Employee Status

GN 1774 of 1 December 2006:  Code of Good Practice: Who is an Employee?

Disguised employment is a significant reality in the South African labour market and has been dealt with in a number of reported decisions. The Employment Relationship Recommendation, 2006 of the International Labour Organisation states that a “disguised employment” relationship occurs when the employer treats an individual as other than an employee in a manner that hides his or true legal status as an employee”.  It is an established principle of our law that the label attached to a contract is of no assistance where it is chosen to disguise the relationship.  A contract that designates an employee as an independent contractor, but in terms of which the employee is in a subordinate or dependent position, remains a contract of service.  In other cases, employers have claimed that a person who was formerly an employee has been “converted” into an independent contractor. If the person has previously performed the same or similar work as an employee, this is a very strong indication that he or she remains an employee. Likewise, the fact that other employees employed by the same employer, or by other employers in the same sector, to perform the same or similar work under similar conditions are classified as employees may be a factor indicating that the person is an employee.

It is consistent with the purposes of the LRA and other labour legislation to classify as employees, workers who have agreed to contracts purporting to classify them as independent contractors. The fact that a person provides services through the vehicle of a legal entity such as a company or a closed corporation does not prevent the relationship being an employment relationship covered by labour legislation. It is necessary to look beyond the legal structuring to ascertain the reality of the employment relationship and determine whether the purpose of the arrangement was to avoid labour legislation or other regulatory obligations.  However, where a person has made representations to an agency such as the SA Revenue Services that they are not an employee in order to gain tax benefits, it may be appropriate for a court or arbitrator to refuse to grant them relief on the basis that they have not instituted the proceedings with “clean hands”.

To assist with some of the answers, we published a series of newsletters based on the Code of Good Practice to assist employers in understanding this complex question. It is a fact that there are many employers - probably hundreds or even more - who hold to the notion that “he is a contractor - therefore he does not get annual leave for sick leave any other benefits.” It is a fact that they are many employers - and I repeat, probably hundreds or even more - who employ people on a contract headed “independent contractor contract of employment,” stating that “he is an independent contractor and therefore does not qualify for annual leave sick leave or any other benefits in the BCEA.”

I have said it before - and I say it again - that such employers are merely using this as an excuse to escape their obligations in terms of labour legislation, and in many cases to avoid having to provide that employee with other benefits such as pension and medical aid, which he does give to his “ permanent” employees.

Just as a matter of interest - an independent contractor cannot possibly be an employee. And an employee cannot possibly be an independent contractor. However - we now have some finality, we now have some answers, we now have legislated guidance, and I sincerely hope that what follows is going to put unscrupulous employers in their place, and will enable employees to be fairly treated.

The Code commences by setting out various guidelines, the main intention being to “promote clarity and certainty as to who is an employee for the purposes of the Labour Relations Act and other labour legislation.” Another purpose of the code is to ensure that a proper distinction is maintained between the employment relationship which is regulated by labour legislation, and independent contracting.” The preceding paragraph spells out quite clearly that an employment relationship and an independent contractor relationship are as far apart as the sun is from the earth. A further purpose is “to ensure that employees - who are in an unequal bargaining position in relation to the employer – are protected through labour law and are not deprived of those protections by contracting arrangements.” This indicates strongly that the legislature is aware that there are unscrupulous employers out there, who hide the true nature of the employment relationship in the disguise of a cleverly worded contract - thus depriving the employee of his legal right to fair treatment.

The Code further acknowledges that there does exist “a variety of employment relationships” in the labour market, including disguised employment, ambiguous employment relationships, non-standard employment, and triangular employment relationships.” Thus it is no secret, and those employers to whom such things apply will know who they are, and that they should know that their days are numbered. If the cap fits – wear it!

The code requires that any person who is interpreting or applying any of the following Acts, must take this code into account for the purpose of determining whether a particular person is an employee, in terms of the Labour Relations Act 66 of 1995 (LRA); the Basic Conditions Of Employment Act 75 of 1997 (BCEA); the Employment Equity Act 55 of 1998 (EEA); or the Skills Development Act 97 of 1998 (SDA).

It is stated further that the code should (must??) also be taken into account in determining whether persons are employees in terms of the Occupational Health and Safety Act 85 of 1993 (OHSA) ; the Compensation for Occupational Injuries and Diseases Act 130 of 1993 (COIDA) and the Unemployment Insurance Act 63 of 2001 (UIFA). It is pointed out that the definitions of an employee in the OHSA, COIDA and UIFA differ from the definitions contained in the LRA. However, the code points out that there are sufficient similarities for this code to be of considerable assistance in determining who is an employee in terms of the OHSA and COIDA.

The above is essentially what is covered in part 1 of the code. Any person applying or even interpreting those sections must take this code into account. We firstly define the term “rebuttable presumption.” A “rebuttable presumption” (Latin, praesumptio iuris tantum) in both common law and civil law (which is what we are dealing with here) is an assumption that is made that is taken to be true unless someone comes forward to contest it and prove otherwise. Most of what follows is quoted from the Code itself.

LRA: presumption as to who is an employee

The Labour Relations Act – section 200A and the BCEA – section 83A - were amended in 2002, and these amendments introduced a rebuttable presumption as to whether a person is an employee and therefore covered by the act. The section is only applicable to employees who earn less than the threshold amount determined from time to time by the Minister of Labour – presently R172 000.00per annum. On page 9 of the Code, paragraph 20, it is stated that in cases where the presumption is not applicable - because the person earns above the threshold amount - the factors listed in the presumption may be used as a guide for the purpose of determining whether a person is in reality in an employment relationship or is self-employed (independent contractor.) In this connection, the code refers to Denel (Pty) Ltd v Gerber 201 [2005] 9BLLR 849 (LAC).

A person is presumed to be an employee if any one of the 7 factors listed in the LRA – section 200A – or the BCEA section 83A - is present in the relationship between that person and the person for whom they work or to whom they render services. It must be emphasized that not all of these factors must be present – only one of them needs to be present. Subject to the earnings threshold, the presumption applies to any proceedings in terms of either the BCEA or the LRA in which a person alleges “I am an employee in terms of the LRA or BCEA”, and the other party disputes that allegation.

In order to be presumed to be an employee, any one of the following factors must be present:

1. i.the person works for or renders services to the person or entities cited in the proceedings as the employer ; and
2. ii.any one of the seven listed factors is present in their relationship with that person or entity.
   

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 contract, if any one or more of the following factors is present:

1. i.the manner in which the person works is subject to the control or direction of another person
2. ii.the persons hours of work are subject to the control or direction of another person.
3. iii.[in the case of a person who works for an organization, the person is a part of that organization
4. iv.the person has worked for that other person for an average of at least 40 hours per month over the last 3 months
5. v.the person is economically dependent on the other person for whom that person works or renders services
6. vi.the person is provided with tools of trade or work equipment by the other person; or
7. vii.the person only works for or renders services to one person.
   

As far as this “presumption” is concerned, the arbitrator in Ganga / Grassroots Entrepreneurial Development (Pty) Ltd t/a Grassroots Scape Facilities [2010] 6 BALR 644 (CCMA) had the following to say:

In legal terms, a presumption is the acceptance of a fact or state of affairs as being true and correct. There are two types of presumption, a rebuttable presumption and an irrebuttable presumption. A rebuttable presumption means that the fact or state of affairs is presumed to be true and correct until it can be proved otherwise, whereas an irrebuttable presumption is a fact or state of affairs that cannot be disproved.

The presumption assists the party that claims it. This means that if an applicant to a dispute claims to be an employee because one or more of the 7 factors mentioned in section 200A(1) of the LRA exist, the onus or burden to rebut the presumption (to disprove the presumption) rests with the other party to the dispute (the employer). The presumption will only come into effect if the person claiming to be an employee earns less than the statutory minimum prescribed in terms of the BCEA which is currently R172 00.00 per annum. On the evidence before me, the only significant remuneration that the applicant claimed to have received was the R9 000 per month paid to him between November 2008 and November 2009. The applicant alluded to his own business as “doing badly” which was why he made the decision to leave for Port Elizabeth where his family could survive on the R9 000 paid to him by the respondent.

In order to be presumed to be an employee, the applicant must demonstrate (or it must be common cause) that he renders services to the person or entity cited in the proceedings, he earns under the threshold and one or more of the seven factors listed in section 200A exist. The presumption is triggered when these three criteria are met. These factors are not however requirements for being an employee. They merely create a rebuttable presumption that a person is an employee. In other words once these three factors are met, the onus shifts to the respondent to prove on a balance of probability that the applicant is an independent contractor and not an employee in terms of the definition set out in section 213 of the LRA.

It is also worthy of mention that the presumption applies regardless of the form of the contract or the absence thereof. If the respondent fails to lead sufficient evidence, the applicant must be held to be an employee. The applicant earned R108 000 per annum which is well below the current statutory threshold which is R172 000.00 per annum. It is also clear that there was an economically dependent relationship between the respondent and the applicant. I am therefore satisfied that there is a rebuttable presumption that the applicant is an “employee”.

However, I am satisfied that while the applicant was not always under the control of the respondent but was subject to Mr Madikani’s direction in that he was, inter alia, tasked with furnishing the respondent with feedback reports. The hours that the applicant kept were subject to the control of the respondent but only to the extent that he was required to sign the register to confirm that the employees under his control reported for work. Flexible working time arrangements are however not incompatible with an employment relationship.

When the applicant required more materials/gardening supplies, the respondent would meet the costs directly. It was not mentioned in evidence that the applicant worked more than 40 hours per month over a period of at least three months, save to say that he did render his services to the respondent for a period of twelve months and there is no apparent evidence that he worked elsewhere as he was away from home and without his own transport. The applicant did not assume the financial risk attached to the work he performed for the respondent and the R9 000 per month that was paid to him was a primary source of income for him.

An important indication that a person is genuinely self-employed is that he/she retains the capacity to contract with others to work or provide services. It is common cause that the applicant did not dissolve his business interests and was not prohibited from doing so by the respondent. No evidence was led to suggest that he actually rendered his services to another while he was working for the respondent. In terms of whose tools were used for the grounds, it is common cause that the applicant made use of, both, his own as well as the respondent’s equipment to maintain the grounds. However, this provision applies regardless of whether the tools or equipment are supplied free of cost or their cost is deducted from the applicant’s earnings or the applicant is required to re-pay the cost. It is not disputed that the applicant quoted the respondent for bush cutters and mowers and the respondent approved the quote.

There is no evidence that any contract existed between the parties and the applicant was not, by implication, permitted to appoint a replacement to perform the services he was hired to perform. The applicant was singled out specifically because the respondent had had previous dealings with him and was content with the standard of his past performance. It was also evident that the contract was intended to terminate on expiry of a period of service rather than on completion of a specific result.

After considering the factors set out in section 200A as well as applying the “Dominant Impression Test”, I conclude that the applicant was, on the balance of probabilities, an employee and not an in dependent contractor.

Persons earning above the threshold of R172 000.00 per annum further do not enjoy the full protection offered by the Basic Conditions of Employment Act or the Labour Relations Act. Some sections of the BCEA do apply to these persons, others not.

Fortunately, in the case of a dispute at the CCMA, that eminent body seldom questions the status of the applicant’s relationship with the respondent, unless the respondent draws attention to the fact of the earnings threshold and it’s consequences for the applicant. A wide awake employer may submit that since the applicant is not an employee in terms of the Act, the CCMA does not have jurisdiction to conciliate or arbitrate the matter.

If an employment relationship does exist (but only needs to be proved) then such action would seem to hold little advantageous consequence for the employer, other than to buy some time.

However, if the nature of the relationship is in genuine doubt, then the nature of the relationship could be contested, perhaps to the advantage of the respondent.

There is a test that can (indeed is) applied in such cases, to determine the existence or otherwise of an employment relationship as opposed to that of the independent contractor. This is known as the “dominant impression test”, and in fact amounts to nothing more than requiring the arbitrator to arrive at a decision “on the balance of probability.” Very basically, the facts that indicate an employment relationship are listed in one column, and the facts that indicate an independent contractor (or the facts that do not indicate an employment relationship) relationship are listed in an adjacent column. The arbitrator must then weigh up the facts in both columns, and decide which list carries more weight. In other words, he must decide, on the balance of probability, which list constitutes the stronger indication of a relationship. Is the list of the employment indicators heavier than the list of independent contractor indicators?

If so, then an employment relationship exists and the dispute will fall under the jurisdiction of the CCMA (or Bargaining Council etc). If not, then the applicant is not an employee for the purposes of the Act, and the CCMA does not have jurisdiction to conciliate or arbitrate the matter. That being the case, the applicant could sue civilly for breach of contract, damages, and so on.

More about the seven factors mentioned above:

• 1.The manner in which the person works:
  

The manner in which the person works is subject to the control or direction of another person. The factor of control or direction will be present if the person is required to obey the lawful and reasonable commands, orders or instructions of the employer or the employer's personnel, as to the manner in which they are to work. In other words, the person is required to obey the work performance instructions of the employer. This requirement is present in a relationship in which a person supplies only labour, and the other party directs the manner in which he or she works. Control and direction is not present if a person is hired to perform a particular task or produce a particular product and is entitled to determine the manner in which the task is to be performed or the product produced. For example, you call in a painting contractor to repaint your office block.

You do not tell him what scaffolding to use, or how to erect the scaffolding. You do not tell him how to scrape the old paint off the walls, nor do you tell him what undercoat to apply or how many coats of paint to apply. You will probably only have a say in the choice of colour, and perhaps the type of paint that you want - matte finish, glossy finish, eggshell enamel or whatever. But apart from that, the employer will have no say over how the job is done, or the materials used.

In an employment relationship, the "employer" has the right to choose which tools, staff, raw materials, work performance specifications, etc are to be used. Furthermore a strong indicator of an employment relationship is where the "employee" is subject to the employer's disciplinary code, company policies and procedures.

• 2.The person's hours of work are subject to the control or direction of another person:

If the person's hours of work are stipulated, usually in a contract or letter of appointment and the contract permits the employer to determine the hours of work, then this will be a strong indicator of an employment relationship. The absence of stipulated hours of work in a contract will not necessarily mean that it is not a contract of employment. Sufficient control or direction may be present if the employer is entitled to determine the number of hours that the person is required to work within a specified period - per day, per week or whatever. Flexible working time arrangements are also found to be present in an employment relationship.

• 3.In the case of a person who works for an organization, the person forms part of that organization:
  

This will probably apply in respect of any employer that is a corporate entity. It would not apply for example to a person employing a domestic worker - although in such instances, the domestic worker is obviously an employee. The factor will be present if the employee's services form an integral part of the employer's organisation or operations. A person who works for or supplies services to an employer as part of conducting his own business interests does not form part of the employer's organization. Therefore, a person who, for example, has a registered close corporation (cc) and who renders services to another organization, does not form part of that other person's organization. Indications that the person operates his own business are that they bear risks such as bad workmanship, poor performance, price increases and so on. In the case of an employment relationship, the employer will typically bear these risks, and not the employee.

• 4.The person has worked for the other person for an average of at least 40 hours per month over the last three months. This is self-explanatory.
  

• 5.The person is economically dependent on the other person for whom he or she works or renders services.
  

This means that the person for whom the employee is working, is generally the sole source for the supply of work, and will be the employee’s sole source or principal source of income. Economic dependence will not normally be present if the person is genuinely self-employed or is running his/her own business. An important indicator to self-employment is that the person is free to contract with other companies or persons to do work for them or to provide services to them.

The fact that a self-employed person might only have one “client” does not necessarily mean that they are an employee of that client. If other factors are present, such as some of those mentioned, it will not necessarily form an employee-employer relationship. Part time workers - the fact that a part-time worker is able to work for another employer during those periods in which he is not working, does not change his status as an employee. The same would apply to a full-time employee who has an after–hours, supplementary income-producing job. He remains an employee of the employer.

• 6.The person is provided with the tools of trade or work equipment by the other person:

It is of no consequence whether the tools or equipment is supplied to the employee free of charge, or whether the employee pays for them. This provision includes equipment such as the provision of telephones, computers etc.

• 7.The person only works for or renders services to one person.

Obviously, this condition will not be present in the case of a self-employed person, because such a person is free to do work for or supply services to any number of other persons or organizations. Very importantly, the Code states that it is not relevant whether that work is permitted in terms of the employment relationship, or whether it involves "moonlighting" contrary to the terms of the relationship.

It is important to note that if any one (and not necessarily all) of the above factors is present, then the person is presumed to be an employee until the employer or other person proves otherwise. The employer will be required to lead evidence concerning the nature of the working relationship. When looking deeper into the rebuttable presumption, one might conclude that it is sufficient for any one of the seven listed factors to be present in the employment relationship to conclude that the applicant is an employee.

Or one might conclude that provided the contract states that “this is not a contract of employment, but is a independent contractor contract,” would be sufficient to establish that the relationship is an independent contractor arrangement. Or perhaps the contract states words like “it is acknowledged by both parties that the person is not an employee, but remains an independent contractor, notwithstanding anything to the contrary in this contract.”

Unfortunately, the Code has anticipated such happenings – and it states clearly in paragraph 16 that “a statement in a contract that the applicant is not an employee or is an independent contractor must not be taken as conclusive proof of the status of the applicant.” The Code states further that “The fact that an applicant satisfies the requirements of the presumption by establishing that one of the listed factors is present in the relationship does not establish that the applicant is an employee.” “However, the onus then falls on the “employer” to lead evidence to prove that the applicant is not an employee and that the relationship is in fact one of independent contracting.

If the respondent fails to lead satisfactory evidence, the applicant must be held to be an employee.” Thus, an employee can show that one of the seven factors applies - it is then up to the employer to lead evidence to prove that despite the existence of one of the factors, the applicant is in fact not an employee but an independent contractor. If the employer cannot prove that, then the applicant will be ruled to be an employee. From the above, it becomes obvious that there are no “grey areas” in this matter - there are definite lines that have been drawn.

Other factors to assist in distinguishing between an employee and an independent contractor

It is necessary to look beyond the legal structuring to ascertain the reality of the employment relationship, and to determine whether the purpose of the arrangement was to avoid labour legislation or other regulatory obligations. The Appellate Division has listed six factors to distinguish a contract of employment (employee) from a contract for services (independent contractor). These factors are frequently cited in judgments, but they are not a definitive listing of the differences between the two types of contract.

• 1.Rendering of personal services.
  

An employee renders personal services. An independent contractor produces a specified result. The object of a contract of employment is the provision of Labour. The object of a contract of service (Independent contractor) is to deliver a completed product. The Code informs us that the author Brassey described the difference as follows: “an employee is a person who makes over his or her capacity to produce to another; an independent contractor is a person whose commitment is the production of a given result by his or her Labour.” This definition has been approved by the Supreme Court of Appeal. The object of the contract remains one of the factors to be taken into account. To put it more simply, an employee says to the employer “I hereby offer you my labour’’ - tell me how you wish to use it. The independent contractor says “what task do you wish me to perform, and by when must it be completed?”

Therefore, a person who has been engaged to perform a specified task - to deliver a specified result - may still be classified as an employee if other aspects of the relationship indicate that the true nature of the contract is an employment relationship. This might be indicated where, for example, the ‘ independent contractor’ pays PAYE/SITE tax, and is given membership of the company medical aid and pension, a 13th cheque or performance bonus, and so on.

One of the key factors, states the code, is that in a contract of employment, the employee is required to perform the services himself in his personal capacity when required to do so by the employer. Therefore, the employee cannot send someone else to do the work, nor can he employ someone else to do the work. The employee remains at the “beck & call” of the employer.

On the other hand, an independent contractor does not necessarily need to perform the work himself - he can send his own staff to do the work, or he can employ somebody to do the work, unless the contract specifically states otherwise. Therefore, a contract that requires a contractor to perform personally does not necessarily mean that it is a contract of employment. By the same token, the fact that an employee may be permitted or required to arrange for somebody else to do the work during his absence, also does not necessarily mean that he is an independent contractor. The fact that a person is entitled to employ, or does employ, other people to assist him in performing the contractual tasks is not always inconsistent with an employment relationship, but it will be a strong indicator that the relationship is one of Independent contractor or a strong indication that the intention of the relationship was to be an independent contractor relationship.

The code states that in some sectors of the economy (it does not say which sectors) it is the practice for subcontractors to be engaged to work and is required to recruit other workers to assist them. The code states further that this requirement does not in itself exclude the subcontractors from the possibility of being classified as employees - in other words, all other factors must be considered - no single factor can be considered in isolation - it must be considered in the context of all other factors.

The courts hold that the employer has the right to determine whether or not

to require an employee to work. On the other hand, an independent contractor is bound to perform or produce a result specified by the contract. Put differently, an employee says to the employer “I am here to provide you with my labour - tell me how you wish to use that labour.”

The employer will then decide at what times he wants the employee to work, when he wants him to work, and what he wants him to do. For example, the employer would be entitled to say to the employee “I have no work for you at present - go and sit down somewhere and read a book.” Obviously in most instances the employer will still be liable to pay that employee, even if he does not require the employee to actually perform in the work.

The employer has the right of control and supervision over the employee. The employee is subject to the direction and control of the employer. The independent contractor is usually subject to his own direction and control, and not that of the employer, but obviously in terms of the specifications in the contract. Those specifications might include that the required work must have reach a certain stage of completion by the end of each day or each week. With an employee, the employer decides what work the employee would do and how he will perform that work.

With an independent contractor, the contract stipulates what work is required - and the independent contractor decides how he will perform that work, or he will perform as specified in the contract. We are informed that the right of control is a very significant indicator of an employment relationship - the greater the degree of supervision and control to be exercised, the greater the probability that the relationship is one of employment.

We are informed further that the right of control may be present even where it is not exercised. In other words, the fact that an employer does not exercise control over an employee, but allows him to work largely or entirely unsupervised, does not necessarily mean that it is an independent contractor relationship.

Usually, when an employee passes away, any contract of employment will obviously terminate. The death of an independent contractor will not necessarily terminate the contract - the employees of the independent contractor can continue to perform the work in terms of the contract. The death of the owner of a business does not necessarily mean that the business also dies. If the independent contractor is a person who has no employees, and performs all the work himself, then of course with his death the contract will also terminate because there is no one else to carry on the work in terms of that specific contract.

A contract of service - employee - terminates on the expiration of the period of service. The employee or the employer can also terminate the contract for various other reasons, such as resignation or dismissal. A fixed term contract would normally state a termination date, or a temporary contract of employment would state details of a specific event that would bring about termination of the contract, or a project contract of employment would say to that upon completion of the project, termination would occur.

A contract of work - independent contractor - terminates on completion of the relevant work or task as specified in the contract, or upon delivery of the specified and required result. This is regarded as a minor point of consideration. These six factors listed by the appellate division is not an exhaustive list, and must not be solely relied upon as the only factors to be considered in determining the nature of the relationship.

Remuneration would be another factor to be considered in determining employee status. Generally, an employee would receive a fixed salary or fixed amount, paid on the same day each month or each week, irrespective of the employees output or level of competency. The remuneration need not necessarily be a fixed amount - it could fluctuate according to commission earned, or payment for overtime worked. It may also fluctuate because of the payment of bonuses which depend on output, productivity, attendance bonuses and so on Fixed or fluctuating remuneration would not normally apply to persons who are genuinely self-employed. Membership of the employer’s pension or Provident fund, or other retirement funding facility, or medical aid is usually a strong indicator of an employee/employer relationship.

Other indicators that may be included in the contract of employment is the provision of payment in kind - such as food allowance, accommodation allowance, or even the provision of transport between the employee's place of residence and place of work. Such things will not usually be provided to an independent contractor.

Among such indicators would be the provision of daily or weekly rest periods, paid annual leave, paid sick leave, and other benefits provided for in the Basic Conditions of Employment Act, which would not normally be provided to a genuine independent contractor or self-employed person. The provision of a benefit designed to reward the employee for years of service with the employer is another strong indicator of the employer/employee relationship. The fact that that person does not receive a conventional fixed salary or wage package, or does not have the same benefits such as medical aid or pension as other employees have, cannot however, be used as the sole indicator that an employer/employee relationship does not exist.

There are times when employers do structure remuneration package in such a way that it creates the appearance or an impression that the relationship is that of an independent contractor. In such arrangements, there will always be loopholes that, combined with other factors, will prove otherwise.

1. i.The provision of training:

If an employer provides training to a person, in connection with the employer’s methods or systems, that is usually a strong indicator of an employment relationship. An employer will not normally provide training to an independent contractor. A self-employed person is responsible for ensuring his own training and for ensuring that he is competent to perform the services that he offers. As with all the other factors, the provision of training to a person does not necessarily exclude an independent contractor relationship. The provision of training cannot be used as a deciding factor in itself.

1. ii.The place of work:

This is another factor that may sometimes be taken into consideration. The fact that the person works at only one place may be an indication of an employment relationship - the fact that a person does not work only at the employers premises does not indicate the absence of an employment relationship. It is becoming more frequent these days in certain industries that employees work from home - the employer provides all the necessary computer equipment, and any other office equipment.

But the fact that the employees working from home - and very often regulating their own working hours - does not exclude the employment relationship. Factors that would point to an employment relationship in such circumstances would be that the employee is still subject to the direction and control of the employer. The determination by a court as to whether a person is an employee or an independent contractor is an important decision, and could have a dramatic effect on the person concerned. For example, if declared an independent contractor, then that person has no protection under labour legislation. The Code states that “determinations by the courts must be made based on the dominant impression gained from considering all relevant factors that emerge from an examination of the realities of the parties’ relationship.”