The distinction between a contract of employment and a contract with an independent contractor

The purpose of this treatise was to determine the distinction between the contract of service (employment) and the contract of work (independent contractor). A comprehensive literary survey was undertaken so as to establish if such a distinction does indeed exist. A logical point of departure was to study the contract of service and determine how the employment relationship is established by it. It is also necessary to establish under what circumstances a contract may be terminated and what the rights and obligations of the parties to the contract were. The contract between the parties will determine remedies to the breach of contract or applicability of labour legislation. It is also necessary to establish the definition of an employee under various statutes so as to understand what remedies exist should rights be infringed upon. Statutes considered include the Constitution of the Republic of South Africa, Labour Relations Act, Basic Conditions of Employment Act, Employment Equity Act, Unemployment Insurance Act, Compensation for Occupational Injuries and Diseases Act, Skills Development Act and the Income Tax Act. The effect of insolvency of the employer on the employee is also discussed. Outsourcing has played a major role in the emergence of the independent contractor. This phenomenon is considered from the point of the employer in terms of the reasons for choosing the option of outsourcing and the associated risks. The employee perspective is also dealt with in terms of why an employee would change his/her employment status. The various tests historically applied to determine the status of a worker is also discussed. These include the control, organisation, dominant impression and economic tests. Currently the dominant impression test is the one that is being applied to determine the employment relationship. Extensive reference was made to case law. United States of America cases are referred to with specific reference to the 20 Factor Test applied by the Internal Revenue Service. South African case law is dealt wit in terms of enforcement of Bargaining Council agreements, commission-earning persons, payment for services rendered, the intention of the parties and the identity of the true employer. The emergence of the dependent contractor is also addressed. This form of worker normally falls outside of the protection of labour legislation and social security. Amendments have been proposed to various statutes to remedy the situation in South Africa. A final aspect that is dealt with is that of vicarious liability. The applicability of this aspect lies in the liability of the employer for damages inflicted by the employee