A recent Labour Court judgment applied the dominant impression test to establish whether a radio DJ was an employee of the SABC or an independent contractor. The Court concluded that the DJ was not an employee and serves to remind employers and individuals that the contractual terms of a contract are not the only factor considered by our courts when determining the status of a person as an employee or independent contractor.
Only workers classified as employees are entitled to certain protections under the Labour Relations Act 66 of 1995 (LRA) and the Basic Conditions of Employment Act 75 of 1997 (BCEA). For an individual to claim unfair dismissal, discrimination or dispute the fairness of an employer's labour practices, they must fall within the definition of an 'employee'. The distinction between an independent contractor and an employee is recognised in our common law: an employee undertakes to render personal services to an employer, while an independent contractor undertakes to perform certain specified work or produce a certain specified result.
In Goliath v SA Broadcasting Corporation SOC Ltd and Others 1 , the Labour Court in a review application assessed whether a jurisdictional ruling that no employment relationship existed between the DJ and the South African Broadcasting Corporation SOC Ltd (SABC) was correct.
The DJ had worked for the SABC as an on-air presenter of ‘The Nigel Pierce show’ on Radio Good Hope FM (the Station). The show ran for three hours a day over a five-day week, and he was paid an hourly rate for the time it was on air. The DJ had concluded successive contracts with the SABC since 1 July 2004. At the end of March 2019, his contract was terminated before the expiry date. The DJ referred an alleged unfair dismissal dispute to the CCMA. Before arbitrating the dispute, the CCMA had to decide whether the DJ was an employee of the SABC to establish if it had jurisdiction to hear the matter.
The CCMA commissioner considered the terms of the contracts entered into by the DJ, which emphasized that he was an independent contractor and not an employee as well as the actual relationship between the parties. Having considered these factors, the CCMA commissioner found that the DJ failed to prove he was an employee of the SABC. Consequently, the CCMA had no jurisdiction in this dispute.
On review, the Labour Court applied the dominant impression test established in State Information Technology Agency (Pty) Ltd (2008) 29 ILJ 2234 (LAC) to determine whether the DJ was an employee or an independent contractor. The dominant impression test concentrates on three aspects:
- the employer's right to supervision and control;
- whether the employee forms an integral part of the employer's organisation; and
- the extent to which the employee is economically dependent on the employer.
The Labour Court also considered the terms of the agreement to determine whether they sought to disguise an employment relationship as an independent contractor relationship. When a court is called to determine whether a person is an employee, it must determine the true and real position. In other words, the court must not decide the matter exclusively based on the agreement between the parties. This is not to say that the contract between the parties must be disregarded.
While there were instances where the Station intervened in the programmes presented by the DJ, these occasions were infrequent, and the DJ remained free to determine the content of his programmes without supervision.
The DJ contended that having been at the Station for 15 years, he had been an integral part of the Station's organisation. He also used the Station's email address, he had branded clothing and used the technical infrastructure provided by the Station. The court found that these were reasonable ancillary tools for him to host the show for which he was contracted and were not evidence that he was an employee of the SABC. In addition, the DJ did not receive the benefits that employees of the SABC were entitled to.
The court noted that, even if the DJ was an integral part of the Station, he was free to pursue other non-competitive commercial interests independently. The DJ was not in the position of someone performing low-skilled work for little remuneration, whose ability to earn a living depended on devoting a significant part of the day to providing the contracted service. The court also considered that the DJ had only given up his ability to work in competition with the Station and was permitted to pursue other non-competitive work outside his broadcasting hours. On this basis, the court found that he retained a significant degree of economic independence to pursue other work.
Apart from the agreement providing that the DJ was an independent contractor, it required him to perform certain specified work or produce a certain specified result within a time fixed by the agreement. The DJ did not have to obey the orders of the Station. The agreement recognised the DJ's right to market himself independently of the Station. The SABC could not use the normal disciplinary process to rectify any unacceptable conduct or poor performance on the part of the DJ. The court also considered that the parties had annually re-affirmed the relationship between them as an independent contractor relationship. Interestingly, the court also pointed out that the DJ had knowledge of labour law (given his LLB and LLM Labour Law qualifications). Despite his legal knowledge, the DJ had never attempted to reserve his rights to dispute the contractual relationship. The court found that the agreement between the parties always envisaged the DJ as an independent contractor.
The court, having analysed the salient factors, was satisfied that the DJ was not an employee but an independent contractor. Consequently, the Labour Court found that the CCMA commissioner was correct in her finding that she had no jurisdiction to entertain the unfair dismissal claim.
This judgment reaffirms the test set out by State Information Technology Agency (Pty) Ltd. It reminds employers and individuals that the contractual terms of a contract are not the only factor considered by our courts when determining the status of a person as an employee or independent contractor. Employers must be careful to ensure that there is a clear distinction in the way employees and independent contractors are treated when providing services.
Written by Mpumelelo Nxumalo, Siya Ngcamu, Nonjabulo Mthembu; Webber Wentzel