Parties to an Employment Contract

Labour law is about an employer and an employee. These are essentially the main parties to an employment relationship. This whole book explores the relationship between these parties to the employment relationship. It assesses the various laws behind the relationship. Noteworthy, it is not easy to define whether one is an employee or something else. Equally so, it may also be difficult to pinpoint who an employer is if one considers the existence of labour broking relationships.

In this section, we look at what constitutes an employee and the various tests that have been buttressed by the courts in showing whether an employer-employee relationship exists between parties. We also look at the relevance of being an employee or employer in labour law and in this respect, we note that once a person, juristic or otherwise, is deemed an employer or an employee certain duties flow from this relationship.

An Employee

An employee is defined under Section 1 of the Labour Act (Chapter 28.01) specifically as follows:

“employee” means any person who performs work or services for another person for remuneration or reward on such terms and conditions as agreed upon by the parties or as provided for in this Act, and includes a person performing work or services for another person—

(a) in circumstances where even if the person performing the work or services supplies his own tools or works under flexible conditions of service, the hirer provides the substantial investment in or assumes the substantial risk of the undertaking; or

(b) in any other circumstances that more closely resemble the relationship between an employee and employer than that between an independent contractor and hirer of services; (Own Emphasis).

From the definition above, an employee must perform work or service for the benefit of getting remuneration. The employee may even supply his tools.[1] Section 1 (a) includes those people who work under “flexible conditions of service”. We submit that such flexible work conditions include arrangements where employees work from home, flexible working hours for example where one starts work at 9 am rather than 8 am, moving from full-time to part-time work amongst a host of other arrangements that the employer may have with his or her employees.

Section 1(b) specifically excludes an independent contractor and hirer of services. This is important because an independent contractor may look like an employee in a lot of respects and if one is not careful the unfortunate conclusion may be that an independent contractor arrangement is an employment relationship under the purview of the Labour Act. As mentioned above, the distinction between an employee and an independent contractor is important in that legal duties flow from being an employee which duties do not apply when one is an independent contractor. Equally so, the jurisdiction of Designated Agents, Labour Officers, and the Labour Court is excluded once an independent contractor relationship is in existence.[2]

Alive to the fact that it is not always easy to distinguish between an employee and an independent contractor our courts have devised various tests to be applied to ascertain the kind of relationship in existence. The three major tests are discussed below.

Supervision and Control Test

This test looks at whether an individual is under the direct control and supervision of another. If there is no such supervision and control, there is a greater likelihood that the individual is an independent contractor. Following the same reasoning, if an individual is under the supervision and control of another, an employer-employee relationship is in existence. Control, in this case, envisages a situation where one must abide by the instructions not only in the things, he or she must do but, in the time, and way he or she must do them.[3] The presence of supervision and control is seen as an imperative component of the employer-employee relationship such that open defiance of an employer’s lawful orders constitutes a dismissible offence.[4].

In the South African case of Stein v Rising Tide Productions (CC),[5] the court acknowledged that whilst supervision and control are important aspects of the employer-employee relationship, the two aspects are not exhaustive. As a result of this observation by the court in various jurisdictions other tests have been devised to determine if an employment relationship exists. These tests include the unpopular organisation test and the dominant impression tests discussed hereunder.

The Organisation Test

The organisation test connects an individual to an organisation and uses this nexus to determine if an employment relationship exists or not. If an individual is connected to an organisation that they are rendering a service to, an employment relationship is likely to be deduced. On the other hand, if this relationship is remote, an independent contractor arrangement is likely to be obtaining. This the South African case of R v AMCA Services Ltd[6] this test was rejected for being vague. We submit that the court’s observation was correct because there is more to being an employee than being part and parcel of an entity. The widely accepted test, in Zimbabwe and in South Africa has been the dominant impression test discussed hereunder.

The Dominant Impression Test

The widely used test for determining whether an employment relationship is in existence is the dominant impression test. The test tends to borrow from all the tests discussed above.[7] It posits that if there is supervision and control of a person there is a greater likelihood that an employment relationship is in existence. Equally so, it also looks at the existence of an organisation. In this regard, the fact that the individual is part and parcel of an organisation points to the greater likelihood of an employment relationship.[8] There is no single factor that should be used in determining whether there is an employment relationship.

The test emphasises what was said by the Supreme Court in Masango & Others v Kenneth & Another (SC 307/13) where the court remarked:

 “…. what the parties call each other in such a contractual relationship, or what they perceive their relationship to be is not decisive and may actually be irrelevant.  The court looks at the totality of the evidence and all the circumstances to determine the true nature of the relationship.”

In essence, all the evidence presented to the court will be assessed to determine the type of relationship existing between the parties. Unlike in all the tests discussed thus far, one single factor is not decisive. Factors that a court may consider include nature of rewarding the person, whether it was by way of a commission or a wage. The nature of the business and how it was conducted.

We submit that not all industries can accommodate independent contractors. As an example, it may be practical to have an independent contractor in insurance sales compared to the mining sector this is because, an insurance salesperson can easily work independent of the employer whereas a miner may need to be constantly under the supervision of the employer. In considering all the factors surrounding the relationship, a court is compelled to look at the totality of evidence presented to it.

The Supreme Court in Masango & Others v Kenneth & Another (SC 307/13) looked at factors such as the fact the person was part of an organisation but the degree of control and pointed to the existence of an independent contractor relationship. The fact that the person called himself an employee did not change the fact. The totality of the evidence pointed to the existence of an independent contractor relationship.

Duties applicable to an employer-employee relationship

The presence of an employer-employee relationship comes with legal consequences. One of the immediate consequences is that the labour laws of the country will govern the relationship. In addition, several duties and responsibilities accrue to an employment relationship. These duties apply to both an employer and an employee. Some of the duties are statutory whereas others accrue from the common law.

Generally, every party to an employment relationship is under a common law and statutory duty to respect and abide by his or her contract of the employment. This duty flows from the common law and equally applies to the employer. At common law, the sanctity of the contract of employment is something that has been respected since Roman times. This sanctity of the contract is aptly explained in Printing and Numerical Registering Co v Sampson (1875) LR 19 as follows:

“If there is one thing more than another that public policy requires, it is that man of full age and competent understanding shall have the utmost liberty of contracting and that their contracts, when entered into freely and voluntarily, shall be held sacred and shall be enforced by courts of justice. Therefore, you have this paramount public policy to consider — that the courts are not likely to interfere with this freedom of contract.”

Further, in Magodora & Others v CARE International Zimbabwe (SC 191/13) the court remarked:

“It is not open to the courts to rewrite a contract entered into between the parties or to excuse any of them from the consequences of the contract that they have freely and voluntarily accepted, even if they are shown to be onerous or oppressive. This is so as a matter of public policy.”

It follows therefore that public policy demands that once an employer-employee relationship is established the contract between the parties must be respected. The positions remain intact unless the contract is void or voidable on legal grounds.

The relevance of being an employee

As indicated above, several duties accrue to an employee. The duty of fidelity is one of the fundamental duties that an employee owes an employer from the moment an employment relationship comes into existence. This forms the primary basis of all the other duties to be discussed herein. Without being loyal to the employer an employee cannot further the interests of the employer. Any act or omission by an employee that breaches the employee’s duty of loyalty or fidelity repudiates a contract of employment giving the employer a right to follow the necessary procedure to dismiss the employer.

Respect the employer’s lawful authority

This is a fundamental duty an employee has regarding his or her employer. It is a duty of subordination. Without this legal duty, there is no employment contract. The supervision and control test discussed above is the basis for this duty.[9] It emanates from the common law. So fundamental is this duty that it has been codified, in one form or the other in several codes of conduct applying in Zimbabwe. In this respect, the phrase “willful disobedience to a lawful order given by the employer” is a quite common offence designated in several codes of conduct.

 In NEC Catering Industry v Kundeya & Others (SC 35 of 2016) theSupreme Court argued that the refusal to follow the employer’s lawful instructions can render an employee incapable of performing his or her employer’s work thereby repudiating the contract of employment. The case also points to the fact that when the disobedience was not in error nor on the spur of the moment, but carefully considered and relentless over a long period of time the employer may be justified in dismissing the employee.[10]

Matereke v CT Bowring & Associates (Pvt) Ltd 1987 (1) ZLR 206 established the test to be applied when an employee is alleged to be disobedient. Here the court established:

“… wilful disobedience or wilful misconduct, the words in my view connote a deliberate and serious refusal to obey. Knowledge and deliberateness must be present. Disobedience must be intentional and not the result of mistake or inadvertence. It must be disobedience in a serious degree, and not trivial – not simply an unconsidered reaction in a moment of excitement. It must be such disobedience as to be likely to undermine the relationship between the employer and the employee, going to the very root of the contract of employment.”

Respecting the employer’s authority, therefore, is a cardinal duty that every employee owes the employer. Failure to respect this authority vitiates the employer-employee relationship giving the employer the discretion to end the employment marriage.

Placing personal services at the disposal of the employer

Closely related to the employee’s duty to follow the employer’s instructions is the duty to be available for work. Primarily, an employee is in contract with the employer so that he can be provided work in return for a wage or a salary.[11] Failure to put the employees’ services at the disposal of the employer also constitutes a fundamental breach of the employment contract. So fundamental is this duty that section 12A(6)(a) authorises an employer to deduct money equivalent to the days that an employee is not available for work.[12]

In addition to this provision, absenteeism from work is also codified in various codes of conduct as an offence that can warrant the dismissal of the employee. The National Code of Conduct (Statutory Instrument 15 of 2006) prescribes that “absence from work for a period of five or more working days without leave or reasonable cause in a year”[13] is a dismissible offence. This position in terms of the South African law is not different, the Labour Appeal Court of South Africa remarked in Wyeth SA (Pty) Ltd v Manqele and Others[14] that:

“At common law an employee in a contract of employment commits a breach thereof he reneges on his duty of placing his personal service at the disposal of the employer. The employer on the other hand breaches the contract of employment if he reneges on   his   undertaking   to   pay   the   salary   or   wages   agreed   in consideration for services rendered.”

We submit that, once an employee puts his or services at the disposal of the employer, it becomes the duty of the employer to utilize those services. When an employer fails to utilize the services correctly put at his or her disposal by an employee, no liability accrues to the employee in compensation forthe employer’s failure.

Competence

Not only should an employee be available for work. He or she should work competently. The employee should have the capacity to render the services competently. It is an offence in almost every code of conduct and indeed in terms of the national code of conduct to mislead an employer that one holds a certain skill when such exist in an employee’s skills set.[15] It is a dismissible offence for an employee to be incompetent.

An Employer

Defining an employer is arguably less controversial compared to defining an employee. The Labour Act defines an employer as follows:

“employer” means any person whatsoever who employs or provides work for another person and remunerates or expressly or tacitly undertakes to remunerate him, and includes—

(a) the manager, agent or representative of such person who is in charge or control of the work upon which such other person is employed; and

(b) the judicial manager of such person appointed in terms of the Companies Act [Chapter 24:03];

(c) the liquidator or trustee of the insolvent estate of such person, if authorized to carry on the business of such person by—

(i) the creditors; or

(ii) in the absence of any instructions given by the creditors, the Master of the High Court.

(d) the executor of the deceased estate of such person, authorized to carry on the business of such person by the Master of the High Court (e) the curator of such person who is a patient as defined in the Mental Health Act [Chapter 15:12] (No. 15 of 1996 authorized to carry on the business of such person in terms of section 88 of that Act;[16]

An employer is a person, whether juristic or a natural person and such a person should provide work to an employee and undertakes to pay such an employee. From the definition in Section 1 of the Labour Act and as outlined above one can see the inclusion of several persons in the definition of an employer. Except for managers, agents, or representatives of an employer the rest for the persons outlined under the definition of an employer are not normally seen in the ordinary course of doing business.

We submit that the words “manager, agent or representative of such person” are free from ambiguity or uncertainty. A manager is anyone who works on behalf of an employer. A manager must mainly supervise lower-level employees. An agent or representative is anyone who operates in the stead of the employer. This can be any person, juristic or natural.

In our respectful view, there was no need for the Labour Act to specify that a “judicial manager”, “liquidator or trustee of the insolvent estate” and “the executor of the deceased estate of such person” are all considered employers because all these persons act as representatives of the employer in their various circumstances and capacities. These persons, by the operation of the law, step into the shoes of the employer and become de facto employers.

Whilst the definition of an employer is straightforward, problems often arise when one seeks to identify the employer in a labour broking arrangement. Labour broking involves three parties, there is the labour broker, who provides labour to a client and the labour. The labour then works for the client, but all conditions of services are managed by the labour broker. The labour has a contract of employment with the broker and not with the client. In the absence of a written agreement, it can be difficult to ascertain who the employer is under these circumstances.

A dispute over the identity of the employer arose in Yoramu and Ors v PG[17]. The relevant facts of the dispute are that Yoramu, and other employees were employed at a farm which was expropriated for resettlement. The “employees” did not leave the farm after the expropriation. They argued that the new owners of the land became their new employers. The Constitutional Court, among other findings, ruled that there was no transfer of an undertaking following the acquisition of the farm and its subsequent allocation to a number of beneficiaries. The new beneficiaries were not the employers of the employees. Consequently, the contracts of the employees were deemed terminated upon the expropriation of the land from their former employer. The Yoramu case, thus shows and clearly demonstrates how it may be difficult to determine who an employer is in certain circumstances.

The relevance of being an employer

Once a person, juristic or natural, has been identified as the employer, it follows that several legal obligations flow from this designation. In this section, we look at these obligations. The duties of the employer are also from the common law and the majority have since been codified and have been incorporated into the Labour Act. The statutory duties of the employer now include the right not to commit unfair labour practices.[18] Breach of these duties is tantamount to a repudiation of a contract of employment. The employee will exercise the choice between quitting the job and claiming damages or staying on the job and remedying the breach.

The duty to pay a lawful wage and salary

Every employer is under a statutory duty to pay a lawful wage or salary. The Labour Act has heavily regulated this duty. Controls have been put in place to protect employees from getting wages and salaries which are beyond the specified minimums for every employee.

It is unlawful to pay an employee a salary or wage which is lower than the minimum specified for such an employee.[19] It is also illegal to terminate an employee’s contract simply because the employer cannot pay the lawful minimum wage.[20] The law also makes it unlawful to withhold remuneration as a result of a lockout.[21] These measures were put in place because the legislature was alive to the unequal bargaining power between employers as the owners of the means of production and the employees who are always subordinate to the employer. That unequal bargaining power is therefore balanced through minimum wage laws.

The protection afforded to employees as far as the minimum wage payment has been strengthened by most Collective Bargaining Agreements (CBAs) in Zimbabwe. Employers are also protected from paying the minimum wages if they are unable to do so but this does not happen casually. The majority of CBAs in Zimbabwe allow employers to apply for exemption from paying the minimum stipulated wages. The exemption is not granted carelessly. An employer has to show why they cannot comply with the minimum wages stipulated for the industry. Evidence of incapacity to comply must be presented before the NEC. The evidence can include financial statements and production reports to mention a few. The NEC is under an obligation to fully scrutinize the evidence presented by the employer before granting the exemption if the circumstances so allow. In our view, the granting of exemptions by the NEC thus affords legal protection to employers who cannot afford to pay the minimum wage. We submit also that this protection may qualify as special measures to avoid retrenchment in terms of section 12D of the Act. It prevents the employer from shutting down completely due to failure to pay wages and salaries which protects employees from retrenchment.

Safe working environment

Every employer is also under a statutory obligation to provide a safe working environment. Morally no employer should allow their employee to be injured. The Labour Act also codifies this duty. Under section 6 of the Labour Act (Chapter 28.01) employers are precluded from requiring employees to work in unsafe environments. The employer is also required to provide personal protective equipment (PEE) at no cost to the employee.[22] The works council is endowed with the power to promote safe and healthy establishments.[23]

If an employer correctly provides the employee with the necessary PPE, the relevant training and supervision, such an employer may not be held liable for the harm that the employee may face in the course of doing his or her duty. The doctrine of voluntary assumption of risk will apply to such an employee. In terms of this doctrine, a party that exposes themselves to danger, fully aware that the danger exists will not blame an employer for the harm that ensues. For this to apply, the employee must have directed his or her will towards the danger to his or her prejudice. Because of the application of this doctrine, an employee may not sue the employer for the injury they face having willingly endangered themselves. On the other hand, if the employer does not comply with the statutory obligations they must comply with, which act or omission results in the injury of the employee, the employee may sue the employer for damages.

Duty not to unlawfully dismiss an employee

Every employer is now under a statutory duty to ensure that the correct procedure is followed when separating with an employee. Like with any other duties discussed above, this duty is now emphasized in the Act. A perusal of section 12B of the Act shows the extent to which this duty has been prescribed by the legislature. The duty involves using a code of conduct when dismissing an employee.[24] The employer is also proscribed from making a working environment intolerable on the part of the employee.[25] The duty extends to terminating a fixed-term contract and replacing the dismissed employee when the dismissed employee had the legitimate expectation of being re-engaged.[26]

If an employer does not separate with an employee in accordance with the Labour Act, the resultant dismissal or termination may be held to be unlawful and void. Such was the case in NMB Bank Limited v Ashton Kupara[27] where a purported termination on notice had happened outside the confines of the Labour Act (Chapter 28.01). The court, in this case, remarked:

“Termination on notice by the employer outside the ambit of Section 12 (4a) of the Act is prohibited per the clear wording of the provision. Any purported termination notice which fails to comply with the provision is, therefore, a nullity. Choga’s case is authority for the ruling that waiver does not arise in the circumstances of this case where the terminations of employment amounted to a nullity.”

It is, therefore, the duty of every employer to ensure that every employee is not unlawfully dismissed or terminated. Breach of this statutory duty may result in the reinstatement of an employee without loss of pay or payment of damages.[28]

Conclusion

The presence of an employment relationship is not always easy to determine. The courts have had to outline various tests as a guide to show whether an independent contractor relationship or an employment contract is in existence. The most user-friendly guide is the dominant impression test. It takes into consideration the totality of the evidence presented before a court to ascertain if an employment relationship is in existence. It has also been shown that the presence of an employment relationship comes with attendant duties and responsibilities. The most fundamental duty between the parties is that they should respect the agreement they voluntarily entered into. The employee has a duty to act in a manner that furthers the interests of the employer. The employer has a duty to pay for the services rendered, creating a healthy and safe working environment as well as not to unfairly dismiss an employee.


[1]              Section 1 (a) of the Labour Act Chapter 28.01.

[2]              Sithembiso Ndlovu N.O v Casmyn Football Club (LC/MT/22/22).

[3]              Blismas v Dardagan 1950 SR 234.

[4]              National Employment Council for the Catering Industry v Richard Kundeya (SC 35/2016).

[5]              Stein v Rising Tide Productions (CC) 2002 23 ILJ 2017 (C) 2018D-E (SA case number).

[6]              1962 4 SA 537 (A) 540H (SA case number).

[7]              Diedericks L “The Employment Status of Magistrates in South Africa and the Concept of Judicial Independence” PER / PELJ 2017(20) – DOI http://dx.doi.org/10.17159/1727-3781/2017/v20i0a1475.

[8]              Diedericks L “The Employment Status of Magistrates in South Africa and the Concept of Judicial Independence” PER / PELJ 2017(20) – DOI http://dx.doi.org/10.17159/1727-3781/2017/v20i0a1475.

[9]              See NEC Catering Industry v Kundeya & Others (SC 35 of 2016).

[10]            See NEC Catering Industry v Kundeya & Others (SC 35 of 2016)

[11]            See the definition of an employee in terms of Section 1 of the Labour Act (Chapter 28.01 as amended).

[12]            The section reads:  No deduction or set-off of any description shall be made from any remuneration except—

(a) where an employee is absent from work on days other than industrial holidays or days of leave to which he is entitled, the proportionate amount of his remuneration only for the period of such absence.

[13]            See Section 4 of the Statutory Instrument 15 of 2006.

[14]             Wyeth SA (Pty) Ltd v Manqele and Others (JA 50/03) [2005] ZALAC 1).

[15]            See Section 4 of the Statutory Instrument 15 of 2006.

[16]            Section 1 of the Labour Act (Chapter 28.01).

[17]            CCZ 2 – 2016.

[18]            Section 8 of the Labour Act (Chapter 28.01).

[19]            Section 6(1)(a) of the Labour Act (Chapter 28.01).

[20]            See Section 21 of the Labour Act (Chapter 28.01) which reads: (1) No employer shall, otherwise than in terms of an exemption granted to him in terms of subsection (2), terminate the services of an employee solely on the ground of a requirement to pay him a minimum wage in terms of a minimum wage notice.

[21]            See Section 105 of the Labour Act (Chapter 28.01).

[22]            See Section 12A(2)(c) of the Labour Act (Chapter 28.01).

[23]            See Section 25A(4)(c) of the Labour Act (Chapter 28.01).

[24]            See section 12B of the Labour Act (Chapter 28.01).

[25]            See section 12B(3)(a) of the Labour Act (Chapter 28.01).

[26]            See section 12B(3)(b) of the Labour Act (Chapter 28.01).

[27]             NMB Bank Limited v Ashton Kupara and 25 Others LC/H/62/22.

[28]            See section 89(2)(c)(iii) of the Labour Act (Chapter 28.01).

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