours a month
* leave over and above that provided for by the Act"

 

[MielieSpoor]

My argument is this... Person A has entered into a contract with Company M (The labour broker) and Company A has entered into a contract agreement with Company M which results in Person A providing services to Company A on behalf of Company M.

The terms of your contract with Company M would be a fixed term contract (of 'x' months or years) and probably correlates to the agreement between the broker and their client.

As you are employed and remunerated by Company M and your job description is to assist and provide services to Company A subject to Company A's management and discretion you are in fact employed by Company M and your benefits and paid leave etc should be discussed with your current employer who would be Company M subject to the contents and agreements in your contract of employment with Company M. Company A has as such never entered into any form of employment contract or agreement with Person A.

It must also be stated that if you earn approximately R10,000 per month or more you fall outside of the Basic Conditions of Employment act and thus the definition of an employee based on this act would be void.

What he said.

Why don't you just oranise with Company A for a fulltime job for you? Then you simply resign from Company M and work for Company A? Company M can't restrict you if nothing has been stated in the contract between Company A and Company M.

 

[japie_die_skapie]

What he said.

Why don't you just oranise with Company A for a fulltime job for you? Then you simply resign from Company M and work for Company A? Company M can't restrict you if nothing has been stated in the contract between Company A and Company M.

It specifically states in the contract between Company A and Company M that Company A may not employ Person A. Person A is already being paid by Company A for Public Holidays, so for the same argument, it should count towards annual leave, sick leave etc.

 

[japie_die_skapie]

OK, so it turn out you were right. Person A is nothing more than a printer to Company A. Company M is responsible for paying benefits to Person A.

Now, when Person A approached Company M, they first said that Consultants aren't supposed to get benefits, then said that the benefits are already included in the hourly rate (cost to company), which isn't true. What can Person A do to prove this?

 

[Tulip Labour Relations]

Hi

If I may, I would like to suggest something. Labour Brokers usually issue a contract whereby the person contracts thru them as an independent contractor. If this is the case the Brokers quote the companies and then forward the work to the contractors.

Most even do the HR administration on behalf of the contractor (for a fee).

The point is that if the contract states contractor you are not employed you are using an administrative company to administer your services to third parties. All the benefits are paid out of your own contracting rate and you are not assured of work.

If however there is no contract or the contract does not specifically state the required exclusions and independent contracting clauses. Then you have a case.

The company must provide you with a full payslip under law which will show all deductions and benefit accumulations.

If it will help I can have a look at the contracts to determine what the actual status of employment is and then outline the legal requirements from the company to the employee and/or independent contractor.

Thanks
Nire

 

[thatdamnJoe]

It specifically states in the contract between Company A and Company M that Company A may not employ Person A. Person A is already being paid by Company A for Public Holidays, so for the same argument, it should count towards annual leave, sick leave etc.

Is this a restraint-of-trade type of clause? If not, resign from company M, that contract then falls away, and then join company A.

 

[metalcore]

we need a thread for these kinda questions, i would be on there all the time.

+1

I tried suggesting a legal advice section on this forum a while ago, I had such a section in mind because I had lots of labour law related questions I wanted answered. Unfortunately I was shot down.

The problem I have is that the labour law seems to be more like "guidelines" than law, because companies can break a few laws and with a good lawyer still get out of it. It also seems that the law is unclear on many things.

Everyone gives a different answer and companies can still get away with a lot with a good lawyer who can talk around the law

 

[japie_die_skapie]

Hi

If I may, I would like to suggest something. Labour Brokers usually issue a contract whereby the person contracts thru them as an independent contractor. If this is the case the Brokers quote the companies and then forward the work to the contractors.

Most even do the HR administration on behalf of the contractor (for a fee).

The point is that if the contract states contractor you are not employed you are using an administrative company to administer your services to third parties. All the benefits are paid out of your own contracting rate and you are not assured of work.

If however there is no contract or the contract does not specifically state the required exclusions and independent contracting clauses. Then you have a case.

The company must provide you with a full payslip under law which will show all deductions and benefit accumulations.

If it will help I can have a look at the contracts to determine what the actual status of employment is and then outline the legal requirements from the company to the employee and/or independent contractor.

Thanks
Nire

Person A does get monthly payslips stating all deductions, but not benefit accumulations. Person A's contract states that his position is contractor, but it also states that he should get paid annual leave, sick leave etc.

It also states a total cost to company monthly salary equal to 160 * the agreed hourly rate. Company M then requires Person A to work 1920 hours per year (48 weeks), the other weeks are to be taken as leave / sick leave. This is where the problem comes in. The labour law states that the monthly salary should be equal to 4 and 1/3 the weekly remuneration. As Person A works 40 hours a week, the monthly salary should be equal to 173.2 * the hourly rate (which would account for the paid annual leave).

My question is : Does Person A have a case asking for it to be 173.2 hours or should he have raised the issue before he signed the contract.

 

[japie_die_skapie]

Is this a restraint-of-trade type of clause? If not, resign from company M, that contract then falls away, and then join company A.

It doesn't seem to be a restraint-of-trade clause as it doesn't affect Person A personally. It only affect Company A. How long after resigning would Company A be able to employ Person A without triggering the penalty clause in the contract.