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Thread: Independent Contractor or Employee? Help appreciated!

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    Question Independent Contractor or Employee? Help appreciated!

    Good-day all!

    I have been an "independent contractor" at a company in Cape Town for over 1.5 years at this point. I have been working on a "Business as Usual" project that is set to continue indefinitely. As a contractor, I have not accumulated any leave (annual, sick, study), have not been paid for any public holidays, and have not been paid any overtime after working plenty thereof.

    I have worked 8 hours a day on the same project for the duration of the contract. I use the companies equipment and may not outsource my output. I am responsible for training staff and liaising with the client, in addition to my usual work on this project. I was told 3 months ago that the company was considering hiring me on a permanent basis, but it seems this was an empty promise. I have not been contracted to bring about a certain result (i.e. contract for a project for 2 months and then call it quits on completion), rather I have been working on the same contract for over 1.5 years with no signs of ending anytime soon. As far as I can understand, these facts should allow me to fall within the definition of an employee and be entitled to the benefits listed above. I also earn under the threshold amount for the employment presumption.

    I feel that I should be entitled to my accumulated leave, unpaid public holidays and possibly PAYE tax unpaid to SARS. Also, I wondered if the company's actions, in refusing permanent employment, could lead to a claim for constructive dismissal? I have not reviewed the law in much detail in this regard, any advice from persons with experience in this field would be highly appreciated!

    Please do not hesitate to ask should you require any extra information.

    Thanks!

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    Diamond Member adrianh's Avatar
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    So do you want to be a permanent employee or a contractor - you can't have the best of both worlds simultaneously. Companies prefer to employ contractors because they are easier to get rid of.
    “Why, sometimes I've believed as many as six impossible things before breakfast.”
    ― Lewis Carroll, Alice in Wonderland

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    I would prefer to be a permanent employee. So the question is, do I fall under the definition of an employee based on the facts above? In addition to the above, the company has exercised control over our working hours / days. So I just want to know what my legal position is w.r.t my employment status, as I feel that I should be entitled to the benefits described above.

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    Diamond Member adrianh's Avatar
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    I don't think that you are entitled to any of that because you agreed to be employed as an independent contractor. If they give you the option to be a permanent employee then you are going have to eat a big hit in income. You get paid a premium as an independent contractor because those things are at your own expense. You don't get to have your cake and eat it.
    “Why, sometimes I've believed as many as six impossible things before breakfast.”
    ― Lewis Carroll, Alice in Wonderland

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    Great thanks for the advice. This problem has been resolved today, so all good. Insofar as your advice above goes, my own research seemed to indicate otherwise, but thanks nonetheless.

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    Diamond Member adrianh's Avatar
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    Quote Originally Posted by Independent Contractor View Post
    Great thanks for the advice. This problem has been resolved today, so all good. Insofar as your advice above goes, my own research seemed to indicate otherwise, but thanks nonetheless.
    All the best - I hope it all works out.
    “Why, sometimes I've believed as many as six impossible things before breakfast.”
    ― Lewis Carroll, Alice in Wonderland

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    Independent Contractor (03-Oct-19)

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    Platinum Member sterne.law@gmail.com's Avatar
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    The issue of independent contractor v employee is not new. There are a few tests, not least of which is the control test.
    Based on the original post, the inability to have someone else perform the work points to a presumption of an employment relationship.
    A true contractor (supplier) is free to use their own employees.

    The flip side, and to be considered, is what is the rate being paid. Although as contractor you may not be getting sick leave, annual leave etc, you could be getting paid a higher rate than an employee would, this being the compensation for the other side benefits.
    Anthony Sterne

    www.acumenholdings.co.za
    DISCLAIMER The above is merely a comment in discussion form and an open public arena. It does not constitute a legal opinion or professional advice in any manner or form.

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    adrianh (14-Oct-19)

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    Diamond Member adrianh's Avatar
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    Quote Originally Posted by sterne.law@gmail.com View Post
    The issue of independent contractor v employee is not new. There are a few tests, not least of which is the control test.
    Based on the original post, the inability to have someone else perform the work points to a presumption of an employment relationship.
    A true contractor (supplier) is free to use their own employees.

    The flip side, and to be considered, is what is the rate being paid. Although as contractor you may not be getting sick leave, annual leave etc, you could be getting paid a higher rate than an employee would, this being the compensation for the other side benefits.
    The term I always heard when I was contracting or employed on a permanent basis was "Cost to Company" - The companies I worked for paid all workers in those terms. When I was contracting I received a nice pay check and when I was forced to become permanently employed by the same company my "Take home cash" dropped dramatically due to the company having to foot the bill for the other expenses ....but...their "Cost to Company" remained the same.
    “Why, sometimes I've believed as many as six impossible things before breakfast.”
    ― Lewis Carroll, Alice in Wonderland

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    Diamond Member Justloadit's Avatar
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    As an independent contractor, you should be charging a much higher rate than as an employee, and should be able to cover the public holidays with the income, and going as far as even being able to take leave when you feel that it is necessary, and if the client complains, you should be able to get some one else to maintain the work going by paying them and making a profit when you are not available.

    If you are not doing this then you are being short changed and should renegotiate your terms.
    Trying to play the card that you are actually an employee may be a long road to achieve, and will definitely create animosity between you and the company in reference, to the point that they will get rid of you on any occasion that presents itself.

    Of course there is always a risk to lose what you have, but from your description of tasks performed, you are definitely in the position to negotiate.
    Under what terms are " I am responsible for training staff and liaising with the client" working under?
    What authority have you got to even make any decisions on what must be done?

    At the end of the day, being in an employed position may sound a comfortable place to be, but you are in no way guaranteed to be there indefinitely.

    If you feel differently, I suggest that you find a labour lawyer and do a consultation with him, a forum like this is no place to get advise on your particular situation.
    Victor - Knowledge is a blessing or a curse, your current circumstances make you decide!
    Solar and LED lighting solutions - www.microsolve.co.za

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