Asides

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).

2,175 Views

Distinguishing between an independent contractor and a labour broking arrangement.

In this section, we discuss the fundamental differences between an independent contractor and an employee in a labour broking arrangement. The two concepts can be unclear. Without distinguishing between the two arrangements, it may be difficult for an employer to choose between the two arrangements. An employee may also not fully understand the legal repercussions that come with being in any of the two arrangements. The purpose of this section is therefore to demystify the two concepts to allow employers and employees an opportunity, at the very least, to understand the legal consequences of each arrangement. We also look at the contemporary position in terms of South African law. At the end of the discussion, it is recommended that the South African position that seeks to protect employees provided by a labour broker is recommended for the Zimbabwean labour law jurisdiction.

Defining the two arrangements

An independent contractor resembles an employee under the purview of the Act. The major difference is that an independent contractor is not under the control of the employer.[1] Control, in this case, envisages a situation where the employer oversees the employee’s work. In a proper employment relationship, the employer provides the employee with any work-related instructions. Per contra, in an independent contractor relationship, the employer does not regulate the time, and way the contractor must undertakes his or her tasks. The employer is mainly interested in the results. The independent contractor relationship does not result in the payment of a salary but fees or commissions.[2] Tests to determine if an employment relationship is in existence have already been discussed in the foregoing section.

On the other hand, a labour broking arrangement envisages three parties. There is the employer party (the labour broker) and the client, who receives the services of the employee(s). There is the employee(s) who is attached and employed by the labour broker. The client does not have a contract with the employee but with the labour broker.[3] All the conditions of service for the employee are managed by the labour broker.[4] The contract of employment between the employee and the labour broker basically follows the requirements of the Labour Act. The contract or service level agreement between the client and the labour broker who is the employer is unique. We attach in the precedents section a model contract for a labour broker and a client.

The Labour Act (Chapter 28.01) position

The Labour Act’s position is that an independent contractor is not an employee.[5] Labour law does not apply to independent contractors.[6] The non-application of labour law means that an employer who engages an independent contractor does not have to pay for such statutory contributions as a pension, NEC contributions and any other taxes that apply to persons who work as employees. A salary is also not payable to an independent contractor. On separation, terminal benefits applicable in labour law will not apply to an independent contractor.

On the contrary labour brokerage arrangements are recognised in our law. Persons provided under labour brokerage arrangements are employees recognised in terms of the Act. In its current form, the recognition of labour broking is found in case law[7] and in terms of the Labour Amendment Act, 2021. Because the Labour Act applies to employees under a labour brokerage arrangement, it is expected that pension, NEC contribution, union dues, and Pay as You Earn (PAYE) tax are deductible from an employee’s wage or salary. Terminal benefits will apply to an employee under a labour broker. The only aspect that is peculiar to an employee in a labour brokerage arrangement is that the employer is the labour broker and not the client. It is the labour broker that is responsible for the payment of wages and salaries as well as the payment of terminal benefits on separation.

Vicarious Liability

Generally, an employer is vicariously liable for the actions of the employees. What this means is that an employer may end up paying a person, damages for the injury or harm caused by his or her employees in the normal course of doing business. Damages may accrue to the employer even in circumstances where the employer was not at fault. The rationale behind vicarious liability was outlined in Mkhwananzi v Totamirepi & Anor ZWBHC 118 – 2016 in which the court accepted that by engaging in business, an employer may increase the risk of harm to others. The employer has a better financial capacity to compensate victims of harm than the employee. These two notions, therefore, justify vicarious liability, as a rule, to protect the public from the harm that employees belonging to an employer may cause.

On the contrary, vicarious liability does not apply when an independent contractor arrangement is in place. In Masango & Others v Kenneth & Another SC 41 – 2015 the Supreme Court explained this position in the following terms:

“The authorities cited above also re-state the principle that a principal is liable for the delict of his agent where such agent is a servant but not where he is a contractor, sub-contractor or their servant”.

The foundation of this position is that in an independent contractor relationship, the person receiving the services of the contractor does not have control over the way the person so contracted operates. The manner and time of executing the work are all left to the direction of the independent contractor.  The “employer” is therefore not vicariously liable for the actions of the independent contractor.

Arguably, in a labour brokerage arrangement, the person benefitting from the services of employees provided by the labour broker is not to be held vicariously liable for the actions of the employees. The labour broker should be held liable. The labour broker is the employer. This will be the case where there is a clear written agreement showing the nature of the arrangement in place. It is also submitted that in the absence of a labour brokerage agreement both the labour broker and the employer should be held jointly and severally liable.

Labour Broking and Independent Contractor Arrangements in South Africa

The law providing for independent contractors in South Africa is not very different from the Zimbabwean law. In South Africa, the Labour Relations Act No. 66 of 1995 specifically excludes independent contractors from the purview of the South African Labour law.  This is not surprising; the two legal jurisdictions share a similar common law. In terms of this common law, three types of contracts of employment existed, that is locatio conditio operarum (the letting and hiring of personal services in return for money), locatio conditio aperis (the letting and hiring of services by an independent contractor), and locatio conditio rei (the letting and hiring of a thing for money). It is the common law rules behind locatio conditio operis that form the basis of the independent contractor relationship as we know it today. This type of contractor is not covered by the labour laws in South Africa and so is the case in Zimbabwe.

The way labour broking is regulated in South Africa is commendable. It does not create avenues for the abuse of the system by unscrupulous employers. There is a lot that the Zimbabwean labour law jurisprudence can learn from South African Labour law as far as regulating labour broking arrangements is concerned. In terms of the South African Labour Relations Act,[8] a person employed under a labour broking arrangement is deemed to be the employee of the labour broker.[9] The Act also clarifies that if a person is an independent contractor, such a person will not be deemed to be the employee of either the labour broker or the client receiving the services of such a person.[10] Certain contraventions of the law makes the client and the labour broker jointly and severally liable for damages in favour of the employee. Such contraventions include breaches of a collective bargaining agreement, breach of a binding arbitration award, a breach of the South African Basic Conditions of Employment Act; and a breach of a determination made in terms of the Wage Act.[11]  The law in South Africa is also such that an employee can be on a labour brokerage arrangement for only three months with one client and a breach of this rule makes the employee permanently employed by the client.[12] In our view, this is a better way of regulating labour broking as it protects employees from being subjected to poor labour standards.

The discussion on labour broking and independent contractor arrangements will not be complete if a review of David Victor and 200 Others v CHEP South Africa (Pty) Ltd[13] is not undertaken. CHEP South Africa (Pty) Ltd had an independent contractor agreement with C Force in 2014. The service level agreement, forming the basis of the independent contractor relationship, stipulated that C Force would condition and repair pallets on behalf of CHEP. C Force would supply the labour and the tools, and the materials required for the process would be supplied by CHEP. The labour provided by C Force worked for CHEP for more than three months. The 201 employees were aggrieved by the arrangement and applied to the Commission for Conciliation, Mediation and Arbitration (CCMA) for an order declaring them as employees of CHEP. This was given the provisions in the Labour Relations Act that stipulated that if employees earn below a certain threshold and are provided by a labour broker, they become the employees of the client on a permanent basis after working for a client for more than three months.

Upon a close assessment of the agreement between the two companies, CHEP and C FORCE, a commissioner for CCMA concluded that a labour brokerage arrangement, rather than an independent contractor relationship existed between the parties. The net effect of this finding was that the employees were declared to be employees of the CHEP. On appeal to the Labour Court, the finding by the CCMA commissioner was overturned leading to a Labour Appeal Court application. The Labour Appeal Court proceedings upheld the decision of the CCMA commissioner. The basis of the decision by the Labour Appeal Court is discussed next.

It was the Labour Appeal Court’s finding that when assessing whether an independent contractor or a labour broking arrangement is in existence, it is the substance of the relationship rather than the form that is important.[14]

Several factors must be taken into consideration.[15] The service level agreement between the parties utilised man hours for the calculation of the fees payable to C Force which meant that labour was indeed provided to CHEP. It was because of this labour that C Force charged fees, pointing to the existence of a labour broking arrangement. Other factors that the court took into consideration included the fact that CHEP had control over the employees provided by C Force. The court observed:

          “Where a client contractually controls the overall work process of persons who work at its premisses, as well as their conduct and behaviour, such persons ordinarily will be deemed to work for the client.”

The fact that the required raw materials, plant, and equipment were supplied by CHEP, that the process of pallet conditioning formed an integral part of CHEPs business and that CHEP controlled the hours of work showed that G Force was a labour broker. Having found that a labour broking arrangement existed, the Labour Appeal Court concluded that the provisions in the Labour Relations Act that deems an employee to be permanently employed by the client applied in the circumstances.

The case illustrates the robust nature with which South African labour law protects employees who are under a labour brokerage arrangement. If a client utilises the labour for more than 3 months, the employees will become those of the client rather than those of the labour broker. This protects employees from being subjected to poor labour standards on the pretext that a labour brokerage arrangement is in place. This is the kind of protection one would recommend for the Zimbabwean jurisdiction.

Conclusion

The discussion above illustrates the distinct nature of a labour broking arrangement and an independent contractor relationship. The two arrangements are different. A person under a labour broking arrangement is considered an employee under the purview of the Labour Act. An employee under an independent contractor arrangement is not regarded as an employee. We note further that, labour broking in Zimbabwe is not as highly regulated as one would ascertain from the South African jurisdiction. The position in South Africa is such that if a person is employed for a period of more than three months, they become an employee for the client if they earn below a set threshold. David Victor and 200 Others v CHEP South Africa (Pty) Ltd shows the test that has been applied by the Labour Appeal Court in South Africa to determine if a labour broking arrangement is in place. In essence, it is the substance of the arrangement rather than the form that is more instructive.

[1]              Jacobus Hendrik Saayman v Christiaan Andreas Visser & Others Case Nr: 1267/01 (South Africa) held: “Unlike an employee, an independent contractor is generally not subject to the control or the instructions of the employer as to the manner in which he or she performs the work or produces the result”.

[2]              Masango & Others V Kenneth & Another SC 41 – 2015.

[3]              See David Victor and 200 Others v CHEP South Africa (Pty) Ltd

[4]              See McGregor M (2014), Labour Law Rules, Siber Ink CC, South Africa.

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

[6]              Masango & Others V Kenneth & Another SC 41 – 2015.

[7]              Schweppes Zimbabwe V Stanley Takaendesa LC/107/2014.

[8]              No. 66 of 1995.

[9]              Section 198(2) of the South African Labour Relations Act No. 66 of 1995.

[10]            Section 198(2) of the South African Labour Relations Act No. 66 of 1995.

[11]            Section 198(4) of the South African Labour Relations Act No. 66 of 1995.

[12]            See McGregor M (2014), Labour Law Rules, Siber Ink CC, South Africa.

[13]            JA/55/2019

[14]            See David Victor and 200 Others v CHEP South Africa (Pty) Ltd at paragraph 39.

[15]            David Victor and 200 Others v CHEP South Africa (Pty) Ltd.

2,346 Views

Unfair labour practices and the protection of employees

The protection of employees against unfair labour practices and standards is enshrined in the Constitution of Zimbabwe.[1] The Labour Act expands on the concept of unfair labour practices. It details instances where an employer, workers committee and the trade union may commit such unfair labour practices against employees. At this point, it is critical to note that an employee cannot commit an unfair labour practice against the employer. A perusal of the sections that provide for unfair labour practices shows that these can only be committed in the course of employment and not after an employee’s contract has been terminated. This section discusses the difference between the concept of unfair labour practices as found in the Zimbabwean Constitution and in the Labour Act. It also outlines the classes of breaches that constitute unfair labour practices.

The Constitution and the Labour Act

The two pieces of the legislation, the Constitution, and the Labour Act, refer to the concept of unfair labour practices as shown above.  The Constitution is the supreme law of the land and any law that is inconsistent with it is invalid to the extent of the inconsistency.[2] The labour act gives content to the right not to be subjected to unfair labour practices as found in the constitution.

Evidently, South African labour law also provides for the concept of unfair labour practises, in the same manner, provided in Zimbabwean labour law. The South African constitution seeks to protect “everyone” from unfair labour practices.[3] The Labour Relations Act of South Africa expands on the right to be protected against unfair labour practices and specifically accords this right to “employees”.[4] The right to fair labour practices in the Constitution is wider compared to the restricted approach that is provided in the Labour Relations Act.[5] The right in the constitution protects everyone and whereas the rights in the South African Labour Relations Act protect only employees.[6] The constitutional rights to fair labour practices have been extended to illegal[7] and invalid employment contracts because the constitution seeks to protect everyone.[8] The South African context is thus wider in its application when compared to the Zimbabwean context.

As indicated above, the law in Zimbabwe is like that in South Africa in that the listing of unfair labour practices found in the Labour Act is a closed list. If action falls outside the actions or omissions provided in the Labour Act it cannot be classified as unfair labour practice.[9] A typical example, is one cited by McGregor wherein he argues that if an employer is unkind to an employee his or her actions may not qualify as an unfair labour practice despite the employee viewing this unkind behaviour as unfair to him or her.[10]

The Greatermans[11] case is the locus classicus, in Zimbabwe, of the position that for an action to be classified as an unfair labour practice in should fall within any one of the categories under sections 8, 9 and 10 of the Labour Act (Chapter 28.01). The position in Zimbabwe is therefore that if an action or an omission falls outside the confines of the unfair labour practice as defined by the Labour Act, no matter how unfair such an act or omission is to an employee, it cannot be classified as an unfair labour practise. Some writers lament the restricted interpretation provided to the concept of unfair labour practises in the Gratermans case.[12] Until this position changes, the contemporary labour law in Zimbabwe is that actions or omissions that do not fall within the categories or sections mentioned above, do not qualify to be termed as unfair labour practices.

The following part deals with actual actions classified by the Labour Act as unfair labour practices.

Unfair Labour Practices by the Employer

In the course of employment, an employer is expected to avoid certain actions or omissions that are unwarranted to an employee. The legislature came up with section 8 of the Labour Act whose main purpose is to outline unfair labour practices that an employer is prohibited from committing in the course of the employment relationship.

One of the unfair labour practises that an employer can commit is found under Section 8 (a) of the Labour Act. It is provided that an employer is proscribed from preventing, hindering, or obstructing “any employee in the exercise of any right conferred upon him in terms of Part II”. Part II provides for several rights that accrue to an employee. To mention a few of these rights, Part II provides for the right of an employee to membership in a trade union or workers committee[13], protection against discrimination[14] as well as protection of employees’ right to democracy in the workplace.[15] This section is in keeping with the right to freedom of association as provided under international conventions on the subject.[16]

Section 8(b) precludes an employer from contravening employee rights in part II as well as the rights contained under section 18 of the Act. Section 18 provides for maternity leave provisions. It is therefore an unfair labour practice to prevent an employee from going on maternity leave. The Labour Amendment Act 2021 had removed the qualifying service that was applicable before the enactment. It was required that an employee must spent 12 months of service with an employer before qualifying for maternity leave. It is now an unfair labour practice and a violation of section 8(b) of the Act for one to compel an employee to work for a certain period before qualifying for maternity leave.

Section 8(c) of the Act makes it an unfair labour practise for an employer to refuse to negotiate in good faith with a worker’s committee or a trade union applicable to an entity. Negotiating in good faith is not defined in the Act. We submit that negotiating in good faith entails dealing honestly and fairly with others. The employer must not engage in practises that shows a deliberate act of not disclosing the true picture of a situation whilst negotiating with a workers committee. It may also involve co-opting a workers committee through bribing the workers representatives in a bid to have them side with the employer. All this constitutes unfair labour practices.

Section 8 (d) speaks to the need for an employer to co-operate in good faith with an employment council on which the interests of the employees are represented. We submit that cooperating with an NEC means working jointly or assisting the NEC in complying with the Act. It may also entail negotiating in good faith in all negotiations that happen at the employment council. Failure to render such cooperation makes the employers omission or act an unfair labour practice.

Section 8 (e) outlines several failures by an employer that also constitute an unfair labour practice. The section reads:

“An employer or, for the purpose of paragraphs (g) and (h), an employer or any other person, commits an unfair labour practice if, by act or omission, he—

(e) fails to comply with or to implement— (i) a collective bargaining agreement; or (ii) a decision or finding of an employment council on which any of his employees are represented; or (iii) a decision or finding made under Part XII; or (iv) any determination or direction which is binding upon him in terms of this Act;”

Our view is that section 8(e) of the Act is self-explanatory and does not require much emphasis.

Unfair Labour Practices by the Workers Committee

Whilst it is clear that an individual employee may not commit an unfair labour practice, a trade union or workers committee can commit an unfair labour practice against an employee. Section 9 of the Act outlines the unfair labour practices as follows:

“A trade union or a workers committee commits an unfair labour practice if by act or omission it—

 (a) prevents, hinders, or obstructs an employee in the exercise of any right conferred upon him in terms of Part II; or

(b) contravenes any of the provisions of its constitution; or

(c) fails to represent an employee’s interests with respect to any violation of his rights under this Act or under a valid collective bargaining agreement, or under a decision or finding of an employment council, or under Part XII; or

(d) fails to comply with or to implement any decision or finding of an employment council, or any decision or finding made under Part XII, or any determination or direction under this Act which is binding upon it; or

(e) not being registered, purports to act as a collective bargaining agent in terms of Part X or participates in the collection of union dues; or

(f) recommends collective job action in contravention of a valid collective bargaining agreement; or 13

(g) except as may be authorized in terms of this Act, purports to act as the collective bargaining agent for employees, or calls for collective job action when another trade union has duly been registered to represent the employees concerned; or

(h) purports to enter upon an agency agreement or collective bargaining agreement when another trade union has been duly registered for the workers concerned.

The role of the workers committee is to represent employees in the workplace. If the workers committee perpetuates the violation of employees rights such conduct or omission can be an unfair labour practise as shown above. At face value, an employee aggrieved by the conduct or omission of a workers committee may have recourse against the workers committee. This is so in terms of section 9 when read together with Part XII of the Labour Act.

It is however important to note that a workers committee is not a legal persona, and it cannot sue or be sued. It cannot be brought before a court or a conciliation tribunal. This was held in CT Bolts (Pvt) Ltd v Workers Committee (SC 16/2012). It is therefore our respectful submission that section 9 of the Labour Act is academic to the extent that it provides that a workers committee can legally commit an unfair labour practise. There is no legal way of making a determination that the committee has indeed committed an unfair practise. In addition, even if a way was to be found of making such a determination, there is no legal way of remedying the unfair labour practise mainly because a workers committee cannot be brought before a court.

Enforcement of the right to fair labour practises

Part XII of the Labour Act deals with the resolution of unfair labour practices. The power to resolve such disputes is primarily vested in designated agents[17] and labour officers.[18] Several remedies for unfair labour practices are prescribed in the whole Labour Act. To mention a few these may involve ordering the party infringing the employee’s rights to stop the unfair labour practice, payment of compensation and reinstatement of the employee to his or her former position if the unfair labour practise had resulted in the unfair dismissal of the employee.[19]

Whilst the right to fair labour practises is enshrined in the constitution, the courts have concluded that remedies against the violation of the right will have to be found in terms of the Labour Act and not the Constitution. In Magurure & 63 Ors v Cargo Carriers International Hauliers (Pvt) Ltd (SABOT) (CCZ 15/ 2016) the Constitutional Court was seized with an application that was meant to buttress the employees right to fair labour standards. In dismissing the application, the court argued that parties cannot use the constitution to directly litigate when there is a law of general application that is providing for constitutional rights. In this case, the aggrieved employees could and should have enforced their right to fair labour practices using the Labour Act as compared to making a direct Constitutional Court application.

In our view the position held by the Constitutional Court in Magurure is well-founded. Litigants are under a legal and ethical obligation to follow domestic remedies found in the Labour Act before approaching the apex court. The Constitutional Court should not be clogged with cases that can easily be handled by lower courts and tribunals.

Conclusion

From the foregoing discussion, it is indeed the position in Zimbabwean labour law that unfair labour practises are only those actions listed under 8, 9 and 10 of the Labour Act (Chapter 28.01). Constitutional protection against unfair labour practices is only provided under those listed circumstances. This is different from the South African jurisdiction where beyond persons legally recognised as employees, constitutional protection against unfair labour practices has been provided to everyone including illegal workers. We look forward to a broader interpretation of this concept to allow everyone the privilege of enjoying this right in the manner it is implemented in other jurisdictions.[20] This discussion also outlined the various actions or omissions that qualify as unfair labour practices. The important lesson is that unfair labour practises as found in the Labour Act can only be committed against an employee in the course of employment and not when a contract has seized to exist. We have also expressed our doubt in terms of the applicability of section 9 of the Labour Act our main argument being that a workers committee is not a legal persona and may not be in a position of being accused to have committed an unfair labour practise against an employee.

[1]              See Section 65(1) of the Constitution of Zimbabwe (Amendment) Act 20 of 2013 provides that: “Every person has the right to fair and safe labour practices and standards and to be paid a fair and reasonable wage”.

[2]              See Section 2 of the Constitution of Zimbabwe (Amendment) Act 20 of 2013.

[3]              Section 23(1) of the Constitution of the Republic of South Africa reads: “Everyone has the right to fair labour practices”

[4]              Section 186(2) of the South African Labour Relations Act No. 66 of 1995 reads: (2) “Unfair labour practice” means any unfair act or omission that arises between an employer and an employee involving – (a) unfair conduct by the employer relating to the promotion, demotion, probation (excluding disputes about dismissals for a reason relating to probation) or training of an employee or relating to the provision of benefits to an employee; (b) unfair suspension of an employee or any other unfair disciplinary action short of dismissal in respect of an employee;  (c) a failure or refusal by an employer to reinstate or re-employ a former employee in terms of any agreement; and  (d) an occupational detriment, other than dismissal, in contravention of the Protected Disclosures  Act, 2000 (Act No. 26 of 2000), on account of the employee having made a protected disclosure defined in that Act.

[5]              See McGregor M (2014), Labour Law Rules, Siber Ink CC, South Africa at page 106.

[6]              See McGregor M (2014), Labour Law Rules, Siber Ink CC, South Africa at page 106.

[7]              Kylie v CCMA, unreported Case No CA10/08, May 28, 2010.

[8]              See McGregor M (2014), Labour Law Rules, Siber Ink CC, South Africa at page 106.

[9]              Greatermans Stores and Anor v Minister of Public Service, Labour & Social Welfare CCZ 2/2018 held at page 39 that :” For a person to allege an unfair labour practice as a violation of the right enshrined in s 65(1) of the Constitution, the conduct complained of must constitute one of the acts or omissions listed by the Act as unfair labour practices.”

[10]            See McGregor M (2014), Labour Law Rules, Siber Ink CC, South Africa at page 105 and 106.

[11]            Greatermans Stores and Anor v Minister of Public Service, Labour & Social Welfare CCZ 2/2018.

[12]            See TG Kasuso (2021) Revisiting the Zimbabwean Unfair Labour Practice Concept, http://dx.doi.org/10.17159/1727-3781/2021/v24i0a9016 (Accessed 9 July 2022) who argues that “In giving meaning to the constitutional right to fair labour practices, the Constitutional Court should have examined the essential elements of the right, namely, every person (beneficiaries of the right),  fairness, and labour practice.”

[13]            Section 4 of the Labour Act (Chapter 28.01).

[14]            Section 5 of the Labour Act (Chapter 28.01).

[15]            Section 7 of the Labour Act (Chapter 28.01).

[16]            Freedom of Association and Protection of the Right to Organise Convention, 1948 (No. 87).

[17]            See section 63 of the Labour Act (Chapter 28.01).

[18]            See section 93 of the Labour Act (Chapter 28.01).

[19]             In Xstrata South Africa (Pty) Ltd (Lydenburg Alloy Works) v Num Obo Masha and Others (JA 4/15) [2016] ZALAC 25 (South Africa) the court reasoned that reinstatement is the primary remedy for unfair dismissal unless reasonably impractical or employment relationship irretrievably destroyed.

[20]            See Kylie v CCMA, unreported Case No CA10/08, May 28, 2010, where the right to fair labour standards was enforced in favour of a prostitute.

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