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When is an Employee an Employee ? (Apr'2013)
Trying to determine when a person is an employee can be complicated. This is because an employee is defined differently in terms of the various Acts, and if an emplyee ito. one Act, not necessarily an Employee in terms of another Act.
This page attempts to summarize who or what an employee is ito. the various Acts.
INCOME TAX ACT (IT Act)
(with specific reference to the 4th Schedule iro. deduction of PAYE and UIF tax)
- An employee for PAYE Tax purposes is defined as.....
+A natural person who receives remuneration or to whom remuneration accrues.
+A person (including a company) who receives remuneration or to whom remuneration accrues by reason of services rendered by such person to or on behalf of a labour broker.
+A labour broker
+A person or class or category of persons whom the Minister of Finance by notice in the Government Gazette declares to be an employee.
+A Personal Service .... Company or Trust.
+A director of a private company.
- An employee for UIF Tax purposes is defined as ...... any natural person who receives any remuneration or to whom remuneration accrues in respect of services rendered or to be rendered by that person.
Only an INDEPENDENT CONTRACTOR and an EXCEMPTED LABOUR BROKER (as defined by the IT Act) is excluded from the definition of EMPLOYEE, and need PAYE or UIF Tax not be deducted
BASIC CONDITIONS OF EMPLOYMENT ACT (BCE Act)
Ch.1) Definitions, purpose and application of the Act
a)Any person (excluding an Independent Contractor), who works for another person or for the State, and who receives, or is entitled to receive remuneration.
b) any other person who in any manner assists in carrying on or conducting the business of an employer.....
Ch. 2) Regulation of Working Time
Sec.6) Application of this Chapter
6.1) This Chapter, except section 7, does not apply to ...
6.1.a) senior managerial employees.
6.1.b) employees engaged as sales staff who travel to the premises of customers and who regulate their own hours of work
6.1.c) employees who work less than 24 hours a month for an employer.
6.3) The Minister must .... make a determination that excludes the application of this Chapter or any provision of it to any category of employees earning in excess of an amount stated.
Sections not applicable to above categories of employees, are .....
8) Interpretation of day; 9) Ordinary hours of work; 10) Overtime; 11) Compressed working week; 12) Averaging of hours of work; 13) Determination of hours of work by Minister; 14) Meal intervals; 15) Daily and weekly rest period; 16) Pay for work on Sundays; 17) Night work; 18) Public Holidays.
Sec.83A) Presumption as to who is an employee
(1) A person who works for, or renders services to, any other person is presumed, until the contrary is proved, to be an employee, regardless of the form of the contract, if any one or more of the following factors is present:
(a) the manner in which the person works is subject to the control or direction of another person;
(b) the person's hours of work are subject to the control or direction of another person;
(c) in the case of a person who works for an organisation, the person is a part of that organisation;
(d) the person has worked for that other person for an average of at least 40 hours per month over the last three months;
(e) the person is economically dependent on the other person for whom that person works or renders services;
(f) the person is provided with tools of trade or work equipment by the other person; or
(g) the person only works for or renders services to one person
(2) Subsection (1) does not apply to any person who earns in excess of the amount determined by the Minister in terms of section 6(3).
(3) If a proposed or existing work arrangement involves persons who earn amounts equal to or below the amounts determined by the Minister in terms of section 6(3), any of the contracting parties may approach the CCMA for an advisory award about whether the persons involved in the arrangement are employees.
- If a person falls in the categories described by Sec 6.1 OR earns above the thershold specified by the Minister, then Sec's 6 & 83A do not apply
- If a person is an Independent Contractor, then the whole BCE Act does not apply
LABOUR RELATIONS ACT (LR Act)
The Labour Relations Act provides various definitions of an "employee."
- Sec.213, which is a duplicate of the definition in the BCE Act Sec.1
- Sec.200A, which is a duplicate of the definition in the BCE Act Sec.83A
- Section 78, but is only applicable to Chapter 5 in respect of the subject on Workplace Forums.
OCCUPATIONAL HEALTH & SAFETY ACT (OHS Act)
"employee" means, subject to the provisions of subsection (2), any person who is employed by or works for an employer and who receives or is entitled to receive any remuneration or who works under the direction or supervision of an employer or any other person.
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Pierre Leon Myburgh