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Thread: Fixed term employee/rolling over contracts/independent contractor??

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    Question Fixed term employee/rolling over contracts/independent contractor??

    Please can you assist/advise me with the below issue i as well as about 25 other people are having within our company employment for years now!

    I am currently working for a large IT broker/TES which is contracted out to another global IT company's client and based at their premises. i am on a fixed term employee contract for the past 3 years which has been renewed annually(rolled over) 3 times-once it expires upon the set date a new contract is signed for another year. Prior to this we were given independent contractor contracts which were also rolled over annually 4 times(they refer to us as annual contractors).only after 3 years of disputing that initial contract about being an independent contractor which I feel we were not and not getting leave/sick leave/public holiday pay(no work no pay rule) etc and escalating the working conditions to their client where we are based, did they then make us fixed term employees and gave us leave and sick leave and public holiday pay only (no bonus/13th cheque/medical aid/pension fund etc that permanent staff get) for past 3 yrs. They continue just rolling over the contract once it expires after 1 year. After numerous attempts to be made permanent with benefits they just plain down refuse and threaten us with not renewing the contract which we are dependent on. . the client as well as other onsite contract companies have offered us permanent jobs but they have blocked it many times threatening us with action as we have clauses in our contracts saying we cant work for any other company or directly for this client.(restraint of trade) for 1 year after leaving but they refuse us permanent jobs. please help. NOTE: we do earn over the earnings threshold. i do believe we are permanent employees as we fill the same role as a permanent employee and meet all of the section 200A(1)presumption list factors. what can be done?

    We have just received a phone call now stating our contracts wont be renewed once it terminates in 1 month as the client has advised it does not want to renew the contract with the broker anymore. Another outsourced company of the client has approached us and said if we are interested we can apply for jobs with them at the same client for the same jobs but it is a new application with no guarantee of anything. the broker has said we must go register for UIF but our contracts are over and no payout/retrenchment or anything will be paid out as we are not employees but FTE's.. i feel we have been mistreated and lost 5 years of benefits and now might not have employment. please can you advise or recommend someone who is willing to take this case up. also, after rolling over the contract 8 times doesnt this create a reasonable expectation of renewal hence dismissal now as they have not renewed?
    thanks.

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    Site Caretaker Dave A's Avatar
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    Welcome to the way employment works in most of the rest of the world...



    Please pardon my cynical moment. Let me try to be more helpful.

    What I find fascinating in this particular mix is the restraint of trade. Pretty bold as brass to claim you're an independant contractor, or even a fixed period employee, and also slap you with a 1 year post employment restraint. Sounds like a rather questionable cocktail to me.

    Anyway.. what to do?
    Your contract is ending so what have you got to lose? Lodge a complaint with the CCMA. I'm sure someone will advise you through the process there and it won't cost you a cent (other than getting there).

    Good luck. And don't hesitate to give feedback. I'd love to hear how this one goes.
    The trouble with opportunity is it normally comes dressed up as work.

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    am definitely gonna do that.. will post outcome here..

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    NEO, sorry can't add any more value than Dave already has - go with what he says, but your situation does hit a whole lot of nerve centers for me.

    I'm what you would call a reluctant employer. I find it an administrative burden and a long term liability I would really prefer to do without. So I in fact do my best to avoid employing people, but relent on occasion.

    On the other hand I do realise the reality of poor, uneducated, desperate people being taken advantage of. Hence the complicated rules and procedures.

    On the one side you can have a system with only the pure independant contractor with no such thing as an employee, no long term commitment. On the other you have the employer - employee relationship with significant long term commitment and lots of rules and regulations. In SA we're very much on the latter side of the scale.

    When it gets unfair though, is when one side chooses to have the advantages of both sides of the system. Its currently a bit like that in SA for the employee. They want job security and a complex retrenchment or firing system, but then they still have the ability to walk out of a job without notice, or perhaps 30 days at most.

    In your situation (NEO), the employer is treating you as an independant contractor and then also trying to control who you do business with. He can't have his cake and eat it. We can't control who else our plumbers do business with, or our accountants, or our doctors, or our ... you get the idea. They are independant.

    So on this very rare occasion I am siding (in sympathy) with you the "employee".

    I would be very surprised if your employer could have enforced a restraint of trade against you. A confidentiality clause yes, but not restraint of trade. In any event, you are normally reimbursed for being restrained. However I'm no labour lawyer. That doesn't help you much though as that window of oportunity has now passed.

    Your issue now is trying to be declared an employee. My understanding is that once contracts with individuals start getting renewed, then the employer is on thin ice. I suspect that you could make your employers life very difficult with the CCMA. So I eagerly await for a report back on how this all turns out.

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    Dave A (08-Feb-11), Retha (08-Feb-11)

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    Full Member Retha's Avatar
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    I also want to offer you my support - while I am very much in the same position as BusFact, with unpleasant experiences of employee protection gone overboard, yours are clearly unfair treatment.
    So yes, I will also be waiting in suspence for the outcome!

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    Diamond Member adrianh's Avatar
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    Neo - getting bitten by a bit of having your cake and wanting to eat it too.

    Contractors generally earn higher salaries than their permanently employed counterparts and also get tax directives to pay only say 23% tax. I spent many years contracting and I made good money. The contact coming to an end is part of the risk you take. Seen from the employers point of view - what do you do as an outsource company if you get a 5 year contract to replace a system. You bring in contractors to do the work and when the work is done those contractors are no longer needed - you can't keep them...What to do with the highly specialized C++ microcontroller programmer when the next 5 year contract is to build a Joomla site?

    People seem to think that IT is a special place that has special rules. Look at a building project - The project manager hires various contractors and when the building is complete they all leave.
    How easily someone is offended is directly proportional to how stupid they are.
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    Hi Neo

    I think the first thing you should do is see an attorney who specialises in labour law. The fact that there are 25 people with similar issues could be a a strong point and if you so wish, all 25 can be represented by the same person, thereby potentially reducing costs.

    (P.S. it just so happens that I am an attorney, but not a labour expert. My firm does ,however, practice in that field and you are welcome to message me privately should you want further assistance.)

    but please, whatever you do, please see an attorney first, they aren't as scary as they sound!

    Fuad

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    Diamond Member AndyD's Avatar
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    I think restraint of trade agreements need to fall within very strict guidelines to even be worth the paper they're written on. In your case there's no way it will stand up in the case of a dispute. If the client does offer you a job and you accept it then the onus would be on your previous employer to take that restraint of trade clause to a court and the chances of it being upheld are very slim.
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    Diamond Member adrianh's Avatar
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    but they have blocked it many times threatening us with action as we have clauses in our contracts saying we cant work for any other company or directly for this client.
    And you happily signed the contract every year without reading the fineprint I take it?

    I don't get it, you work for a number of years and every year you accept an extension to your contract knowing full well (ok, you should know full well) the terms of that contract, yet now when the contract comes to an end you are up in arms...

    If you didn't like the terms of the contract why didn't you resign?

    Lets look at it practically, the outsource company wins a tender to write a system called eNatis. They claim that it will take a year. They bring the independent contractors in and they start coding. A year later the program is nowhere near finished. This lot carries on for 5 years and then eventually the goverment tells the outsource company to stuff off because they don't know what they are doing. The outsource company had all its contractors sign a clause stating that the contracts could end with one months notice and all the contractors accepted this. So what does the outsource company do; they give the contractors 1 month notice as per the agreement and they look for a different client. Now how complicated is that to understand?

    I don't know about the restraint of trade given that you plan to work for the existing client directly. As far as I am concerned there is no conflict of interest considering that the outsourcer is no longer involved with the client. I think that they wanted to stop you from working directly for the client whilst they were supporting the client. The reason for that would have been that they would have lost income because they wouldn't have been able to charge you out at their hourly rate (Which makes sense).

    My view is that you should organize yourself a job at the client and simply go work for them a month or two after you leave your current employer. Your existing employer would be so busy trying to save their own butts that they wouldn't care if they did find out. And as Andy said, if they want to make an issue then they are welcome to take you to court. (Which they won't bcause it serves no purpose getting involved in such nonsense when they have a new client to keep happy). I also think that you should chalk the past couple of years up to experience and learn that you have to read the fine print.
    How easily someone is offended is directly proportional to how stupid they are.
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    Hi all,
    Thanks for the advice/comments. the majority of people have agreed with my side and advised that a definite case of unfair labour practice exists due to the fact that we were incorrectly/knowingly INITIALLY labeled "independent contractors" by the company in order to avoid UIF, public holiday, sick and annual leave pay etc. we were in no way independent contractors as we were initially below the earnings threshold and met ALL conditions of section 200A of the LRA or dominant impression test..they also deducted PAYE, made us fill in timesheets and take instructions, threaten sueing us when we wanted to resign to move to another outsource company due to restraint of trade and not allow us to do any other work(its in our contract). WHEN we did challenge and threaten all of the above then ONLY did they at the last minute (out of fear of losing the contract) then make us Fixed term employees with UIF, public hol pay, annual and sick leave.(after 3 years of fighting and 5 contracts signed/rolled over). now we are FTE's and have been for 3 years or so and signed/rolled over 3 contracts as FTE's. whenever we tried to take other jobs we were threatened with legal action so we stayed on. Now the client has given the contract to the competitor onsite DUE TO THESE ISSUES of bad management.

    Adrian, with regards to your comments. i understand completely the scenario you are implying of contracting on project work. but in this case there was no project - the jobs were for ongoing daily IT support(such as desktop/network/hardware/helpdesk etc) a job that would never end upon completion of a task. also we were led on believing that we might get a permanent job if we proved ourselves as 3 other contractors got permanent jobs there! with regards to resigning we had no choice as we had no other job and were reliant on this income. remember we have signed in total 8 rolled over contracts over 6 years!! Other staff doing the exact same job were permanent staff of their outsourced company but not us with our employer. The contracts were always delayed as well between signing-sometimes up to 2 months of working we never got our new contracts due to bad management-when we questioned they would backdate it and send to us to sign. so does the expression of having their cake and eating it too actually apply to the broker? - in this case.

    I think the below article explains my dilemma perfectly:
    http://www.btimes.co.za/guide/labour/labour31.htm

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