2.1.4 Specific persons or roles
2.1.4.1 Organisation structures | 2.1.4.2 Roles in organisations | 2.1.4.3 Specific work types | 2.1.4.4 Work arrangements
Specific persons or a person undertaking a specific role are specifically mentioned in the legislation with an explanation of the conditions that must exist for them to be treated as workers.
2.1.4.1 Organisation structures
A range of employment structures have been specifically mentioned in the legislation based on how organisations are structured. Certain conditions must exist for them to be considered workers.
Self-employed/sole proprietor
A sole proprietor is the only owner of an unincorporated business and is self-employed. They cannot be considered to be working under a contract of service with their own business.
However, if they contract to another, they may be recognised as a worker or deemed to be a worker of the principal.
See: Define a worker
Self employed
Self-employed persons who conduct their own business are not deemed workers and therefore have no entitlement.
It is important to draw a distinction between persons who are self-employed and those who work for an incorporated company An incorporated company is recognised at law as a separate legal entity from its owners or shareholders. It is treated the same as a natural person and is therefore able to employ people directly and is recognised at law as the employer. An incorporated company usually has 'Limited' (Ltd) or 'Propriety Limited' (Pty Ltd) as part of its business name. they also own and control.
See: Company directors | Partnerships
Employees of sole proprietor are workers
People who work for the sole proprietor under a contract of service are workers.
See: Contract of service
Company directors
An incorporated company is recognised at law as a separate legal entity from its owners or shareholders. It is treated the same as a natural person and is therefore able to employ people directly and is recognised at law as the employer.
Compensation for self-employed incorporated company owners
The person who owns the incorporated company can be treated as a worker provided the requirements for a contract of service exist.
See: Contract of service
Directors are workers
Those responsible for controlling an incorporated company are its directors. Both working and non-working directors may be deemed workers.
Working directors who draw a wage, salary or directors fees are working under a contract of service and would therefore be workers under the legislation.
Non-working directors usually only attend board meetings or provide ad hoc consultancy advice. They can be workers under the legislation while performing their duties as directors.
Incorporated contractors
Where an incorporated company is providing services to another entity under a contract for services, the incorporated entity (the contractor) may be deemed the worker of the other entity.
See: Contractors
Partnerships
An unincorporated business might have a registered business name but is not recognised as a separate legal entity.
Owners or stakeholders in unincorporated businesses are referred to as the proprietors or partners. If there is more than one individual owner the owners are referred to as partners and the business is a partnership.
Partners are not workers
A partnership is not a separate legal entity from its partners and it therefore cannot employ the partners. Partners cannot employ each other so they are considered to be self-employed and not workers.
Employees of partners are workers
Partners can employ other people to work for them. They will be workers if they work under a contract of service.
Partners might be deemed workers
While partners cannot be workers in their own unincorporated business, they may perform work for other companies/employers and therefore may be deemed to be a worker of that employer.
See: Contractors
Trustees
A trust is an agreement or relationship whereby one or more persons (trustees) hold property or assets for others (beneficiaries). The details of the trust agreement dictate the trustee’s responsibilities, which often includes distributing income or profits from the property or assets to the beneficiaries.
A trust is not a separate legal entity so it cannot employ anyone.
Trustee can be a person or a company
The Agent needs to discover if the trustee is a natural person or an incorporated entity.
If the trustee is a natural person acting as a sole proprietor or partner in a business, they are:
- self-employed
- not a worker
- not entitled to compensation.
Employees of trustee
As a sole proprietor in an unincorporated business, a trustee may employ people to work for the business.
A trustee acting as a sole proprietor may employ:
- workers under a contract of service
- deemed workers.
See: Contract of service
If the trustee is a company
If the trustee is an incorporated company it has its own legal status. It may employ people under a contract of service as workers of the trustee company or engage deemed workers.
If the worker is a director of the incorporated trustee company the same principles apply as outlined under the heading 'Company Directors'.
See: Company directors