Definition of an ‘employee’

WYETH SA (PTY) LIMITED V MANQELE & OTHERS LABOUR COURT, MAY 2003, UNREPORTED: This case concerned an application brought in terms of section 158(1)(g) of the LRA in which the employee sought to review and set aside a ruling made by the CCMA.

The company had two grounds for review:

>> The Commissioner had committed a gross irregularity in handing down a ruling where another Commissioner had heard oral submissions concerning the merits of the matter; and

>> The Commissioner arrived at an unjustifiable conclusion in ruling on the definition of an ‘employee’ in terms of section 213 of the LRA.

The second of these grounds is the more important for present purposes, because it raises the controversial issue of whether someone who has signed a contract of employment but has not yet started work is an employee for the purposes of the Labour Relations Act.

The facts of the case were briefly the following. The respondent in the case, a Mr. Manqele, was offered a position by the employer as a sales representative. The parties concluded a written contract of employment on 15 March 2000, in terms of which he was to commence work on 1 April.

Prior to Manqele beginning work, he was advised that the employer was no longer prepared to employ him. In terms of the contract of employment, Manqele had been entitled to a company vehicle. The employer believed that Manqele had made a misrepresentation as to the status of the car he had chosen, and on this basis took the view that there was no contract, since the parties had not reached consensus as to the condition of the motor vehicle stipulated in the letter of employment.

The employee and his union referred the dispute to the CCMA. The Commissioner ruled that the Manqele became an employee "the moment he accepted an offer of employment."

That was not the prevailing wisdom. In Whitehead v Woolworths (Pty) Ltd (1999) 20 ILJ 2133 (LC) the Labour Court held in that a person who is a party to a contract of employment but who has not yet commenced employment, is not an employee for the purposes of the LRA.

Section 213 of the LRA defines "employee" to mean:

"(a) any person, excluding an independent contractor, who works for another person or for the state and who receives, or is entitled to receive, any remuneration; and

(b) any other person who in any manner assists in carrying on or conducting the business of an employer, and "employed" and "employment" have meanings corresponding to that of ‘employee.’"

In the present case, the Labour Court held that a person who is an employee party to a binding contract of employment is obliged to commence work, and entitled to receive remuneration on the date that the parties agree that these respective rights and obligations will commence.

The judge found that the requirement that a person ‘work’ for another extends to include a person who is contracted to work. As a party to valid and binding contract of employment, Manqele was an ‘employee’ for the purposes of the LRA.

If a person who is a party to a contract of employment but has not commenced work is to be considered an employee for the purposes of the LRA, a number of important practical issues arise. Advising the person that he or she should not commence work would ordinarily amount to a dismissal, and the employer would be obliged to prove a fair reason and a fair procedure. If an offer of employment is made but not yet accepted, it would seem that the employer is free to withdraw the offer, since the Court extended protection only to those "contracted to work".

SOLIDARITY OBO MC CABE V SOUTH AFRICAN INSTITUTE FOR MEDICAL RESEARCH. LABOUR COURT, JULY 2003, UNREPORTED: This case raised two legal issues- when does a refusal to renew a fixed term contract constitute a dismissal, and when can it be said that a dismissal was effected on account of pregnancy?

The applicant in the case had been employed on a fixed term contract. Towards the end of her contract, certain posts were advertised, and she was encouraged to apply for one of them, for all intents and purposes the same job she had been doing. Her application was unsuccessful, and she was advised that the job had been given to "a more suitably qualified candidate".

The employee considered that her failure to be appointed to the job was directly linked to a conversation she had had with her supervisor shortly before the posts were advertised. . She had told the supervisor that she was pregnant, and the supervisor had responded by saying "now we will lose you too."

The Court found on the employee’s version (the judgment was granted by default) that she had established a reasonable expectation that she would be appointed to the fixed term contract for which she had applied, and that the employer’s refusal top appoint her constituted a "dismissal" for the purposes of the LRA.

The Court found further that the evidence suggested that the reason for refusing to renew the contract was the disclosure by the applicant of her pregnancy. She had detected a distinct "change in attitude" after making this disclosure, and it could hardly be said, held the Court, that she was unsuitable for appointment, since she had been doing the same job for 12 months, apparently to the satisfaction of the employer. At the time of her appointment, there had been no reservations about her suitability.

The applicant’s dismissal was held to be automatically unfair, and she was awarded an amount exceeding 10 months remuneration as compensation.