Palmer and AAA Speedy Locksmith (2005) 26 ILJ 2462 (CCMA)

Principle:
In determining whether a person is an employee or an independent contractor, a variety of factors must be considered, as set out in the leading case of SA Broadcasting Corportation v McKenzie.

Facts:
The company provided locksmith services throughout South Africa and relied on persons locally to provide the services. The applicant worked in Durban and signed an agreement with the company making him the preferred provider of services in the Durban area. He worked for the company for two hours each day and could undertake work for other companies. He determined the fees to be charged and invoiced them on the company’s invoices. He was paid a percentage of turnover. The applicant complained that he did not receive enough work and was effectively on call 24 hours each day. He demanded a basic salary. Despite negotiations, no new agreement could be reached and his services were terminated. He claimed he had been unfairly dismissed. The commissioner, after considering the test set down in previous cases, decided that the applicant was not an employee but an independent contractor. The CCMA therefore lacked jurisdiction to hear the matter.

Extract from the award:

[At para 18] In the leading case of SA Broadcasting Corportation v McKenzie (1999) 20 ILJ 585 (LAC) the court summarized the differences between an employee and an independent contractor as follows:
‘Some of the important characteristics of the contract of employment and the contract of work, respectively, are:
(a) The object of the contract of service is the rendering of personal services by the employee to the employer. The services are the object of the contract.
The object of the contract of work is the performance of a certain specified work or the production of a certain specified result.
(b) According to the contract of service the employee will typically be at the beck and call of the employer to render his personal services at the behest of the employer. The independent contractor, by way of contrast, is not obliged to perform the work by himself or to produce the result himself, unless otherwise agreed upon. He may avail himself of the labour of others as assistants or employees to perform the work or to assist him in the performance of the work.
(c) Services to be rendered in terms of a contract of service are at the disposal of the employer who may in his own discretion subject, of course, to questions of repudiation decide whether or not he wants to have them rendered. The independent contractor is bound to perform a certain specified work or produce a certain specified result within a time fixed by the contract of work or within a reasonable time where no time has been specified.
(d) The employee is subordinate to the will of the employer. He is obliged to obey lawful commands, orders or instructions of the employer who has the right of supervising and controlling him by prescribing to him what work he has to do as well as the manner in which it has to be done. The independent contractor, however, is notionally on a footing of equality with the employer. He is bound to produce in terms of his contract of work, not by the orders of the employer. He is not under the supervision or control of the employer. Nor is he under any obligation to obey any orders of the employer in regard to the manner in which the work is to be performed. The independent contractor is his own master.
(e) A contract of service is terminated by the death of the employee whereas the death of the parties to a contract of work does not necessarily terminate it.
(f) A contract of service terminates on expiration of the period of service entered into while a contract of work terminates on completion of the specified work or on production of the specified result.’

[19] The first point to note is that s 200A [of the LRA] does not apply as the applicant earns more than the amount determined by the minister in terms of s 6(3) of the Basic Conditions of Employment Act 75 of 1997.

[20] I note that the applicant has control over what in my view is a crucial factor - the invoicing of the customer; the evidence is that the applicant determines how much to charge the customer. His income is based on a percentage of the invoice, in other words he does not earn a set fee. Furthermore, other formal management control over the applicant is limited primarily because the business is based elsewhere and the applicant works in the Durban area. The contents of the contract itself suggests strongly that the applicant was in fact an independent contractor...

[21] In my view, assessing the relationship as a whole, the applicant was an independent contractor and not an employee.