The pace and scale of change around the world has been unprecedented. The nature of work is changing due to the rise of contingent workers, increased demand for flexible working, changing skills requirements and talent pools. And companies are adapting their strategies to engage diverse talent and unlock future productivity, while new technologies are transforming the workplace.
Johan Botes, partner and head of the employment & compensation practice at Baker McKenzie in Johannesburg, says that the rise of the modern workforce means the traditional employment model is now only one part of a more flexible and global workforce consisting of freelancers, temporary staff, agency workers and crowd sourcing options.
This modern workforce is also evolving as the pace of technological change and need for agility increases — it is estimated that 1.3 million people are currently engaged in the “gig” economy in the UK alone, while 31 million workers in the US are predicted to be contingent by 2020.
Technological and digital advancements offer businesses many benefits, such as increased flexibility, reduced costs, reduced administrative burdens and quick access to high-level talent.
In addition, increasing numbers of highly skilled individuals have embraced freelance working and can be engaged “on the fly” to fulfil critical job functions. Indeed, the competitive business world, led by the major technology companies, doesn’t want to stop there, declaring a war on “friction”, which basically means the desire to remove any obstacles in the way of maximising customer satisfaction and operational efficiency.
The desire for a so-called “frictionless environment”, however, comes with challenges and risks. For example, there has been increasing demand on governments to close employment law loopholes and protect those working in the “gig” economy, and we are now seeing more governments taking steps to regulate and protect in this area. Whether governments will design robust legal frameworks that maintain flexibility, while ensuring individuals are protected, remains to be seen.
Botes explains that in South Africa, contract workers are presumed to be employees according to the statutory presumptions on employment, found in section 200A of the Labour Relations Act, 1995 and 83A of the Basic Conditions of Employment Act (BCEA) 1997. However, these sections only apply to employees who earn less than the earnings threshold, determined by the Minister of Labour in terms of section 6(3) of the BCEA. The existing Earnings Threshold is ZAR 205 433.30 per year
In a 2017 case, South African Broadcasting Corporation SOC Ltd v Padayachi and others, the Labour Court confirmed that the statutory presumptions on employment do not apply where the individual earns more than the earnings threshold. Absent the statutory presumption, a tribunal or court must consider the following factors when establishing the true nature of the relationship between parties: an employer’s right to supervision and control; whether the employee forms an integral part of the organisation with the employer; and the extent to which the employee was economically dependent upon the employer.
“In addition, recent amendments of the LRA show more active regulations of non-standard employment (staff employed through labour brokers and fixed-term contract employees). The local employment tribunal has seen a number of disputes arising from these statutory amendments where workers demand employment with the client of their employer, or equal treatment when compared with others doing similar work,” he notes.
“To be ready for changes in how people are employed, companies are going to need a strong internal HR compliance function in place to work with what is going to be a very different workforce that presents different risks and opportunities,” he adds.
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