This question has been considered in a number of countries around the world in relation to, for example, Uber drivers, where certain drivers in California have been ruled employees inspite of Uber having ‘employed’ them as independent contractors.
So what’s the significance between the two? Well, being deemed an employment relation means that the Basic Conditions of Employment Act and Labour Relations Act apply, and you would have to register for the Skills Development Levy, Unemployed Insurance Fund, Workman’s Compensation, SITE and PAYE for example, which entails continuous monetary contributions.
Also, ending an employee’s employment is far harder than terminating an independent contractor, as the provisions of the Labour Relation Act, in so far as the procedures are concerned, such as disciplinary hearings and the like, are required to be followed in the case of dismissing an employee versus an independent contractor which normally entails issuing a simple notice of termination.
Code of Good Practice tells you who is and isn’t an employee
In South Africa, in December of 2006, the NEDLAC Code of Good Practice was released, setting out certain rules outlining when a worker will in fact be regarded as an employee.
Of particular importance in the Code is the presumption of who is an employee in terms of both the Labour Relations Act and the Basic Conditions of Employment Act.
This presumption applies to all workers if their gross earnings before any tax, pensions, medical aids and other similar payments have been deducted are below R 205 433.30 per annum.
Factors to determine who are your employees
The Code sets out seven factors to determine whether someone is in fact an employee. These factors apply regardless of the form of a contract. For example, placing a label on the relationship such as a ‘Sub-Contractor Agreement’, ‘Agency Agreement’, ‘Independent Contractor Agreement’ etc, even if recorded in the contract itself, cannot be taken as conclusive proof that that worker is an independent contractor.
In practice, if a worker can establish that one of the seven factors is present, unless the ‘employer’ can then prove otherwise, the worker is regarded as an employee.
Let’s have a look at the seven factors a little closer:
1The manner in which the person works is subject to the control or direction of another person
If a worker is subject to the demands, orders or instructions of the ‘employer’ or employer’s personnel as to the manner in which the worker is required to work, this factor is generally presumed to be present.
In contrast, this factor is not present if a person is hired to perform a task or produce a particular product and is entitled to determine himself the way in which the task is to be performed.
If the head office of the company operating a ride sharing app instructs its drivers on exact directions to take for each trip, and how they should behave and dress, this factor would most likely be present.
2The person’s hours of work are subject to the control or direction of another person
If a worker’s daily working hours or total monthly work hours are set out in a contract, this factor may indeed be present.
For example, an Independent Contractor Agreement which requires the worker to work between 9am and 5pm every weekday would certainly be indicative of this factor being present.
3 The person forms part of that organisation
For example, at a manufacturing plant, if a worker is hired to operate the machinery which performs a core function of the manufacturing plant, this factor will most likely be present.
4The person has worked for an average of 40 hours per month over the last three months
This factor is self-explanatory and is predominantly present if a worker works for a full nine-hour per day work week per month for an ‘employer’.
5The person is economically dependent on the other person
This factor is generally present if the worker is dependent on the ‘employer’ as their sole or principal source of income.
With the exception of part-time employees, the Code says that this factor won’t generally be present if a person is genuinely self-employed or still has the capacity to contract with other people to provide services.
If the driver of a ride sharing app is entirely dependent on the owners of the app as a source of income, and the driver is not discernibly self-employed or does not have the time to build up relationships with other possible ‘employers’, then this factor will in all likelihood be present.
6The person is provided with the tools of trade or work equipment by the other person
In our ride sharing example, if the employer provides the driver with the vehicle to be used, whether the vehicle is provided free of charge or not, this factor will most likely be present.
7The worker only works for or renders services to one person
A writer working for a particular blog twice a week, another blog twice per week and a news outlet once per a week, would generally be regarded as an independent contractor and not an employee.
As you can see, the lines between an employment relationship and independent contractor arrangement are often blurred and require careful navigation.
After Realising He’d Hired All The Wrong People, This Food Start-up Founder Hit Reset
JUST co-founder Josh Tetrick wanted to build a disruptive company, so he hired disruptive employees. Then he got disrupted himself.
Josh Tetrick had never run a food company, and he considered that an asset. His goal was to disrupt the food industry, so he wasn’t interested in old ways of doing things. “If you had told me when I started the company that one of the keys to success would be hiring people who are experts at going out to the Midwest to visit different warehousing partners, I would have been like, ‘Shut the fuck up,’ ” he says. Instead, as he built his startup JUST (originally called Hampton Creek), he hired outsiders like himself. It seemed to work. His first product, an egg-free mayonnaise, debuted in 2014 at Northern California Whole Foods stores and shortly thereafter was carried by thousands of Safeways and Walmarts. Demand was high.
Then lids started popping off. Labels fell off, too. The packaging was defective, and the product went from a success to a money-loser. As Tetrick scrambled, he came to a hard realisation: An entrepreneur can be too disruptive for his own good.
At the beginning, Tetrick fit a certain Silicon Valley archetype – the brash founder who celebrates inexperience. There’s a logic to it. If you want to rock an industry with fresh ideas, you can’t be bound by industry standards. And Tetrick had big ambitions. In creating animal-free versions of staples like eggs, mayonnaise, cookie dough and more, he wanted people to rethink how food is made. So he set up shop in a Bay Area garage and began hiring people he thought could make a huge impact – experts in data science and high-tech platforms.
Then came the disastrous launch. As his products lost money, he began examining the causes. There were many. His company had a terrible manufacturing contract and had picked the wrong manufacturers and warehouse partners. Its shipping process was a mess, and so was its supply chain. “Pretty much everything we should have been doing in operations we weren’t doing,” he says.
When CEOs reflect back, they often regret that they didn’t move faster to fire people who weren’t right for the company. Waiting even an extra month can drag down an organisation. Tetrick understood this. He’d hired smart people, but now he realised they were the wrong smart people. So he laid off a few and replaced them with industry vets.
“We hired a guy who gave me the most boring presentation I’ve had in the history of all interviews,” Tetrick says. “But that was great, because all he wanted to do was talk about warehousing.” Then Tetrick forced himself to step back from hiring. Rather than be in control of every decision, as he once was, he left his new industry experts to build their own team – filtering for what they thought was important, rather than what he did.
Operations team members either caught on or were replaced. Contracts were renegotiated. Supply chains were fixed. Losses shrank and disappeared.
As he watched this happen, Tetrick reconsidered his leadership. “I need to be intelligent enough to know that there’s a whole bunch of stuff I don’t know anything about,” he says. But more than that, he needed to appreciate the limits of change.
“Everything is not a revolution,” he says now. Some things can be reinvented, but others are better off embraced.
Today, Tetrick says, JUST is a growing 120-person company and is on its way to going public. That’ll be the next phase of its revolution – all thanks to some very non-revolutionary employees.
This article was originally posted here on Entrepreneur.com.
That ‘Bad’ Interviewee You Just Talked To May Be The Perfect Match For Your Job Opening
The ‘pattern matching’ that companies have long used to find the right candidate isn’t always the best strategy.
Think you’ve just conducted a bad interview? You may be mistaken.
Walking back to our office in San Francisco’s SOMA neighbourhood one recent sunny Friday afternoon, I was excited about the job interviews I had scheduled for the afternoon. While some entrepreneurs hate this task, I’ve always relished it. To me, finding like-minded individuals with the requisite skills and a passionate desire to change the world – or something “like” that – is thrilling. Right?
At least it is for me: That afternoon, I would be conducting phone interviews for our open head of sales position, a notoriously difficult role to fill, not for a lack of candidates, but rather for the challenge of weeding out the perfect candidate truly skilled at closing sales and helping to build our health-intelligence platform.
That afternoon, however, reality set in, in the form of close to ten disappointing phone calls.
Picking up my phone once more, I made my final call – to the most unlikely candidate of the bunch. And, within two minutes, I was floored: This guy was quizzing me on my knowledge of our business space. Not only that, but he was also asking about my personal relationships with competitors. Huh?
Calling around to other founders after the interview, I quickly uncovered a strong consensus based on those founders’ individual experiences: This candidate’s comments weren’t weird or unwelcome, they said. In fact, they considered the best salespeople to be the ones who quizzed them.
For me, this was the first of many unexpected interview lessons that I learned “on the fly” as a start-up founder. One of those lessons was that, in conducting job interviews and evaluating candidates, most hiring managers rely on “pattern matching” – the idea that you can identify patterns in candidates, in terms of their personal attributes and skills which align with your organisation’s mission and values.
In the age of artificial intelligence and machine learning, this practice has intensified, as pattern matching has gone high-tech. Recruiters and organisations are turning to algorithms to more accurately identify talent “matches.”
However, even with this new data analysis capability, the concept of pattern matching can break down. Here are some further lessons I’ve learned that demonstrate the fallibility of “pattern matching” and why it may be challenging to rely on it during job interviews.
1. A “bad” interviewee could be the right colleague
We often want to hire people we get along with. When a candidate can quickly and seamlessly integrate into the team, we can almost immediately leverage that collaboration for better business results. What’s more, the likelihood of conflict diminishes significantly, removing obstacles that often impede organisations when team members have contrasting values.
Finding that seamless integration can be quickly determined through an interview, where we evaluate someone for his or her skills and ability to gel with team members. Yet, even a bad interview doesn’t mean the candidate won’t be a good match.
“Sometimes, a challenging interview does not equate to a poor hire,” Simon MacGibbon, my colleague and CEO of the health-monitoring company, Myia, told me.
“You need to be able to look at the scope of the entirety of the candidate, including background interviews, reference checks and work product. Basing hiring on interviewing alone puts many companies at risk of passing over candidates with valuable skill sets and different, but complementary, personalities.”
2. Hire for attitude. Train for skills
Herb Kelleher, the legendary co-founder of Southwest Airlines, said it best in the book Nuts!: Southwest Airlines’ Crazy Recipe for Business and Personal Success: “Hire for attitude and train for skills.” This, of course, is how Southwest grew from relatively humble beginnings into one of the largest airlines in the world.
However, interviewers may be biased toward skills over attitude. Naturally, it is easier to opt for a quantifiable metric than to dig into a candidate’s personality and disposition.
Consider Michael Lewis and his book Moneyball, which recounts how professional baseball started using Sabermetrics to determine a player’s skill level and performance potential. Other industries have likewise leveraged specific metrics and assessment tools to identify the right candidates for open positions.
However, stringent metrics aren’t everything and may not always deliver the right candidates for a constantly evolving business environment. Some of the nation’s top entrepreneurs are now hiring candidates who are demonstrably adaptable and who can forge their own paths.
“When hiring, we focus on grit and fit over pedigree and expertise,” Daniel Fine, founder of Neu Brands, told me. “All are relevant and important, but when you’re building a rapidly scaling company, culture and team alignment have to be the top priority. This isn’t something I’ve always been successful with, but having learned the hard way, it’s now a focal point.”
Related: The Exit Interview
3. Interviewees who interview you know they can get a job anywhere
Going back to the example of our search for our head of sales candidate: The best candidates for a position will often interview the interviewer to learn whether they can be successful in the role. These days, they know they can go anywhere; record low unemployment works in their favour. Yet, remarkably, a lot of entrepreneurs and managers do not respond positively to this shift in power which gives talent the upper hand. Many positions go unfilled, as a result.
A 2018 research report confirmed this. Titled Talent Intelligence and Management Report, from Eightfold.ai and Harris Interactive, it compiled findings from 1,200 interviews with CEOs and found that 28 percent of positions went unfilled. Also in the study, 87 percent of CEOs and CHROs stated that they were facing at least one talent-related challenge. Employers are even giving up college-degree requirements in an attempt to widen their candidate pool.
So, the next time a candidate interviews you, in his or her job interview, you may want to think again. This person is probably more sought after than you think.
It’s time to win the right talent
It may not be a good feeling for a founder or executive to come to grips with this new reality. However, it’s also a valuable opportunity to change your interview approach and start evaluating candidates on more than experience and skills. By accepting this new shift in power, you can improve your position in the race to hire the best talent.
This article was originally posted here on Entrepreneur.com.
Looking For Talent? Here Are The Benefits Of Hiring A Graduate
Still not convinced? Below are just some of the benefits of hiring a graduate.
Finding the right talent for your company can be tricky. You have to meet and interview dozens of applicants, and in the end none of them are the right fit for your needs. But you can remedy this by hiring a graduate. Graduates might have little to no experience but they are able to bring value to the table.
In order to improve their skills, there are graduate training courses that can help them get up to speed with the corporate world, allowing them to learn about the latest trends in your industry. One of the major perks of hiring a graduate is that they will be in touch with the pulse of the generation. Still not convinced? Below are just some of the benefits of hiring a graduate.
They can offer a fresh perspective
Graduates have just recently been in touch with the younger generation and are part of the ever-evolving technological world. They also will have been raised in a world unlike yours and some of your older staff, and so will come with new and innovative ideas on how to solve business problems.
Another important fact to remember is that someone who is fresh out of university will come with a lot of “why do you do it like this” and “how does this work” questions. This will force your company to explain your inner workings to them but also to take a look at established practices with fresh eyes. This could cause you to bring about more efficient ways of working, which is beneficial to all of your employees and your bottom line.
They are comfortable with new technology
If there is one thing that today’s generation is comfortable with, it is technology. And this is true of all graduates, which is a major benefit for your company. They will be able to navigate through new technology such as the innovations in computers and how these apply to your company.
Having employees who are able to operate and understand new software and technology is beneficial because they will be more comfortable with working online than some of your older employees. They can also teach other employees how to use this new technology successfully. Skills development training courses will equip graduates with the skills needed to function in the workplace but their own generational knowledge of computers and technology will enable them to learn quicker than others.
They are able to adapt
You will be giving a graduate their very first job, which means that they will be willing and able to adapt to your requirements. Not only this, but new graduates are more open-minded and can adapt to any situation easily and often are more willing to take on more work and opportunities.
This does not mean that you should be giving them 60 hour working weeks, simply that they will likely be more open to work extra hours and embrace opportunities to learn more in the company. Their adaptability is beneficial for industries such as technology and marketing, where everything is constantly in flux and businesses need to be able to change with the times. If they have been on any skills development training courses, adaptability will become second nature to any graduate.
They offer more potential
One of the benefits of hiring graduates is that they have more potential. This could be anything from a secondary skill that could benefit a department in your company to pure enthusiasm for their role which brings in new and creative thinking.
While experience is necessary for some sectors, a recent graduate offers potential in a unique way. They will be coming into your company without any preconceived notions about the industry and what their role should entail. And this means that they can learn and develop on the job while also bringing fresh and exciting ideas to the table. Their potential as your employee is only just beginning and you can help to shape their career trajectory and help them to reach their goals.
They already have soft skills
Because graduates spend so many years researching and writing, they will already have developed the soft skills that they need for the working world. These skills include effective communication, time-management, the ability to problem-solve and to analyse data.
This will save you both time and money because you will not have to train new employees. You could send them on courses so they become familiar with adapting to a business environment and to help them develop the skills they already have. Graduates are often highly organised and are used to taking direction, so you will be able to guide them to work in the right way to fit your company.
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