‘Gig economy’ versus labour law

Who is an employee and who is a contractor in web work space.

The new gig economy, which is emerging globally, presents novel challenges to existing structures.

South African labour law creates extensive rights and protections for employees, but it’s sometimes difficult to determine when a person is an employee. There has always been a recognised distinction between employees and independent contractors, and the Labour Court and the CCMA have developed mechanisms for determining between the two. However, the new “gig economy”, which is emerging globally, presents novel challenges to the existing structures, not least to the fundamental question of who is an employee?

The gig economy is widely referred to as the engagement of a worker for a one-off job, or “gig”. A specific work or end-result is contracted for, the person performs the work to produce the result, and the relationship between the parties ends.

However, this overly simplistic definition can be further enhanced, into at least two broad sub-categories. For example, the International Labour Organisation this year released a paper through its Conditions of Work and Employment Series, which distinguished between “crowdwork” and “work on-demand via apps”.

Crowdworkers operate online through platforms, often across borders. Because of this, an infinite number of workers and clients are often spread over large geographic distances, while “work on-demand via apps” is platform-facilitated yet placebased and geographically limited work.

This includes delivery driving, transportation, domestic work, home repair, and more; all requiring direct interface between gig workers and those requesting gig services. The question remains, are persons who perform services to end users recognised as employees?

The Labour Relations Act (LRA) says that an employee is “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 any other person who in any manner assists in carrying on or conducting the business of an employer”. The LRA also contains rebuttable presumptions of employment, which provide that a person is rebuttable presumed to be employed if:

the manner in which the person works is subject to the control or direction of another person;

the person’s hours of work are subject to the control or direction of another person;

in the case of a person who works for an organisation, the person forms part of that organisation;

the person has worked for that other person for an average of at least 40 hours per month over the last three months;

the person is economically dependant on the other person for whom he or she works or renders services;

the person is provided with tools of trade or work equipment by the other person; or

the person only works for or renders services to one person.

In South Africa, the Labour Court has considered in principle whether persons who perform work in a “gig economy” are employees. In the case of Uber SA Technology Services vs National Union of Public Service and Allied Workers and Others 2018, the court ultimately did not have to pronounce on whether Uber drivers are employees of Uber (due to the wrong party being cited as the respondent in the matter) – but the court did indicate in principle that the LRA would be applied to determine this question.

Bradley Workman-Davies is the director at Werksmans Attorneys

The International Labour Organisation this year released a paper through its Conditions of Work and Employment Series, which distinguished between ‘crowdwork’ and ‘work on-demand via apps’.