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Worklaw subscribers receive a monthly newsletter containing commentary on the latest labour law cases and trends. This newsletter contains an article which looks at 'Remorse: What role should this play in the disciplinary process?' We also discuss three new cases: The first case considers whether Uber drivers are employees. The second case deals with when parties can leave an arbitration if the arbitrator does not appear. In the third case the consequences of delays in proceeding with a claim is considered.

This public newsletter is a free edited version of the subscriber newsletter.


Who is an employee in the gig economy?

The term 'gig economy' is used to describe an environment in which flexible jobs are commonplace, and companies tend toward hiring independent contractors and freelancers instead of full-time employees. The gig economy has been criticised for undermining the traditional economy of full-time workers, but at the same time it has been praised for its flexibility and potential to create extra income, new jobs and provide better service.

Uber represents the ultimate gig economy. For those who haven't taken a ride with an Uber driver, this is how it works: the service is controlled through an 'app', and drivers choose when they wish to offer their services by logging on and off the app. There is no minimum amount of time they should drive per day, week or month. Some drivers own their own vehicles and some 'partner-drivers' employ other drivers to drive their vehicles.

A rider requests a ride on the app and specifies the pick-up point. The rider is advised of the approximate fare and the estimated time of arrival. The rider receives the driver's name, a photo of the driver and the vehicle registration number. The closest driver is notified by the app of the ride requested and has the option to accept, reject or ignore the request. If the driver accepts, he/she collects the rider at the nominated pick-up point and drives the rider to the chosen destination. Through the app Uber deducts the fare from the rider's credit card (no cash changes hands), deducts its fee and pays the balance to the driver.

Each Uber driver receives a statement of income generated for the week, detailing the driving hours logged and the fares earned. Uber sets performance standards and drivers are required to maintain their ratings. From time to time, drivers are given suggestions on how to improve their ratings and they are warned if their rating starts to drop. If there is no improvement, the driver may be "deactivated" and he/she may go for top-up training to improve ratings and in this way be reactivated. Drivers' acceptance of trips is monitored and too many cancellations may also lead to deactivation.

This creative working arrangement came under scrutiny in the recent CCMA case of Uber South Africa Technological Services (Pty) Ltd v NUPSAW and SATAWU obo others (CCMA WECT12537-16, 7 July 2017). The respondents in this case were previously Uber drivers who were all "deactivated" for one reason or another, and they referred unfair dismissal disputes to the CCMA. Uber objected to the CCMA's jurisdiction in the unfair dismissal cases, claiming that the drivers were not employees of Uber but were independent contractors who had contracted their services to Uber.

The arbitrator referred to Section 213 of the LRA that defines an employee as -

  1. 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

  2. any other person who in any manner assists in carrying on or conducting the business of an employer.

The arbitrator concluded that part (b) above is broad enough to include Uber drivers, it being obvious that the drivers "assist in carrying on or conducting the business" of Uber.

Relying largely on the 'Code of Good Practice: Who is an employee?' the CCMA commissioner ruled that the drivers are employees of Uber. The arbitrator commented that the Code effectively introduces a new comprehensive test, which she referred to as the "reality of the relationship" test. This requires that, despite the form of the contract, a person deciding whether someone is an employee or an independent contractor must consider the real relationship between the parties. Item 52 of the Code states:

"Courts, tribunals and officials must determine whether a person is an employee or independent contractor based on the dominant impression gained from considering all relevant factors that emerge from an examination of the realities of the parties' relationship."

Considering various factors identified in the Code, the arbitrator noted that -

  • Drivers render personal services;
  • The relationship is indefinite, as long as the driver complies with Uber's requirements;
  • Drivers are subject to Uber's control, in that Uber controls the manner in which they work by setting clear standards and performance requirements;
  • Drivers are economically dependent on Uber.

The arbitrator ruled that even though there is no legal obligation on the part of any driver to drive any Uber registered vehicle or to use the Uber App, that driver is an employee. Under the "reality of the relationship" test, despite the form of the contract, the commissioner gave weight to the fact that the driver receives, or is entitled to receive remuneration and assists in carrying on or conducting the business of Uber. This makes the driver an employee under SA law.

The status of Uber drivers has become a contested issue in many countries and we have little doubt that this award will be taken on review.

How long must you wait for a late arbitrator?

A bargaining council scheduled an arbitration for hearing at 10:00. The employer's representatives, the employee and a union representative were in attendance. The arbitrator was not there at the appointed time. He had caused a previous arbitration to be postponed because of his unpunctuality. After 45 minutes, the arbitrator had still not arrived nor had he communicated with the parties. The employer's representatives then left the venue.

Immediately the employer's CEO directed a complaint to the SALGBC that its representatives had waited longer than 30 minutes for the arbitrator and there was no word from the Council whether a commissioner would be in attendance. The CEO also cautioned that the arbitration should not proceed in its absence.

The employee and his representative did not however leave. They waited until the arbitrator arrived at some unspecified time. The arbitrator inquired whether the employer's representative had been in attendance at the venue. On receiving a positive answer, he took the view that they had left prematurely as the arbitration had been set down for the whole day. He heard evidence and issued an award.

The employer did not seek to rescind the award in terms of section 144 of the LRA but instead launched an application to review the alleged misconduct of the arbitrator...... but did so outside the specified time limits for bringing such an application. The Labour Court refused to condone the late delivery of the review application.

On appeal to the LAC in Bloem Water Board v Nthako NO and Others (JA83/2016) [2017] ZALAC 42 (28 June 2017), the Labour Court's decision was set aside, as was the arbitrator's award. The LAC ordered the matter to be remitted to SALGBC for arbitration de novo before an arbitrator other than the first arbitrator.

Each case will depend on the facts: did the arbitrator contact the parties? Was the delay unreasonable? Did the bargaining council or CCMA step in to replace the arbitrator? - and so on. But it is clear from this case that where an arbitrator is late for a scheduled arbitration causing one of the parties to leave, the arbitrator may not continue with the arbitration with the other party on the basis that the parties were required to wait the whole day for the arbitrator to arrive.

You snooze, you lose

Almost 17 years previously, NUMSA on behalf of 17 employees, served and filed a statement of claim with the Labour Court. The claim concerned an alleged unfair dismissal from the services of the employer, Paint & Ladders, on account of its operational requirements. Paint & Ladders immediately filed its statement of response to the claim. The minutes of the pre-trial conference were filed almost three years later. A year later the matter was set down for trial but was postponed sine die in consequence of an agreement between the parties following an application for a postponement by Paint & Ladders.

The matter lay dormant for 10 years when a judge, in chambers, certified that the dispute between the parties was trial ready. Some 11 years later calculated from the date the dispute was referred to the Labour Court for adjudication, the Court issued the notice of set down of the trial for 03 August 2015.

On the morning of the trial, Paint & Ladders served a Notice of Motion in terms of Rule 11 in which it sought an order that the appellants' claim be dismissed in consequence of their failure to expeditiously and/or diligently prosecute the matter. To demonstrate that it stood to suffer prejudice caused by the inordinate delay, Paint & Ladders submitted that important witnesses had very little recollection of the matter and other witnesses' whereabouts were unknown.

The Labour Court found that the appellants took ages to prosecute each stage of the litigation and took no further steps to facilitate that their matter be set down for trial. The Court found the appellants' conduct inexcusable. The Labour Court was further of the view, regard being had to the 15 years' delay, that even with the aid of the pleadings and minutes of the retrenchment process, the witnesses' memories would be unreliable. The Labour Court concluded that Paint & Ladders made out a case for the dismissal of the appellants' statement of claim. It granted the Rule 11 application and made no order as to costs.

The LAC in National Union of Metalworkers of South Africa (NUMSA) and Others v Paint and Ladders (Pty) Ltd and Another (JA74/16) [2017] ZALAC 41 (28 June 2017) dismissed NUMSA's appeal, saying that the slovenly fashion in which the appellants went about prosecuting their alleged unfair dismissal was deserving of censure. The LAC was satisfied that the Labour Court had properly exercised its discretion to dismiss the appellants' claim for want of timeous prosecution.

What we learn from this case is this: In an application to dismiss a claim a court must assess whether on account of delay there would be any prejudice to the parties which would impede the fair determination of the issues.


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Bruce Robertson
August 2017
Copyright: Worklaw