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The Labour Relations Act applies to all employers, workers, trade unions and employers' organisations.
The other contract (Independent contractor) is a Contract for Service, and is usually a contract where the contractor undertakes to perform a specific service or task, and upon completion of the agreed service or task, or upon production of the result agreed upon, the contractor will be paid.
The law does not require you to complete a contract with your self-employed or freelance workers - a verbal contract can exist even when there is nothing in writing.
The IRS says that someone is self-employed if they meet one of these conditions:Someone who carries on a trade or business as a sole proprietor or independent contractor,A member of a partnership that carries on a trade or business, or.Someone who is otherwise in business for themselves, including part-time business.
Employees in South Africa are entitled to certain minimum employment benefits, while independent contractors are not. Subject to some exclusions, all employees are entitled to a number of statutory minimum entitlements and basic conditions of employment.
Independent contractors are self-employed workers who provide services for an organisation under a contract for services. Independent contractors are not employees and are typically highly skilled, providing their clients with specialist skills or additional capacity on an as needed basis.
The main pieces of employment legislation, chief among which are the Labour Relations Act 66 of 1995 (LRA) the Basic Conditions of Employment Act 75 of 1997 (BCEA) and the Employment Equity Act 55 of 1998 (EEA), apply to employees and not independent contractors.
Becoming an independent contractor is one of the many ways to be classified as self-employed. By definition, an independent contractor provides work or services on a contractual basis, whereas, self-employment is simply the act of earning money without operating within an employee-employer relationship.
Often Independent Contractors are completely unaware that they are not Employees as defined in South African labour legislation and therefore unprotected by labour legislation.
Since they own their own limited company, you would be dealing with the individual directly, rather than liaising with an agency. Freelancers on the other hand, always work on their own. As an employer, you reach out to them directly, you do not have to go via an agency or a vendor to hire a freelancer.