Employer and Contractor - Labour Law - Chiba Attorneys

Employee Vs Independent Contractor

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The employer

In terms of the Basic conditions of Employment Act the difference is as follows:

Employment contract: The contract (employee/employer relationship) is a Contract of Service ‐ the employee undertakes to render his services (as opposed to an agreement to undertake and complete specific tasks) to the employer, either on an indefinite or fixed term basis. In return, the employer undertakes to pay the employee for those services.

Employer and Contractor - Labour Law - Chiba Attorneys

Independent Contractor

contractor undertakes to perform a specific service or task. Unless otherwise agreed, the contractor will be paid upon completion of the specific service or task

IN TERMS OF THE LABOUR RELATIONS ACT 66 of 1995

With an Employment Contract (LOCATIO CONDITIO OPERARUM) the Object:

  1. Is the rendering of personal services between employer and employee.
  2. The Employee renders services at the behest of the employer.
  3. The Employer may decide whether it wishes to have the employee render services.
  4. The Employee must obey lawful instructions in regards with work and the manner it must be done.
  5. The Contract Terminates by the death of the employee/Employer.
  6. Alternatively, the contract terminates on completion of agreed period or is terminated in terms of schedule 8 of the Labour Relations Act, Act 66 of 1995 as amended.

With a contract of Work / Result (LOCATIO CONDITIO OPPERIS) the Object is:

    1. The production of a certain specified service or specified result.
    2. An Independent contractor is not obliged to perform work personally unless so agreed.
    3. The Contractor is Bound to produce certain work or a result within specified period.
    4. The Contractor is not obliged to obey instructions regarding manner in which task is to be performed.
    5. The Contract is not terminated by death of contractor.
    6. The Contract is termination on completion.

When our courts/adjudication bodies are uncertain if a person is an independent contractor or an employee, section 200A of the Labour Relations Act, Act 66 of 1995 is helpful which reads:

Subsection 1 of Section 200A notes that Until the contrary is proved, a person, who works for or renders services to any other person, is presumed, regardless of the form of the contract, 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.
  2. the persons hours of work are subject to the control or direction of another person.
  3. in the case of a person who works for an organisation,
  4. the person forms part of that organisation.
  5. the person has worked for that other person for an average of at least 40 hours per month over the last three months.
  6. the person is economically dependent on the other person for whom he or she works or renders services.
  7. the person is provided with tools of trade or work equipment by the other person; or
  8. the person only works for or renders services to one person.

Subsection (1) of Section 200A of the Labour Relation Act does not Automatically 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 from time to time.

 

Force Majeure - Chiba Attorneys

Force Majeure

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What is Force Majeure event?

A Force Majeure event is the occurrence of an unforeseen event or circumstance that is beyond the contracting parties control which prevents or makes it impossible for a party to perform its contractual obligations under the contract

Some examples of a Force Majeure

  • War, hostilities, invasion, act of foreign enemies
  • Civil war, riot, rebellion and revolution
  • Currency and trade restriction
  • Act of authority whether lawful or unlawful
  • Compliance with any law or governmental order
  • Plague, epidemic, natural disaster or extreme natural event
  • General labour disturbance such as boycott, strike and lock-out

Why the need for a Force Majeure clause?

A force majeure clause in necessary to protect parties outside of normal business risk. It also suspends performance and avoids a breach of contract.

Standard form construction contracts

FIDIC 1999 & 2017

CNC FIDIC 2017 - Chiba Attorneys_

 

FIDIC 1999 & 2017 encompasses FOUR CRITERIA in order to establish a force majeure:

  1. If an event is beyond a Party’s control;
  2. Which such party could not reasonably have provided against before entering into the Contract;
  3. Which having arisen such party could not reasonably have avoided or overcome; and
  4. Which is not substantially attributable to the other Party.

Subsequently in the FIDIC 2017 version “Force Majeure” was replaced with “Exceptional Event”.

The definition and the non-exhaustive list of events or circumstances remained substantially the same.

JBCC May 2018

In JBCC, a Force Majeure is defined as an exceptional event or circumstance that:

JBCC - Contract Agreement - Chiba Attorneys

  1. Could not have been reasonably foreseen,
  2. Is beyond the control of the parties, and
  3. Could not reasonably have been avoided or overcome.

GCC

GICC - Contract agreement - Chiba Attorneys

  1. “Excepted Risks” means: risks of damage or physical loss or any other loss caused by or arising directly or indirectly as a result of the occurrence of certain events;
  2. War, invasion, act of foreign enemies, hostilities or warlike operations;
  3. Insurrection, rebellion, revolution, acts of terrorism or civil war;
  4. Mutiny, military uprising;
  5. Strike, riot, commotion, disorder, violent demonstrations;
  6. Epidemic, famine or plague;
  7. The design, specification or instruction of the Employer’s Agent, or defects in the materials supplied by the Employer for incorporation in the Work.

NEC 4

Clause 19 of NEC4 deals with prevention which states

NEC 4 - Engineering and construction contract - Chiba Attorneys

The event must be one that:

  1. Stops the Contractor from completing the whole of the works or completing the whole of the works by the date for planned Completion shown on the Accepted Programme;
  2. Neither party could prevent; and
  3. An experienced contractor would have judged at the contract date to have such a small chance of occurring it would have been unreasonable to have allowed for it.

Other aspects to consider

  1. Changes in Law;
  2. Suspension of the works;
  3. Release from Performance;
  4. Notification;
  5. Mitigation.

How can we find a way Forward

  1. Check your contractual provisions;
  2. Follow all the contractual processes;
  3. Attempt to agree a commercial solution;
  4. Compromise.
Employee vs Independent Contractor Explained - Chiba Attorneys

Employee vs Independent Contractor Explained

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Minimum Wages - Chiba Attorneys_

Minimum Wage

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Carol worked seven days a week and earned R15.20 an hour.  She was absolutely devasted when she realised that she was paid below the minimum wages according to the gazette. Lets bear in mind that carol is a single parent of four and looks after her ill mum who was recently diagnosed with cancer.

What are minimum wages?

It is the minimum sum payable to a worker for work performed or services rendered, within a given period (…) which may not be reduced either by individual or collective agreement (and) which is guaranteed by law.

The primary goal of any minimum wage policy is to increase the incomes of those at the very bottom of the wage scale through a distribution of national income. Low wages are a prime contributor to poverty and misery for large sections of the working class.

Wages - Labour Law - Chiba Attorneys

The National Minimum Wage Act

The National Minimum Wage Act empowers the National Minimum Wage Commission to assess and review the wage each year. This means that the wage is likely to be reviewed again in the coming years.

N.B South Africa’s new minimum wage which will take effect from 1 March 2020. The gazette states that the new national minimum wage is R20.76 – an increase of 3.8%. 

The gazette also outlines the minimum wage for workers in certain sectors.

This includes:

  • Farmworkers are entitled to a minimum wage of R18.68 per hour;
  • Domestic workers are entitled to a minimum wage of R15.57 per hour;
  • Workers employed on an expanded public works programme are entitled to a minimum wage of R11.42 per hour.