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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 Interns & Learners: are they employees? We also discuss three new cases: The first case - a Constitutional Court case - deals with when labour courts should or should not make cost orders. In the second case the Labour Court takes issue with a CCMA award that Uber drivers should be regarded as employees. The third case is a LAC judgment which had to consider whether the non-renewal of 3 000 fixed-term contracts should have triggered a s189A retrenchment process.

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Cost orders in the labour courts

The applicant was employed as the Head of Department: Health in KwaZulu-Natal on a five year contract from 1 December 2009 to 31 July 2014. On 26 June 2014, the Premier gave notice to the applicant that he had no intention of renewing her contract upon the expiry of her term but would advertise the post. He indicated to the applicant that she could apply if she so wished.

The post was advertised and the applicant and other candidates applied. The applicant was one of the candidates interviewed for the position. The selection committee recommended that the applicant be appointed as Head of Department for a further period of five years.

In the meantime, certain allegations were levelled against the applicant by NEHAWU and the Premier decided to conduct an investigation before making a final decision on the appointment process. This necessitated an extension of the applicant's contract until 31 March 2015. During March 2015, the investigating team submitted a provisional report to the Premier and the applicant. It wanted more time to conclude the work. There were findings in the report that related to the applicant's managerial shortcomings as an accounting officer. The applicant was concerned that the Premier would rely on the provisional report and not appoint her. As a result, on 30 March 2015, a day before her contract was due to come to an end, she launched an urgent application in the Labour Court.

What followed was litigation in the Labour and Labour Appeal courts. As the applicant was unsuccessful, costs orders against her were made by these courts. The validity of these costs orders went all the way to the Constitutional Court in Zungu v Premier of the Province of KwaZulu-Natal and Others (CCT136/17) [2018] ZACC 1 (22 January 2018), where it was held that the rule of practice that costs follow the result does not apply in labour matters. Law and fairness governs the awarding of costs. As there was nothing in the present case meriting the award of costs, the Constitutional Court held that both the LAC and LC did not exercise their discretion judicially, and held that justice required that the cost orders be set aside and each party pay its own costs.

The Concourt found that in making decisions on costs orders the Labour Court should seek to strike a fair balance between, on the one hand, not unduly discouraging parties from approaching the Court and, on the other, not allowing parties with frivolous cases to abuse the court process.

Uber drivers: employees or independent contractors?

We live in times where apps on our phone can quickly find us accommodation in faraway places as well as a driver to take us to the airport in the next five minutes. Traditional ideas of employment are blurred: is the Uber driver an employee - and if so employed by whom? Is the owner of an Air B&B house an employee?

Recently the Labour Court reviewed a jurisdictional ruling by a CCMA commissioner (Uber South Africa Technological Services (Pty) Ltd Applicant and NUPSAW and SATAWU obo others (CCMA WECT12537-16, 7 July 2017), that the referring parties (who were Uber drivers) in an unfair dismissal dispute were 'employees' for the purposes of s 213 of the LRA. In this CCMA award a ruling was made against the entity 'Uber SA' in circumstances where the commissioner had earlier refused to join the international company 'Uber BV' to the proceedings. The commissioner nonetheless found, on the basis of a 'realities of the relationship test' that the referring parties were employees of Uber SA.

The Labour Court in Uber South Africa Technology Services (Pty) Ltd v National Union of Public Service and Allied Workers (NUPSAW) and Others (C449/17) [2018] ZALCCT 1 (12 January 2018) held that the referring parties had failed to discharge the onus to establish that they were employees of Uber SA. The CCMA commissioner had applied the 'realities of the relationship test' to see if someone is an employee. This test, according to the commissioner, 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'. The Labour Court said that this was inconsistent with prevailing authorities which support the 'dominant impression test'. But the review judgment did not turn on as assessment of whether Uber drivers were employees or independent contracts.

This was because the commissioner, having refused to join Uber BV, proceeded to make a ruling on a basis that conflated Uber SA and Uber BV. The facts before the commissioner disclosed that Uber SA did no more than provide administrative and marketing support to Uber BV. The Labour Court said that the commissioner's decision was incorrect and was thus reviewable.

This judgment settles that Uber drivers are not employees of Uber SA and therefore have no right to refer an unfair dismissal dispute to the CCMA as against Uber SA. Whether they are employees of the Dutch company Uber BV, is undecided.

At the moment then, the status of Uber drivers is that they are regarded as independent contractors. This may not be the answer that makes everyone happy, because when we get into an independent contractor's car we can make no assumptions about its safety, its service record or how long that day the driver has been driving. An Uber driver responds to a message on the app, not the control or supervision of an employer.

As we said at the beginning of this piece, traditional ideas of employment are being blurred by technology and new ways of working. Increasingly, challenges will be made as to whether people at 'work' should be regarded as employees under labour legislation.

Non-renewal of 3 000 fixed-term contracts: are pre-retrenchment consultations necessary?

In the light of the recent addition of s198B to the LRA dealing with fixed term contracts and their limitations, the recent LAC judgment in National Union of Metalworkers of South Africa (NUMSA) obo Members v Transnet Soc Limited and Others (PA16/2016) [2018] ZALAC 3 (25 January 2018) makes for interesting reading.

Transnet had been making use of fixed-term contracts in respect of a particular component of its workforce. These contracts were generally extended year by year. In 2014 in the Transnet Bargaining Council, Transnet concluded a collective agreement with the majority unions in its workplaces at the time, to regulate the terms and conditions of its fixed term employees. The parties to the agreement purported to bind not only themselves and the members of the union parties members, but all fixed term contract bargaining unit employees in Transnet Soc Limited including those employees who are not members of the trade union parties to the council.

3 000 out of 7 000 fixed term contracts were not renewed by Transnet. Transnet gave written notice to affected employees, informing them of the end date of their fixed term contracts and the reasons for the termination of their contracts.

On 18 March 2016, Transnet made a presentation in the Transnet Bargaining Council explaining why it would not be renewing the fixed-term contracts once they terminated by effluxion of time. The reasons it furnished were essentially financial and operational, brought about by adverse climatic and economic circumstances.

The presentation and the alleged unwillingness of Transnet to meaningfully engage with NUMSA concerning the non-renewal of the fixed-term contracts, resulted in NUMSA bringing an application in the Labour Court and in which it sought an order that Transnet was obliged to invoke the retrenchment provisions of sections 189 and /or 189A of the LRA in order to terminate these employees' contracts.

NUMSA's case was that the collective agreement was not applicable to its members, and that, accordingly, those members' employment contracts were not for a fixed, but an indefinite term; that the termination by Transnet of those contracts amounted to dismissals, and because of their number and the reasons furnished for not renewing them, the dismissals were for operational reasons, which required Transnet to comply with fair procedures as envisaged in sections 189 and 189A of the LRA. The application was one in terms of s189A(13) of the LRA, for the relief contemplated in that section.

Transnet opposed the application. It not only took the point that NUMSA had failed to prove that it had locus standi / standing (ie to show on whose behalf it was bringing the application), because of its failure to properly identify its members, but denied that NUMSA had made out a case that s189A(13) was applicable. Transnet argued that the collective agreement applied to all fixed term employees and denied that the fixed term contracts were not justifiable as contemplated in s198B(3) and (4) of the LRA.

The Labour Court dismissed Transnet's locus standi argument but held that the provisions of s189B(13) were not applicable because there were no dismissals. A case of reasonable expectation that the contracts would be renewed, as envisaged in s186(1)(b) of the LRA, had not been made out. The Labour Court dismissed the application and made no order on costs.

The LAC found that NUMSA had not shown on whose behalf it was bringing the application; nor had the union established that any of its members had been dismissed. In the circumstances NUMSA was not entitled to rely on s189A(13) of the LRA, which only applied when mass dismissals of employees for operational reasons (retrenchments) were contemplated by the employer. This was a case of fixed-term contracts expiring by effluxion of time.

Because of the facts of this case (and the way NUMSA decided to argue the matter) it is difficult to extract new principles. But the LAC confirmed that in order to find that fixed term contracts are of indefinite duration it must be shown that they were in contravention of s198B(3) of the LRA. That subsection provides that a fixed term contract may be entered into with the employee for a period in excess of three months, provided certain conditions are met. These conditions are simple: the nature of the work is of a limited or definite duration, or there is a justifiable reason for fixing the term of the contract.

We can also learn from this LAC judgment that the list of justifiable reasons for an employer concluding fixed term contracts in excess of 3 months as set out in s198B(4) is not a closed list. Furthermore, whilst s198B(7) places the onus on the employer to prove that the fixed term contracts in excess of 3 months were justifiable in terms of s198B(3) and (4), the applicant still first has to make out a case that the contracts are in breach of s198B.

ARTICLE : Interns & Learners - are they employees? By Prof Alan Rycroft

Young people in South Africa have a hard time finding work. Depending on the definition of 'unemployed', youth unemployment in South Africa is between 27% and 36%. By any measure that is a crisis and a trigger for social unrest. Worklaw has received two helpline queries recently from subscribers on the same issue: is an intern an employee and how does an employer terminate the relationship?

In this article, Prof Alan Rycroft paints the legal picture as to whether interns, learners and other similarly placed persons acquire the protection afforded employees under SA labour legislation.

Read more (note - only available to Worklaw subscribers)


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Bruce Robertson
February 2018
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