VZC Inc.

The Department of Employment and Labour has appealed to employers to use the prescriptions of the Occupational Health and Safety (OHS) Act of 1993 in governing workplaces in relation to Coronavirus Disease 2019 COVID–19.

Employers have a legal duty of care towards employees, consequential it is a requirement to provide and maintain a safe working environment without risks to the health of employees. 

 Section 8(2)(b) requires steps such as may be reasonably practicable to eliminate or mitigate any hazard or potential hazard before resorting to personal protective equipment (PPE). However, in the case of COVID–19, a combination of controls is required, although the main principle is to follow the hierarchy of controls.

Before the implementation of control measures, current risk assessments need to be reviewed and updated, taking into account the new hazards posed by exposure to COVID-19 in the workplace. This is in accordance with Section 8 (2) (d) of the OHS Act.

The Department wishes to appeal to employers who have not prepared for pandemic events to prepare themselves and their workers as far in advance as possible of potentially worsening outbreak conditions. The Department advises employers to “go back to basics" by conducting hazard identification and risk assessment to determine the level of risk exposure and communicate to all workers.

The Department has developed a COVID-19 guideline. This COVID-19 planning guidance was developed based on traditional infection prevention and occupational hygiene practices. It focuses on the need for employers to implement the following:

Engineering controls 

These include:

• Isolating employees from work-related hazards,
• Installing high-efficiency air filters,
• Increasing ventilation rates in the work environment and installing physical barriers such as face shields to provide ventilation. 

Administrative controls

These controls require action by the employee and employer, including:

• Encouraging sick workers to stay at home;
• Minimising contact among workers, clients and customers by replacing face-to-face meetings with virtual communications e.g. conference calls, Skype, etc.;
• Minimising the number of workers on-site at any given time e.g. rotation or shift work;
• Discontinuing nonessential local and international travel;
• Regularly check travel advice from the Department of Health at: www.health.gov.za;
• Developing emergency communications plans, including a task team for answering workers’ concerns and internet-based communications;
• If feasible, providing workers with up-to-date education and training on Covid-19 risk factors and protective behaviours (e.g. cough etiquette and care of PPE);
• Training workers who need to use protective clothing and equipment on how to put it on, use/wear it and take it off correctly, including in the context of their current and potential duties. 

Safe Work Practices

These include:

• Procedures for safe and proper work used to reduce the duration, frequency, or intensity of exposure to a hazard.
• Provide resources and a work environment that promotes personal hygiene.
• For example, no-touch refuse bins, hand soap, alcohol-based hand rubs containing at least 70% alcohol, disinfectants, and disposable towels for workers to clean their hands and their work surfaces, regular hand washing or using of alcohol-based hand rubs, and display handwashing signs in restrooms. 

Personal Protective Equipment (PPE)

• While engineering and administrative controls are considered more effective in minimising exposure to SARS-CoV-2, PPE may also be needed to prevent certain exposures, the department said.
• Examples of PPE include: gloves, goggles, face shields, face masks, gowns, aprons, coats, overalls, hair and shoe covers and respiratory protection, when appropriate.
• Employers should check the NICD website regularly for updates about recommended PPE.

Employers and workers should use this planning guidance to help identify risk levels in workplace settings and to determine any appropriate control measures to implement. Additional guidance may be needed as COVID-19 outbreak conditions change. In the event that new information about the virus, its transmission, and impact, becomes available you may have to modify your plans accordingly.

For employers who have already planned for influenza outbreaks involving many staff members, planning for COVID-19 may involve updating plans to address the specific exposure risks, sources of exposure, routes of transmission, and other unique characteristics of respiratory infections (i.e., compared to influenza virus outbreaks).

In the case of suspected exposure contact the coronavirus hotline in South Africa: 0800 02 9999

Information obtained from the below website: 17 March 2020

http://www.labour.gov.za/department-of-employment-and-labour-unveil-guidelines-to-deal-with-covid-19-at-workplaces

People who contract the virus will have to use their paid sick leave days to recover, or to be in self-isolation. Each employee is entitled to 6 weeks (30days) paid sick leave for each 3 year cycle.

The Compensation for Occupational Injuries and Diseases Act (COIDA) states that workers are entitled to claim compensation under specific circumstances.

“Workers who are injured on duty or obtain an occupational disease can claim compensation for temporary or permanent disablement. If workers die as a result of an injury on duty, their dependants will also be entitled to claim compensation. Employers that register their employees are protected against civil claims in this regard,” reads the Act.

For any assistance in risk management and compliance feel free to contact our offices on 041-3732182 alternatively email cezanne@vanzylcronje.co.za.

Are Estate Agents Employees? 

YES, ESTATE AGENTS ARE EMPLOYEES. It has been a long-awaited change to the industry and years of disguising the true relationship between estate agents and the principal or owner of estate agencies have come to an end.

In the industry it is common practice for estate agents to have an Independent Contractor relationship with the agency they are associated with. However, this is not the correct relationship and the parties are considered employees and employers.

Our argument is in favour of Estate Agents being Employees and that they will not be considered an Independent Contractor at the CCMA or in a Court of Law if the status is challenged. Therefore, the issuing of Independent Contractor agreements does not offer enough cover for the Employer in the event of a possible dispute as the Independent Contractor agreement will be void and there will be no employment contract regulating the relationship between Employee and Employer.

The CCMA and Labour Court have adopted an approach according to which they look beyond the legal structuring of the relationship (the Independent Contractor agreement) and ascertain the true nature of the relationship. This has enabled them to reject fabricated independent contractual arrangements and focus on the ‘underlying economic realities’. This includes where it was specifically provided for in the agreement between them that it was not an employment relationship.

The Labour Court leans towards the application of the Dominant Impression test and in these cases the balance of probabilities favoured the agents. This test is favoured by the courts and considers the employment relationship as a whole, rather than concentrating on only the one factor.

As per Section 200A of the Labour Relations Act (LRA), a person who works for, or renders service to any other person is presumed to be an employee if any 1 or more of the following factors are present:

1. The manner in which the person works is subject to the control or directions of the other person.
2. The person’s hours of work are subject to the control or direction of another person.
3. The person forms part of that organization.
4. The person has worked for that other person for an average of at least 40 hours per month over the last 3 months.
5. The person is economically dependent on the other person for whom they work or renders services.
6. The person is provided with tools of trade or work equipment by the other person.
7. The person only works for or renders service to 1 person.

An employee is bound by the contract of service while an independent worker is bound by a contract for service. The employer has the responsibility and power to control over his employees, whereas for the independent contractor there is no power of control but the party requiring the services can determine the date for the work to be done.

Even if an Employee earns over the threshold (R205 433.30 per year) and is not subject to the presumption of S200A of the LRA and is subsequently not presumed to be an employee but challenges this the CCMA/ Labour Court would be required to rule on the matter and the onus would fall on the employer to prove the Independent Contractor relationship. In nearly every case it is found that an Independent Contractor is in fact an employee.

Employment contract: 

An Employment Contract is a Contract of Service where an employee renders his service to the employer usually for undetermined period of time in return for payment. The employee is subject to control and direction of the Employer as well as their work-hours, the employer dictates how and when task must be performed, and the employer provides the resources to enable those tasks to be performed etc.

Independent Contractor: 

An Independent Contractor agreement is a Contract for Service, where a contractor undertakes to perform a specific service or task and when completed the contractor gets paid. The employer dictates a specific date for completion of the task/service but does not give instructions as to what tools to use and how to go about achieving the result contracted. The Independent Contractor will decide on his own working hours, the number of hours worked, whether he/she can work for more than one agency in the same industry performing the same function and can appoint someone else to do the work to be done to achieve the result contracted. He/she does not personally have to perform the functions. An Independent Contractor agreement cannot contain any restrictions in trade, and any such restrictions are unenforceable.

Pam Goldings Properties (Pty) Ltd v Erasmus and Others (C455/07) [2009] ZALC 135; (2010) 31 ILJ 1460 (LC) (4 December 2009)

The court found that the existence of the below facts in a relationship does not prove the agreement of  an Independent Contractor valid, meaning the Independent Contractor is in fact and employee:

• The payment of commission only to the agent.
• The agency taking no disciplinary action against transgressions of the agent.
• The agent using his/her own vehicle for work purposes.
• The agent determining when, how and how much effort is put into selling properties and this is not regulated by the agency.

Peter Cooper Estates v Van Eeden and Others (PR40/2013) [2015] ZALCPE 25 (24 April 2015)

The count found that the contract between the parties, even though an Independent Contractor agreement was one of employment. The court looks at the true nature of the relationship between the parties and not the agreement entered into in determining whether there is an employee and employer relationship.

The court further found that the wording of any contract between parties is not irrelevant, but is also not determinative of the nature of the relationship.

It was further stated that Section 200A of the LRA creates the rebuttable presumption of employment provided that any ONE or more of the factors listed are present in the relationship between the parties and consequently means that if at least ONE of these factors are present an employee and employer relationship will exist. 

It was also found that being allowed to “do other work” but not allowed to engage in the selling of property for another agent does not cancel the requirement for economical dependency and thus an employee and employer relationship exist. 

Linda Erasmus Properties Enterprise (Pty) Limited v Mhlongo and Others (J1604/04) [2007] ZALC 6; [2007] 6 BLLR 530 (LC) (13 February 2007)

The court found in favour of an employee and employer relationship despite the fact that the agent was appointed as an Independent Contractor in accordance with the Estate Agent Act No 112.

It further found that the mode of payment and the non-deduction of UIF and PAYE does not tilt the balance of probabilities towards a finding of an Independent Contractor relationship, neither does the fact that the agent was not required to furnish medical certificates when off sick have this result.

It was also found that the Independent Contractor agreement was not conclusive of the true nature of the relationship and that the true nature of the relationship was one of employee and employer. 

To determine the true nature of the relationship, here are some of the questions that must be asked: 

• Estate Agents require FFC and those FFC’s are linked to a particular agency: The Estate agency (Franchisee) would have an FFC as the registered agency and the estate agent would have a FFC which specifies that they are associated to the specific estate agency. Do you hold your own trust account and have your own agency, meaning you are the owner of the agency? If your answer is no, you are not an Independent Contractor of the agency.
• Do you collect your own commission or does the estate agency collect the commission?
• Do you sign Offers to Purchase in your personal independent capacity? Or do you act in the capacity as representative of the agency authorised by the agency and not independently?
• Do you have your own employees and support structure in running your business independently or are you reliant on the agency to provide these services?
• Are you limited to obtaining listings for only one agency and/or are your listing retained by the agency if you are no longer associated with the agency?
• Do you market yourself or do you market the agency?
• Are you required to act and perform in accordance with agency standards including personal standards which include behaviour and appearances?
• Are you required to attend compulsory training?
• Are you required to attend compulsory events?
• Are you required to attend compulsory meetings?
• Do you receive payment of fees/ commission etc strictly in your personal capacity or does it get paid to a legal entity owned by yourself?
• Does the agency reserve the right to employ members of the agent directly? True Independent Contractor agreements specifically does not allow for this in for example non-circumvention agreements between employees of the Independent Contractor and the Independent Contractor.
• Does the agency prescribe your rates/fees and commission amounts? A true Independent Contractor determines their own rates and fees.
• Does the agency hold all rights, titles and interest in and to any commission which may become payable to you?
• Are you restricted in terms of trade and freedom of choice in subsequent business activities?
• Are you economically dependent on the other person for whom you work or renders services?

These are only a few questions you can ask yourself in determining if you are indeed an employee, it is not a requirement that all of these questions are answered in the positive but as little as one yes can show the existence of an employee and employer relationship.

Many estate agents are still misguided and work under the illusion of being an Independent Contractor. The industry has not come to grips with the not so new labour laws and application in the workplace.

Many estate agents are therefore employed without a valid employment contract under South African laws. To the detriment of both employee and employer the protection offered to both parties are not regulated and therefor has dire consequences.

Ask yourself is your commission as an estate agent truly secure if your relationship with the agency is not recorded and agreed to in terms of a valid contract?

The complications of the above changes to the industry are enormous in that agencies may be required to contribute towards UIF and PAYE, COID and SLD levies. Employees (Estate Agents) are entitled to the basic conditions of employment, including but not limited to paid sick leave and annual leave.

The most recent development in South Africa is the National Minimum Wage Act. Interns and agents are entitled to minimum wage. Intern wages are determined on the amount of points they have earned and their NQF level. Qualified agents are entitled to a minimum wage of R3 500.00 per month or R20 per hour. The determination of the minimum wage and the top-up of commission is a complicated matter for which a labour expert will need to be consulted.

The position does appear to be rather complicated, but with the correct advice and a positive attitude, it could be quite simple.

For any further information, or a free consultation on being compliant please contact our office on 041-3732182 alternatively email cezanne@vanzylcronje.co.za.