Labour Law Today

Labour Law: Lecture:  Notes to supplement Grogan

Main Reference: Grogan “Workplace Law”  Chapter 1

ORIGINS (pp 2- 3)

Common Law governing contracts of employment:

• Based on Roman Law
• Unskilled and even skilled labour normally performed by slaves in Roman times
• Since a slave was a “thing” in RL, there was no contract with the slave
• Professional services eg by doctors, lawyers etc governed by contract of mandate
• Hence no need for the development of a contract specifically adapted to employment requirements
• The closest analogue in RL was the contract of  letting and hiring
• Therefore the general principles of the contract of letting and hiring apply to the common-law contract of employment

Status of common Law

• Common Law prevails unless modified by statute or the Constitution (which is a statute, albeit a special kind)
• Statutory changes (either express or implied) do not affect that part of the common law to which they do not apply
• Hence that part of the common law which is not affected by statute remains in force
• Much of the common law has been changed, and is governed by statute
• Nevertheless, some parts of the Common Law concerning Labour Law have not been changed by statute and remain in force, hence the need to examine it

The position in Roman Law

• Contract of employment based on RL contract of  Letting and hiring
• Called locatio Conductio in RL
• 3 kinds LC Rei, LC Operis, LC Operarum

  Locatio Conductio Rei

• Means “the letting and hiring of a thing”
• Modern equivalent is the contract of lease
• Involves the temporary use & enjoyment of a thing for a period of time in exchange for payment (rent) without transfer of ownership
• Eg house, car, horse, academic gown, book etc
• Payment distinguishes this from “Borrowing”
• The person who allows the other to use the thing is the lessor and the one who pays to use it is the lessee
• In RL a slave was a “thing” who was owned by his/her “Master”
• Slaves could be bought and sold
• Since the humanity (“Legal Personality”, humanness, human rights) of a slave was not recognized, the slave was a captive of the master who in early RL had absolute power over all aspects of the slave’s life including the power of life and death.
• If the master wished services to be performed by his own slave he simply ordered/forced the slave to do it. There was no question of paying the slave
• If a third party wished to make use of the slave’s services he had to obtain the agreement of the master on the latter’s terms and conditions
• This would include any agreement to pay for the slave’s services
• Even if the slave was paid, any such money would automatically belong to the master (who could, if he wished, allow the slave to keep some or all of it)
• This, too, in RL was a contract of locatio conductio rei, not a contract of employment
• It was between the master of the slave and the third party, not between the slave and the third party – the slave was essentially doing the master’s bidding
• Slavery was abolished during the 1700’s to 1800’s and since that time has not formed part of our common law
• Forced labour must be distinguished from slavery since the former does not involve ownership of a person as a “thing” (although there are some similarities)
• Forced Labour is also not a contract of employment as the labourer has not agreed to it (a contract is based on the agreement of the parties to it)
• However, some pre-1994 South African statutes visiting criminal penalties on those (usually African migrant Labourers) who breached written contracts of employment could be regarded as amounting to forced labour. This is a clear departure from the common law.
• This should not be confused with the civil liability which may result from the breach of a contract, whether of employment or not

Locatio conductio operis

• Means the letting and hiring of a piece of work
• The “lessor” was the one who wanted the work done
• The idea was that the worker (“lessee”) would produce a finished piece of work
• The “lessor’s” only interest was in the finished work
• The time & manner in which the work was to be done was at the disretion of the “lessee” whose only obligation, in the absence of specific contractual terms to the contrary, was to exercise reasonable skill and diligence and to complete it within a reasonable time.
• Today, this kind of “lessee” is known as an independent contractor
• Motor technicians, plumbers and building contractors who contract with the public for their own account are common examples of independent contractors
• Remember that technicians, plumbers and masons can also be employees where they work for a business which concludes the contract.(see below)
• Such persons are not employees of the “lessor”  who wants the work done, but of the business which enters into the contract
• Because of the almost infinite variety of terms which may be incorporated into a contract, it is sometimes very difficult to distinguish between independent contractors and employees
• The Courts have always sought the real nature of the contract in such cases, rather than blindly following the name given to it by one or other of the parties (see later in the course)
• Independent contractors are not employees

Locatio Conductio operarum

• Means the letting and hiring of a person’s services
• The services of the “lessor” (person providing the services) agreed to place his/her services at the disposal of the  “lessee” for a certain period in exchange for remuneration
• The services were rendered under the control of the “lessee” who was entitled to instruct the “lessor” what services to perform, and when and where and how
• This is equivalent to the common-law contract of employment and “lessee” and “lessor” are equivalent to employer and employee respectively
• In early RL this contract only applied to menial workers (which included sculptors and artistic painters!). Professionals were not allowed to charge for their work (they were supposed to belong to the wealthy classes). In later RL they were allowed to claim an honorarium for their services. This has now fallen away and is no longer part of our common law
• Common-law contracts of employment have also been influenced by English law which terms them “contracts of service” with the parties to the contract being called “master” and “servant” respectively

NB Importance of distinguishing between the three kinds of letting and hiring

• “Labour Law” involves extensive statutory modification of the common law
• With limited exceptions, “Labour Law” only applies where there is a contract of employment (locatio conductio operarum) or a statutory “employment relationship” or some aspect connected with it. Therefore in determining whether labour law is applicable to a particular situation, one must first determine whether there is a contract of employment or some other kind of contract
• It is particularly important to determine whether the contract is one of work with an independent contractor (LC operis) or employment (LC operarum) since they can be very similar to one another and easily confused
• Furthermore, labour legislation specifically excludes independent contractors from its sphere of application
• The first step, therefore, is to determine whether a common-law contract of employment or a statutory employment relationship exists or ; if so then the labour legislation and common law relating to labour law is applicable. If a contract of employment does not exist, then, subject to statute, none of the labour legislation or common law is applicable. The laws applicable will belong to some other branch of law

SHORTCOMINGS OF THE COMMON LAW (Grogan pp3-4)

Freedom of contract and contracts of employment under the common Law : Unequal bargaining power

• S A law allows parties to bind themselves contractually by serious agreement to any undertaking whatsoever provided that it is not impossible, illegal, contra bonos mores  or contrary to public policy- see eg Pearce v Brookes  cited in Grogan p47 
• There are no “pigeonholes” into which a contract must fit. The contract might be identified ex post facto as being a specific kind of contract eg sale, lease, suretyship etc. which has specific rules.
• If it cannot be so “pigeonholed”, then it will not be regarded as null and void, but will rather be dealt with according to the general principles of contract
• This is the concept of freedom of contract which is based on the Roman-law maxim: “pacta servanda sunt” meaning that undertakings must be honoured , or that one must perform what one has agreed to do. This is enforced by the courts.
• In the context of the contract of employment this means that whatever the employee has agreed to, he/she is bound by. (the same applies to the employer)
• According to common law, it does not matter how low the wage or how long the working hours etc, if the employee has agreed, s/he is bound thereby.
• In situations where there is an oversupply of job-seekers (which is usually the case – especially in S A in unskilled and semi-skilled positions – the bulk of the work-force) this puts the employer in an inordinately powerful bargaining position
• Exploitation of labour could arise under the common law
• The employer may offer very poor or stringent working conditions and adopt a “take it or leave it” approach on the assumption that there are many others who want the particular job
• The job-seeker may then be confronted with the option of accepting unsatisfactory working conditions or starving herself and her dependants as she does not have enough bargaining power to influence the employer’s conditions offered
• The common law offers no way to combat this situation as the employer may say “I won’t agree to what the job-seeker wants and s/he won’t agree to my conditions, therefore there is no contract, and hence no job”

Unequal bargaining power of the workforce collectively