Labour Law In South Africa

South African labour law regulates the relationship between employers, employees and trade unions in the Republic of South Africa.

History

The Native Labour Regulations Act 1911 prohibited strikes by trade unions, introduced wage ceilings and a pass system for moving around jobs. Over 70,000 Chinese labourers were brought in, and used by landowners to undercut the wages of other workers. Among white workers, there was significant unrest, and major strikes took place in 1907, 1913, 1914 and 1922

For a period of sixteen years, from 1979 to 1995, several critical developments occurred in the field of labour law in South Africa, beginning with a radical change in the first of these years, when a significant Commission of Enquiry was held, resulting in the establishment of an Industrial Court, which was given extensive powers to mould, change, shape and develop the law. Prior to 1995, most labour relations were based on contracts. In 1995, much of the law developed by the Commission and the Industrial Court was put together in the Labour Relations Act 1995 (LRA). Since then, most labour law has been based on statute.

Prior to 1995, an employee could be dismissed in terms of the contract of employment, which could permit any reason for dismissal. Since 1995, an employee may be dismissed only for misconduct, operational reasons and incapacity. The Labour Relations Act 1995 is a pivotal piece of legislation, as it recognises the need for fast and easy access to justice in labour disputes. The Industrial Court had the status of a High Court, and therefore was not accessible to all labourers.

1995 also saw the introduction of the Commission for Conciliation, Mediation and Arbitration (CCMA) which is an administrative tribunal. The Commission for Conciliation, Mediation and Arbitration endeavours first and foremost to conciliate between the parties. If it is unsuccessful in this, the matter moves on to arbitration. The entire process is very informal, and at no charge, and is therefore very accessible to labourers, who often use it: About 300 new cases are brought before the Commission for Conciliation, Mediation and Arbitration daily. In addition to the Commission for Conciliation, Mediation and Arbitration, 1995 saw the introduction of bargaining councils, which allow for communication across the industry. A bargaining council is organised collectively and voluntarily, and must be registered. In order to be registered, an alternative-dispute-resolution mechanism, similar to the Commission for Conciliation, Mediation and Arbitration, must be put in place.

The Labour Relations Act 1995 also regulated the issue of fairness, not only in termination but during employment, too. In 1998, however, most of the law on unfair labour practices was removed from the Labour Relations Act 1995 and put into the Employment Equity Act (EEA). The EEA also deals with issues such as fairness regarding a worker's human immunodeficiency virus (HIV) status or disability, as well as the issue of affirmative action.

The Basic Conditions of Employment Act (BCEA), the Health and Safety Acts and the Skills Development Act, must be read with the EEA. The Skills Development Act provides that a small percentage of a labourer's salary must be contributed to the Department of Labour, enabling certain workshops to be run which are designed to develop skills.

Constitution

Chapter 2 of the Constitution contains several provisions of relevance to employment and labour law:

* the right to equality
* protection of dignity
* protection against servitude, forced labour and discrimination
* the right to pursue a livelihood and
* protection for children against exploitative labour practices and work that is hazardous to their well-being.

It is important to interpret all labour legislation in light of the Constitution.

Section 23 of the Constitution deals specifically with labour relations, providing that everyone has the right to fair labour practices,s 23(1). and specifically the right

* to form and join a trade union;
* to participate in the activities and programmes of a trade union; and
* to strike

Every employer, meanwhile, has the right

* to form and join an employers’ organisation; and
* to participate in the activities and programmes of an employers’ organisation.

Every trade union and every employers’ organisation has the right

* to determine its own administration, programmes and activities
* to organise and
* to form and join a federation

Finally, every trade union, employers’ organisation and employer has the right to engage in collective bargaining.

Section 23(1) is an unusual provision—only South Africa and Malawi expressly protect the right to fair labour practices — as it is so broad and overarching. An exact definition of fair labour practices is impossible, since this is a dynamic field of the law, rooted in socioeconomic rights. Section 23(1) refers to "everyone," encompassing far more than merely employees and workers; it also includes would-be workers, employers and juristic persons.

Section 23 is not entirely universal, however, as soldiers are excluded from its ambit insofar as they may not strike at a time of war.

The Labour Relations Act was promulgated as the "national legislation" referred to in subsections 23(5) and 23(6), which provide respectively that "national legislation may be enacted to regulate collective bargaining," and that "national legislation may recognise union security arrangements contained in collective agreements." Both subsections stipulate that, to the extent that such legislation may limit one of the rights in section 23, the limitation must comply with section 36(1), the limitations clause of the Constitution.

The current Basic Conditions of Employment Act is also designed to give effect to the right to fair labour practices. Both Acts are bolstered by the EEA, which replicates the equality clause in the Constitution in its totality, adding that one may not discriminate on the basis of human immunodeficiency virus (HIV) status.

The general guarantee of fair labour practices has far-reaching effects on the civil courts’ approach to the interpretation of the rights of parties to employment contracts.

All courts are enjoined, when applying and developing the common law, to have due regard to the spirit, purport and objects of the Bill of Rights. This calls for a reconsideration of some of the assumptions underlying the common-law contract of employment, in particular the employer’s power of command and unfettered rights in respect of promotion and dismissal.

Furthermore, the labour courts’ judgments on such contentious issues as the dismissal of striking workers are subject to review by the Constitutional Court, so long as the applicants have exhausted the procedures available to them under the labour legislation.

In ''NUMSA v Bader Bop'', the Constitutional Court overturned a decision of the Labour Appeal Court which restrictively interpreted the Labour Relations Act 1995. The court recognised the necessity of collective bargaining and bargaining councils which facilitate the establishment of trade unions. The court held that minority unions may not strike in support of demands for organisational rights reserved in the Act for majority unions.

In '' NEHAWU v University of Cape Town'', the Constitutional Court overturned another decision of the Labour Appeal Court which restrictively interpreted the Labour Relations Act 1995. It had been argued that the term "everyone" did not include a university or a company, but the court held otherwise. Furthermore, the court ruled that, under the original section 197 of the Labour Relations Act 1995, contracts of employment transferred automatically when businesses were transferred, irrespective of the wishes of the employers.

'' SANDU v Minister of Defence'', another Constitutional Court, case Judge O’Reagan dealt with the concept of a "worker," and held that, although the Labour Relations Act 1995 does not apply to South African National Defense Force (SANDF) members, they are still "workers" in terms of the Constitution, which protects the rights of every person in South Africa.

Employment contract

Parties

Identification

The first question to be asked, when seeking to resolve any labour law problem, is whether the parties are indeed "employees" and "employers" within the meaning of the applicable statute or the common law.

This has long been a difficult task in South Africa, as it is not always immediately apparent whether the parties have entered into the '' locatio conductio operarum'' (contract of employment) or merely the '' locatio conductio operis'' (contract of work).

Distinguishing between these two kinds of contracts is critically important, as different legal consequences flow from the various forms of contract. Most important is that South African labour legislation applies only in respect of employees, who are entitled to social security benefits and have access to the statutory mechanisms if they wish to seek remedies for violations of their employment rights. Similarly, only employers are bound by the labour statutes, and are vicariously liable for the delicts of their employees.

The Labour Relations Act, has through the S200A and the Code of Good Practice: Who is an employee, provided guidelines on the determination if a party is an employee. S200A sets out several requirements which if met makes the presumption if the person is an employee or not.

Common law

The first source to be examined, when seeking to determine whether parties to a work relationship are employers and employees, is the contract into which they have entered.

A contract of employment comes into existence when the parties conclude an agreement that conforms to the requirements of the '' locatio conductio operarum''. The contract of employment is traditionally defined as "a contract between two persons, the master (employer) and the servant (employee), for the letting and hiring of the latter's services for reward, the master being able to supervise and control the servant’s work."

This, however, raises the question of how much supervision or control is required to distinguish between employees and independent contractors.

Reported judgments have indicated that the task of distinguishing employees and employers from parties to other contractual relationships entailing the provision of work, or the rendering of services, is not a matter of definition; classification of such contracts is a "matter of substance, not merely of form."

The true nature of the contract, therefore, is determined from the relationship between the parties, not merely the label the parties have given their contract.

Statutes

Statutory definitions do not resolve the problem. "Employee" is defined

* in section 213 of the Labour Relations Act 1995 as
** "any person excluding an independent contractor, who works for another person or for the State, and who receives, or is entitled to receive, any remuneration; and
** "any other person who in any manner assists in carrying on or conducting the business of an employer;"
* in section 1 of the Basic Conditions of Employment Act in exactly the same words; but
* in section 1 of the EEA as "any person other than an independent contractor who
** "works for another person or for the State and who receives, or is entitled to receive, any remuneration; and
** "in any manner assists in carrying on or conducting the business of an employer."

The difference between the Labour Relations Act 1995 and the EEA is that the Labour Relations Act 1995 excludes independent contractors only in section 213(a), while the EEA excludes independent contractors in both subsections. It is safe, however, to assume that even from the second part of the definition of an "employee," as it appears in the Labour Relations Act 1995 or the Basic Conditions of Employment Act, independent contractors are implicitly excluded.

At the core of subsection (a) of both definitions lies a reference to the contract of employment: one person working for another in exchange for some form of remuneration.

The basic idea behind subsection (b) of both definitions is that employees are those people who place their capacity to work at the disposal of others. This is the essence of employment.

The case of ''Liberty Life Association of Africa v Niselow'' reiterates the law set out above and the interpretation of the definition of "employee."

Courts

Labour legislation does not define "contract of service" or the concept of "work" at all.

This means that it is necessary to look outside the legislation to determine the meaning of these terms, in order to distinguish between an employee and an independent contractor.

The courts have formulated a number of tests for drawing the distinction.

= Control test

=

The control test focuses on the element of "control" exercised by the employer over the employee.

The power to control has traditionally been regarded as the hallmark of the employment contract. With the advent of highly skilled employees who are given free rein in performing their duties, the courts no longer insist on ''de facto'' control, as once they did, but recognise that a ''right'' to control is sufficient.

The courts initially applied the requirement of a right to control rather strictly, as in '' R v AMCA Services'', where the presiding officer spoke of "a right to control, not only the end to be achieved by the other’s labour and the general lines to be followed, but the detailed manner in which the work is to be performed."

It is now clear, however, that the courts have in mind, a right to control only in principle. The employer not choosing to exercise that right does not render the contract something other than one of employment.

The application of the control test in isolation is entirely inadequate, as certain employees have a wide discretion as to how to perform their work. Such discretion does not alone render them independent contractors.

The ultimate difference between an employee and an independent contractor is that the principal has no legal right to prescribe the manner in which the independent contractor brings about the desired result, but may prescribe methods by which the employee works. In '' Colonial Mutual Life Assurance Society v MacDonald'', the court held that the employee was subject to the control of the employer in the sense that the latter had the right to prescribe not only what work had to be done, but also the manner in which that work had to be done. The independent contractor, on the other hand, could be directed only as to what work must be done, not ''how'' it was to be done.

In any event, to define a contract in terms of one of its characteristics is tautological.

= Organisation test

=

The organisation test was developed in French law and adopted by South African law in ''R v AMCA Services and Another''. It is based upon the assumption that whether or not one is an employee does not rest on submission to orders; it depends on whether the person is part and parcel of the organisation.

In other words, one looks at the extent to which a person (the worker) is integrated into the organisation of the other person (the employer), or whether the person is performing work inside the organisation of another.

The work of an independent contractor, although done for the business, is not integrated into it; it is only accessory to it.

If a person is incorporated into or related sufficiently to the organisation, that person will be regarded as an employee or a worker even though the employer might exercise little actual control over him.

One of the problems with this test is that it is not always possible to measure the extent of integration, or to determine what degree of integration is sufficient for someone to qualify as an employee.

The test was rejected by the Appellate Division in ''S v AMCA Services'' on the basis of it being too vague.

= Multiple or dominant-impression test

=

The deficiencies of the control and organisation tests led the courts to approach the question in the same way that they approach so many other problems: The relationship is viewed as a whole; a conclusion is drawn from the entire picture.

In '' Ongevallekommissaris v Onderlinge Versekeringsgenootskap AV-BOB'', although the court did not spell out exactly what may be included in the general picture, guidance may be derived from the English case of '' Ready Mixed Concrete v Minister of Pensions and National Insurance'', in which the presiding officer set out three possible components:

# The servant agrees that, in consideration of a wage or other remuneration, he will provide his own work and skill in the performance of some service for his master.
# He agrees, expressly or impliedly, that in the performance of that service he will be subject to the other’s control in a sufficient degree to make that other master.
# The other provisions of the contract are consistent with its being a contract of service.

When courts examine the "other provisions of the contract," they will consider all relevant aspects of the relationship. These include:

* the form of the contract;
* the right to supervision (in other words, whether the employer has the right to supervise the person);
* the extent to which the worker depends on the employer in the performance of his duties;
* whether the employee is not allowed to work for another;
* whether the worker is required to devote a specific amount of time to his work;
* whether the worker is obliged to perform his duties personally;
* whether the worker is paid according to a fixed rate or by commission;
* whether the worker provides his own tools and equipment; and
* whether the employer has the right to discipline, suspend and dismiss the worker.

The decisive difference between the control test and the dominant-impression test is that, in the latter, the existence or absence of control is only one of the factors to be taken into account.

In ''Smit v Workmen's Compensation Commissioner'', the court had to decide whether Smit, who had been employed as an "agent" for an insurance company, was an employee or not. He had been

* remunerated on a commission-basis;
* forbidden to perform certain acts (such as pledging the company’s credit) without written authority;
* forbidden from working for another company at the same time, but was not required to work full-time and could do other work at different times;
* given the use of a company motor-car, but had to pay out of his own pocket for fuel and servicing;
* working closely with a manager, but there was a total absence of any right of supervision and control of Smit by the insurance company; and
* able to obtain assistance from others in performing his duties.

The dominant-impression test was followed in this case, and Smit was held to not be an employee of the insurance company.

In '' Medical Association of SA v Minister of Health'', several district surgeons challenged the decision of the provincial MEC for Health for the Free State to terminate their contracts summarily as part of the restructuring of the district health service. The multiple or dominant impression test was followed, and the court used the factors discussed in ''Smit'' to assist it in obtaining the dominant impression that part-time district surgeons were in fact employees of the State.

The court held that the dominant-impression tests entails that one should have regard to all those considerations or ''indica'' which would contribute towards a determination of whether the contract is one of service or of work, and react to the impression one gets upon a consideration of all such ''indica''. The Labour Court based its decision on the following factors:

* The doctors rendered "personal services."
* The doctors were expected to be "at the beck and call" of the employer 24 hours a day, and to give preference to official duties over those in their private practices.
* The employer was obliged to pay a "contractual salary" to the doctors even in the absence of any actual work being performed, as long as the doctors made themselves available to do the work.
* Even though the doctors were professionals, the provincial administration did have some control over the way in which services were rendered.

The test has been subjected to severe criticism. Etienne Mureinik has said that it test

offers no guidance in answering the (legal) question whether the facts are of such a nature that the individual may be held to be servant within the meaning of the common law in difficult (penumbral) cases. Indeed, it is no test at all. To say that an employment contract is a contract which looks like one of employment sheds no light whatsoever on the legal nature of the relationship.

This criticism is based on the idea that it is not helpful to say a particular relationship exists because it looks like it does.

= Productive capacity test

=

In other decisions, the courts appear to have resorted to what may be described as the "productive capacity" test.

This test was formulated in Martin Brassey’s article "The Nature of Employment" in the following terms:

The independent contractor “sells the job” whereas the employee “sells his hands” .. Eployment is a relationship in which one person is obliged, by contract or otherwise, to place his or her capacity to work at the disposal of another .. A employee is to be distinguished from an independent contractor, who undertakes to deliver, not his or her capacity to produce, but the product of that capacity, the completed work.

= Differences between employees and independent contractors

=

In '' SA Broadcasting Corporation v McKenzie'', the Labour Appeal Court summarised the main differences between the contract of employment proper and what is called the "contract of work" (''locatio conductio operis''):

* In the first, the object is the rendering of personal services between employer and employee; in the second, the object is the production of a certain specified service or the production of a certain specified result.
* The employee renders the service at the behest of the employer; the independent contractor is not obliged to perform his work personally, unless otherwise agreed.
* The employer may decide whether it wishes to have employee render service; the independent contractor is bound to perform specified work or produce a specified result within a specified or reasonable time.
* The employee is obliged to obey lawful, reasonable instructions regarding work to be done, and the manner in which it is to be done; the independent contractor is not obliged to obey instructions regarding the manner in which a task is to be performed.
* A contract of employment proper is terminated by the death of the employee; the contract of work is not terminated by the death of the contractor.
* A contract of employment terminates on completion of the agreed period; the contract of work terminates on completion of the specified work, or on production of the specified result.

= Labour Relations Act 1995 s 200A

=

There is very little work that cannot be outsourced. Outsourcing is generally not supported by trade unions, who represent employees. If work is outsourced, the worker is an independent contractor. Political pressure was placed on government to move away from outsourcing and more towards employment.

In 2002, accordingly, a new presumption was added to the Labour Relations Act 1995, providing guidelines on when it has to be ascertained whether or not someone is an employee. This presumption was introduced as a part of significant amendments to the Labour Relations Act 1995 and the Basic Conditions of Employment Act in 2002.

The effect of this rebuttable presumption is that, if one or more of the list of factors is present, the person is presumed to be an employee unless and until the contrary is proven. Many of the factors and issues discussed by the courts in the cases above resurface again: The presumption is thus created

* if the manner in which the person works is subject to the control or direction of another person;
* if the person’s hours of work are subject to the control or direction of another person;
* if, in the case of a person who works for an organisation, the person forms part of that organisation;
* if the person has worked for that other person for an average of at least forty hours per month over the last three months;
* if the person is economically dependent on the person for whom he works or renders services;
* if the person is provided with tools of trade or work equipment by the other person; and
* if the person only works for or renders services to one person.

The legislative provision has been taken by some to be merely a restatement or summary of the principles laid down by the courts with the passing of time.

Although this presumption is useful in determining whether a person is an employee or not, as it is closely linked to the principles and approaches developed by the courts, the Labour Court held, in ''Catlin v CCMA'', that section 200A does not do away with the principle that the true nature of the relationship between the parties must be gathered from the contract between them. Section 200A is not the starting point, therefore; the court held that it is necessary to consider the provisions of the contract before applying the presumptions.

Essentials

The common-law concept of employment sets the scene for the interpretation of the Labour Relations Act 1995.

The contract of employment is the foundation of the relationship between an employee and his employer. It links the two parties in an employment relationship, irrespective of the form the contract takes.

The existence of an employment relationship is the starting point for the application of all labour law rules. Without an employment relationship between the parties, the rules of labour law do not apply.

The origin of South Africa's modern contract of employment lie in Roman law, where a distinction was made between the two types of contracts discussed above: ''locatio conductio operis'' and ''locatio conductio operarum''.

In terms of the common law, one does not have to have a written contract; therefore, not having the contract in written form is not a fatal flaw, as the contract can be verbal. There are, however, a number of statutes which require specific contracts of employment to be in writing. Section 29 of the Basic Conditions of Employment Act, for example, states that the employer must supply the employee with certain written particulars concerning specific things, like hours worked and remuneration.

Like any contract, the ''locatio conductio operarum'' commences when the parties have agreed to its essential terms, unless both parties have agreed to suspend its operation for a particular period. If the contract's operation is suspended, the employer is obliged to allow the employee to commence work on the specified date. Failure to do so, without good cause, constitutes a breach of contract at common law and a dismissal under the Labour Relations Act 1995. It is important, therefore, to determine what the essentials of the contract of employment are.

Stripped to its essence, the contract of employment today may be defined as an agreement between two parties, in terms of which one party (the employee) works for another (the employer) in exchange for remuneration. Although this definition appears to be simple, it contains a number of important principles, aspects and implications. When they are taken into account below, the definition of the employment contract may be expanded as follows:

The contract of employment is a voluntary agreement between two legal personae (the parties) in terms of which one party (the employee) places his or her personal services or labour potential at the disposal of the other party (the employer) for an indefinite or determined period in exchange for some form of fixed or ascertainable remuneration, which may include money and/or payments in kind. This entitles the employer to define the employee’s duties and to control the manner in which the employee discharges them.

= Agreement

=
Firstly, it must be noted that the employment contract is based on agreement; the parties must enter into it voluntarily. This idea finds expression in section 13 of the Constitution, which provides that "no one may be subjected to slavery, servitude or forced labour," and section 48 of the Basic Conditions of Employment Act, which states that "all forced labour is prohibited."

Another implication of the fact that the employment contract is based on agreement is that it is a contract, and therefore must comply with the requirements of our law for a valid contract. If it does not comply with these requirements, it will not be regarded as binding and enforceable.

Consensus between the parties means that both must have a serious intention to create mutual rights and duties to which they will be legally bound. They must have each been fully aware of the nature of the duties, and that the other had this intention.

At common law, the parties are not required to observe any formalities. There is no requirement that the contract be in writing, but certain employment contracts are required by statute to be in writing, like those of merchant seamen and learners under the Skills Development Act. In addition, those of apprentices and candidate attorneys must also be registered with the appropriate authorities. Lastly, where parties wish to alter provisions of the Basic Conditions of Employment Act, this must be done in writing.

= Work

=
Secondly, one of the pivotal concepts in the initial definition is that of work. Generally, to work means to place one’s labour potential at the disposal and under the control of another. This means that, when we work, we offer our services to another person, and agree that the other person will be able to tell us what to do, when to do it, how to do it and where to do it.

To place your labour potential at the disposal of another means to offer your ability to perform certain tasks to another person, and to offer, at the same time to follow that person’s instructions.

= Remuneration

=
Remuneration normally takes the form of payment of money, or the provision of another benefit. (According to the common law, payment may be made in kind.)

Payment may be made monthly, weekly, daily or even in irregular cash payments. The common law does not prescribe what form payment must take.

The Labour Relations Act 1995 contains a statutory definition of remuneration in section 213: "any payment in money or in kind, or both in money and in kind, made or owing to any person in return for that person working for any other person, including the State."

The contract may state that remuneration is the "normal going rate for a specific type of work," or state a specific amount or merely "minimum wage."

The common law does not indicate minimum wages; these are usually set by collective-bargaining councils and are industry specific.

= Reciprocity

=
The contract of employment is a reciprocal contract. This means that one promise is made in exchange for another, and one obligation is incurred in exchange for the other. The employee works in exchange for remuneration; the employer remunerates the employee in exchange for the employee offering to place his labour potential at the disposal and under the control of the employer.

= Summary

=
To summarise, the essential elements of the employment contract are as follows:

* It is a voluntary agreement.
* There are two legal personae.
* The employee agrees to perform certain specified or implied duties for the employer.
* There is an indefinite or specified period.
* The employer agrees to pay a fixed or ascertainable remuneration to the employee.
* The employer gains a (qualified) right to command the employee as to the manner in which he carries out his duties.

Duties

An employment relationship commences only when the parties conclude a contract of service. Prior to this, neither party has any rights against the other; they are merely a prospective employee and a prospective employer.

There are, however, two statutory exceptions to the principle that employers have no obligations to applicants for employment:

# The EEA prohibits direct or indirect unfair discrimination against an employee or applicant for employment on the basis of race, colour, gender, sex, religion, political opinion, ethnic or social origin, sexual orientation, age, disability, religion, conscience, belief, culture, language, family responsibility, marital status or any other arbitrary ground.
# The Labour Relations Act 1995 and the Basic Conditions of Employment Act protect both employees and persons seeking employment against discrimination for exercising rights conferred by the Acts.

= Employer

=
In addition to the three principle duties of the employer, discussed below, employers are further obliged to accord employees their rights in terms of the applicable contracts of service, collective agreements and legislation, as well as to adhere to certain statutory duties imposed in the interests of employees.

Receipt into service

The employer’s obligation to receive the employee into service is the corollary of the employee’s duty to enter and remain in service.

The duty to receive employees into service does not mean that employers must necessarily provide employees with work to keep them busy, although this general rule is subject to some exceptions: where, for example, remuneration is based on the volume of work done, as in the case of piece-workers or salespersons working on commission, or where the failure to allow the employee to work degrades his status. A duty to provide work may also arise where the employer has contracted to train the employee in a particular profession or trade, as in the case of article clerks and apprentices.

The common law permits the suspension of an employee, suspected of some form of grave misconduct, while the matter is being investigated, but the employee is entitled to his remuneration during the period of suspension.

Employers may deny their employees access to the workplace, or otherwise prevent them from working, in the course of collective bargaining. This is known as a "lock out," and is the employer’s equivalent of the employees’ strike. If a lock-out is lawful—if, that is, it complies with the Labour Relations Act 1995—the employer is relieved of its obligation to pay the locked-out employees their wages.

Since the contract of employment is personal, one employer cannot compel an employee to work for another if the first employer has no work for him, unless the first employer's business is transferred as a going concern.

Payment

This duty is so fundamental to the employment contract that the courts will assume, where there has been no agreement on remuneration, either that the contract is not a contract of employment, or else that the parties impliedly intended the payment of a reasonable sum according to the custom and practice of the industry and locality.

The duty to pay, and the commensurate right to remuneration, arises not from the actual performance of work, but from the tendering of service.

It has become a widespread practice for employers to make up remuneration "packages" for their higher-paid employees in a tax-effective way, by substituting various benefits (like housing and car allowances) for the cash component of the salary.

The periodicity of payment depends on the parties’ agreement or on custom.

An employer may not unilaterally deduct any amount from the remuneration to which an employee is entitled.

If the contract is terminated summarily for good cause, the employer must pay the employee for services rendered to the day of the dismissal. The same principle applies when the employee deserts mid-term before the end of a fixed-term contract or without proper notice.

Safe and healthy working conditions

Under the common law, employers are obliged to provide their employees with reasonably safe and healthy working conditions.

The scope of this duty extends to providing proper machinery and equipment, properly trained and competent supervisory staff, and a safe system of working.

If the employer fails to meet with this obligation, affected employees are not in breach of contract if they refuse to work until the dangerous situation is corrected.

Under the common law, employees had to rely on delict if the employer did not ensure that the working conditions were safe and healthy, but this was viewed to be imprecise, and the Legislature intervened. The situation is now governed by the Occupational Health and Safety Act, 1993, which implements strict liability on the employer, and states how much must be paid to the employee if accidents occur.

Remedies

If the breach is material, the employee may claim damages. Provided it is a material breach, the employee may also cancel the contract of employment.

The employee may also claim specific performance. This was seldom granted in the past but is now considered an option.

Finally, the employee may refuse to work, withholding labour until the contract is performed.

Employee

Entering and remaining in service

The main obligation of the employee under the contract is to place his personal services at the disposal of his employer.

The tender of service is a prerequisite to and the corollary of the employee’s right to claim payment of wages: "no work, no pay." The reverse also applies: "no pay, no work," so that employees who have not been paid may legitimately refuse to work without breaching their contracts.

If a number of workers engage in a concerted cessation of work for the purpose of obtaining some concession from their employer, they are deemed to be on strike. Under the common law, striking workers need not be paid. The common law also allowed employers summarily to dismiss striking employees, but this has since been changed by the Labour Relations Act 1995.

Subject to the right to take such paid leave as has been agreed upon or conferred by statute, once employees have entered service, they remain obliged to render service until the contract of employment ends.

If the employee fails to render service (by desertion, absenteeism, abscondment, unpunctuality, etc.), the employer is entitled to deduct from the employee’s wage an amount proportional to the absence.

Reasonable efficiency

Employees are deemed by law to guarantee impliedly that they are capable of performing the tasks they agree to perform, and that they will carry them out with reasonable efficiency.

Where an employer seeks assurances about employees’ competence before taking them into service, the employees are bound by any representations they may make, whether those professions of competence are made by the employees themselves, or in testimonials of which they are aware.

The standard of competence employers are entitled to expect of their employees depends on the capacities in which the employees are engaged and the status and seniority accorded them.

The test for the standard of competence is that of persons comparable with the employees in question, having regard to training, experience and any special claims the employee might have made regarding his competence.

Where an employee has warranted that he possesses a particular degree of skill, he must satisfy that representation.

Furthering employer’s business interests

Employees are obliged to devote their energies and skills to furthering their employer’s business interests. They must devote all their normal working hours to the employer’s business; they may not, without the employer’s permission, simultaneously work for another employer during the hours they are contractually obliged to devote to their employer’s needs.

These duties arise because the relationship between the parties is of a fiduciary nature: Employees may not place themselves in positions where their own interests conflict with those of their employers and may not, by exercising their powers of agency, acquire interests or benefits without the knowledge of their employers.

The interests of Employees must be ''bona fide'': They may not work for another employer if its business interests are in conflict with those of the principle employer.

In the absence of a contrary provision in the contract, there is nothing to preclude employees from holding two compatible jobs, provided the second is not conducted during the working hours they are obliged to devote to the first job. Contractual provisions limiting employees’ moonlighting activities are, however, permissible.

In addition, employees may not compete with their employer’s business for their own account.

Respect and obedience

Respect and obedience are regarded as an implied duty of every employee. Absence of the former renders the interpersonal relationship between employer and employee intolerable; denial of the latter undermines the employer’s right to decide how its employees will work.

The courts require all employees to show a reasonable degree of respect and courtesy to their employers, and to obey their employers’ reasonable and lawful instructions.

Respect, being a disposition, is a quality that is difficult to define with precision. It is not to be equated with deference in a manner compatible with the subordinate position in which the employee by definition stands ''vis-à-vis'' the employer.

Mere failure on occasion to greet the employer or superiors will not place employees in breach of their obligation to show respect. Disrespect must be gross if it is to justify termination of the employment relationship, or so frequent as to suggest that the employee has repudiated the employer's lawful authority, or that it has rendered the continuation of the employment relationship "intolerable."

Each case must be considered on its own merits to establish whether these inferences may be drawn.

Unless insolence is particularly gross, the proper sanction is a written warning in the first instance.

The employee’s duty of obedience applies only to work-related orders and generally during working hours and to those orders which are lawful and reasonable.

Employees are also entitled to disobey instructions that would subject them to personal dangers not normally connected with the performance of their duties.

An order is unlawful if it requires the employee to perform an illegal act or to do something that falls outside the scope of the contractual relationship.

Refraining from misconduct generally

Any misconduct that renders the continuation of the employment relationship intolerable or unworkable, or undermines trust and confidence between employer and employee, is regarded as sufficient to justify dismissal, provided it is serious enough to offset the importance which the courts otherwise attach to the work security of employees. Examples of misconduct are insubordination, theft, fraud.

With regard to misconduct committed before the formation of the conduct (like the commission of a serious crime), the general principle is that there is no duty on prospective employees to disclose prejudicial information from their past to their future employers unless they are specifically asked to do so.

A duty may arise, however, where the non-disclosure is material and amounts to fraud. Whether or not an employee may be dismissed for non-disclosure depends on whether or not the employment relationship can reasonably be sustained after the discovery of the past misdeed.

Remedies

The employer may only dismiss the employee summarily for misconduct, incapacity or operational requirements. If damages are incurred as a result of a breach of one of these duties, the employer may claim compensation.

Basic employment rights

The Basic Conditions of Employment Act is aimed at low-income earners: those who earn less than R193,805 ''per annum''.

No matter what the contract itself says, the Basic Conditions of Employment Act is applicable as the minimum standard that must be achieved.

The Labour Relations Act 1995 deals with strikes and unions and the like; the Basic Conditions of Employment Act is a fall back option for those vulnerable workers who are not able to unionize due to various reasons, such as the kind of work they do. Domestic and farm workers are pertinent examples in the South African context.

The purpose of the Basic Conditions of Employment Act is to advance economic development by providing basic conditions of employment.

The Basic Conditions of Employment Act also contains the definition of an employee, so that issue, discussed above, is relevant here, too. The Minister is empowered to extend the provisions of the Basic Conditions of Employment Act to non-employees in specific circumstances. Even, therefore, if a domestic worker is not considered an employee in terms of the Basic Conditions of Employment Act, the Minister may extend the provisions to her for her own protection.

Minimum Wage

The employer has no discretion to pay less than the minimum wage. As noted above, the Basic Conditions of Employment Act provides the minimum standard to be achieved; employers must, at the very least, abide by the Basic Conditions of Employment Act.

Minimum wages are the result of bargaining councils in most circumstances, but some professions have no bargaining councils.

South Africa enforced the National Minimum Wage Act which sets the foundation for a living wage across South Africa.

Hours

A maximum of 45 hours per week is allowed to be worked. These stipulations (regarding hours) are not applicable on the following persons:
* a person that earns more than R211,596.30 per year; or
* a person in a senior management position; or
* Sales personnel, employees are required to travel in the performing of their duties, and people that can determine their own work hours.

Overtime

Overtime is permitted on the basis of a voluntary agreement.

Overtime is restricted to 10 hours per week or 3 hours on a day.

Payment for overtime is 1½ times the normal wage, or the equivalent paid time off.

Sundays

Payment for working on a Sunday is twice the normal wage if the employee is not expected in terms of his/her contract to work on Sundays, however if the employee is expected to work on Sundays in terms of his or her contract, the employee shall receive 1.5 times the normal wage.

Public holiday

A worker is entitled to double pay only if it is stipulated in the employee's contract that he/ she is expected to work on public holidays.

In accordance with the Public Holiday Act, an employee can exchange the day worked on a Public Holiday for another day.

Meal intervals

An employee is entitled to one hour off after 5 consecutive hours of work.

An employees meal interval can be reduced to 30 minutes by mutual consent.

Weekly rest periods

An employee is entitled to 36 consecutive hours off. Issues such as night work, holidays and public holidays are also covered.

Sick leave

An employee is entitled to 6 weeks off over a three-year period.

During the first 6 months of employment, an employee is entitled to 1 paid sick leave day for every 26 days worked.

Sick leave can only be utilised where the employee is unable to work due to illness or injury.

Maternity leave

An employee is entitled to four months off in total, the leave must start at least 4 weeks prior to the expected birth date, and end at least 6 weeks after the expected date of birth. It does not, however, stipulate that this is paid leave. In terms of the Unemployment Insurance Fund, when a woman is on maternity leave, she is entitled to Unemployment Insurance Fund benefits for half the time spent away. Usually the employer will pay the other half, but this is not required in the Basic Conditions of Employment Act.

Family-responsibility leave

If the employee has been working for more than four months, he is entitled to 3 days family-responsibility leave, as in the case where there has been a death in his/her immediate family. Furthermore, in case where the employees child is ill.

Remuneration

Employers must keep records of the hours worked and remuneration awarded for each employee for at least three years.

Employees are to be paid in South African currency at the place of work (unless this is altered in the contract).

Employers may not deduct money from employees unless prior consent in writing is obtained.

Regarding severance pay, in cases of retrenchments or dismissals for operational reasons, employees are entitled to one week’s pay for every year worked.

Variations

The Basic Conditions of Employment Act is the very minimum standard required by employers. Employers may award more, but never less, than what is stipulated.

If an employer gives more than the minimum, he may be locked into always giving more, as he must then abide by the required annual increases, which are based on a percentage of the current pay.

An employer may vary the provisions in the contract by

* individual agreement; or
* collective agreement on an industry-wide basis.

Unfair labour practices

In the past, the concept of "unfair labour practice" was broadly defined. The Industrial Court (a specialist tribunal that exercised jurisdiction over alleged unfair labour practices) took several innovative approaches. The court formulated a set of rules to govern unfair dismissals. These rules are now contained in Chapter VIII of the Labour Relations Act 1995 and in the Code of Good Practice: Dismissal.

The employment relationship has three stages:

* the beginning, when the employee is an applicant for employment;
* the middle, which continues as long as the relationship continues; and
* the end, which may take the form of dismissal, resignation or retirement.

Unfair conduct by the employer at the beginning of the relationship normally takes the form of unfair discrimination