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The Difference Between Employees and Independent Contractors: The Curious Case of Uber Drivers

By 8th November 2023Employment
Independent Contractors

South African human rights lawyers are preparing to institute a class action on behalf of Uber drivers in South Africa against Uber BV and Uber SA in the Johannesburg Labour Court. The purpose of the class action is to have Uber drivers declared “employees” and not independent contractors.

This follows a landmark decision in the UK Supreme Court last month, in which that court declared that Uber drivers should be legally classified as workers (employees) rather than independent contractors. South African lawyers hope for the same outcome locally as labour laws in the UK are not much different from South African labour law.

This begs the question: what is the difference between an independent contractor and an employee; and what are the benefits, if any, of being an employee as opposed to being an independent contractor?

DIFFERENCE BETWEEN AN EMPLOYEE AND AN INDEPENDENT CONTRACTOR

 According to the Labour Relations Act 66 of 1995 (the LRA), an independent contractor is a person who is paid to render a particular result or service and is not subject to the control or direction of the person to whom that result or service is being provided. Essentially, an independent contractor does the work as part of his or her own business.

An employee, on the other hand, is defined as 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 any other person who in any manner assists in carrying out the business of an employer.

Section 200A of the LRA, states that, unless proven otherwise, a person is presumed to be an employee if any one or more of the following factors are present:

  • The manner in which the person works is subject to the control or direction of another person;
  • In the case of a person who works for an organization, the person forms part of that organization;
  • The person’s work hours are subject to the control or direction of another person;
  • The person has worked for that other person or organization for an average of 40 hours per month in the last 3 (three) months;
  • The person is economically dependent on the other person to whom he/she renders services;
  • The person is provided with tools of trade or work equipment by the other person; or
  • The person only works for or renders services to one person.

ADVANTAGES OF BEING AN EMPLOYEE AS OPPOSED TO BEING AN INDEPENDENT CONTRACTOR

The LRA; the Basic Conditions of Employment Act 75 of 1977 (the BCEA) and the Employment Equity Act 55 of 1998 (the EEA) all apply to and protect only employees as defined by the LRA and not independent contractors.

Employees are entitled to certain minimum employment benefits such as standard working hours per day, compensation for overtime and leave days. Employees are further entitled to compensation for work-related injuries and disease, unemployment, and maternity benefits. They are further protected from unfair dismissal and unfair labour practices.

Independent contractors, on the other hand, are only entitled to such benefits and terms as agreed upon in terms of their independent contractor agreement.

Should you need assistance with your independent contractor agreement or employment contract our labour law experts are ready to assist, please contact us.

 

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