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ARTICLE · 09 DECEMBER 2011

Reality Check: The Hidden Risks Of Using Independent Contractors

The Labour Relations Act 66 of 1995 defines an employee as "any person, excluding an independent contractor who works for another person or for the State…..".

South AfricaEmployment and HR

The Labour Relations Act 66 of 1995 defines an employee as "any person, excluding an independent contractor who works for another person or for the State.....". It is clear from this definition that "independent contractors" have been specifically distinguished from "employees". Shortly after the introduction of the Labour Relations Act in 1996, and seemingly in light of this distinction drawn between independent contractors on the one hand and employees on the other, many businesses sought to avoid the complications of formal employment relationships by opting for "independent contractor" type arrangements. Typically one saw a surge of persons generally being presented with pro forma contracts that purported to transform them into self-employed enterprises. In a number of instances, some employers were even so bold as to transform, literally overnight, a significant portion of their existing employee complement into "independent service providers" who would be paid

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