25/08/2021
a. Factors that Determine Who is an Employee and who is an Independent Contractor
South Africa’s common law recognized the distinction between a contract of service (an employer-employee relationship under which the employee subordinated his or her services to the authority of the employer – a locatio conductio operarum) and a contract for services (a principal – independent contractor relationship where the former contracts the latter to deliver certain services and there is no subordination by the contractor, who instead is answerable to the service deliverables contracted for – a locatio conductio operis). Importantly, however, South African courts will not be bound by the labels that parties chose to attach to their relationship or defer to the declared intent of the parties in this regard, whether in their contract or elsewhere. Thus, stipulating in a contract (or elsewhere) that a relationship is one between an independent contractor and principal or referring to the contract as an independent contractor or consultancy agreement, when the relationship between the principal and the contractor is, in reality, one between employee and employer, does not make the relationship any less of an employment relationship, and vice versa.
Over the years the courts have evolved various tests for distinguishing an employment relationship from an independent contractor relationship.
