The Common Law Spouse – Does he (or she) exist?

Many people who live together, have decided that they do not need to formalise their relationship with marriage.

There, may, however, be troubles ahead and the “I don’t need a piece of paper or a ring” could cost couples dearly in any break-up, or death. It is all down to the erroneous concept of the “common law spouse” – a figment of the imagination, and something that doesn’t exist.

Today, parties are either married, or they are not.

Marriage carries with it many rights (an obligations) but marriage also carries with it certain financial benefits.

Recently, in the Constitutional case of Volks v Robinson, the court held that unmarried couples in a permanent relationship are not entitled to the rights that married couples would have. In the case before the Judges, they had to decide whether unmarried persons who lived together were entitled to the same rights and duties as married people. They held that such heterosexual unions did not have the same rights as married persons and the court held that it was reasonable for legislation to differentiate between married persons and unmarried heterosexual couples for the purposes of conferring benefits that usually arise out of marriage.

Thus, if you are entitled as a married person – to benefits accorded to married people, you may not have the same rights if you are not married.

If you are not married – you cannot claim the rights due to a “married person”.
A “common law” spouse, will not be entitled to many of the rights of a properly married spouse, insofar as rights of inheritance, matrimonial rights and so on. For example, a man who lives with a woman without being married to her, would not receive any benefit from her estate if she were to die intestate. The parties could of course bequeath their respective estates to each other, but this forms the subject of a separate debate.

There is, of course, section 37C of the Pension Funds Act. This is the section which takes care of “dependants” of the deceased member. Where parties live together in a heterosexual relationship, and do not marry each other, the surviving partner would be entitled to claim some benefit of the death benefit. This however is not on the basis of a “common law” marriage, but is based on the survivor being “dependant” on the deceased member.

There are two Adjudicator determinations which offer some guidance to trustees on the rights of “common law” spouses.

The first one is Maritz v Absa Group Pension Fund. In this case, there was a “spouse’s” pension payable on the death of the member. The fund rules excluded the surviving life partner, on the basis that she was not married to the member at the time of his death. The Adjudicator held that she was not entitled to succeed in claiming a spouse’s pension. The Adjudicator followed the decision in Volks v Robinson. If the woman had been married to the deceased she would have been in a position to benefit and she would have been paid a spouse’s pension.

The second determination is Van der Merwe and Another v Central Retirement Fund and Another. In this case, the Adjudicator had to decide whether an unmarried partner could be accommodated under any of the categories of “dependant”. Under the Volks v Robinson ruling he held that the surviving spouse did not qualify as a “spouse” under the definition of dependant, (she was not properly married) and neither did that surviving partner qualify factually as a dependant. She was in fact not dependant on her partner.

It must be borne in mind, that if the surviving partner in the Van der Merwe case, was a women who stayed at home, did not earn any money, and looked after the common home, cared for the deceased member and earned no income – on the death of the member she would most certainly be entitled to receive some benefit because she was factually dependant on the deceased for maintenance and support during his lifetime.

Where Married couples live apart

The situation of married couples who live apart, also raises interesting questions.

Where a spouse is separated from his or her partner but not yet divorced, that partner would have all the rights and duties of a person still married and living together with that partner. If the rules of a fund provided for a spouse’s pension with no qualification, that spouse would obtain the monthly annuity even though he or she did not live with the deceased member.

Divorce finally ends that bond, but until the parties are legally divorced, and the court has granted a final order of divorce, the spouse remains a “spouse” and that person will benefit where the fund has a spouse’s benefit incorporated into the rules.

It is important, therefore, for parties who are married, to update their beneficiary nomination forms and make provision for those partners who they would leave behind. The nominated beneficiary would have slightly stronger rights if there are no other dependants, but where there are other dependants then the nominee’s claim will be considered together with those of the other dependants .

It is important for members to update beneficiary nomination forms to ensure their partners are named as nominees and are guaranteed the right to be considered for a share of the benefits or, are guaranteed the benefit itself if there are no dependants.

Trustees might also have the duty of advising their members of the implications of not nominating their lifelong partners as nominated beneficiaries, and not leaving those partners to await their fate at the hands of the trustees and other dependants.

Protected Disclosure of information

TSHISHONGA v MINISTER OF JUSTICE & CONSTITUTIONAL DEVELOPMENT & ANOTHER JR898/2004– case note.

This is the judgment on a point in limine raised where the Labour Court had to decide whether or not it was bound by the findings of the preceding disciplinary enquiry.

Background:

The Applicant in the matter is the deputy director-general of the Department of Justice and Constitutional Development. He was suspended on charges of misconduct for making disclosures to the media. At the disciplinary hearing it was determined that the Applicant had made protected disclosures and as a result could not suffer any occupational detriments for making the said disclosures.

Argument:

The Applicant argued that the findings of the disciplinary hearing could not be challenged by the Respondent and that the Respondent was accordingly bound to those findings. The Respondent on the other hand contended that they were neither entitled nor obliged to review a decision of an internal disciplinary enquiry and further that they were not bound, for the purposes of the trial, by the findings of the enquiry.

Judgment

The court held that the record of the disciplinary enquiry itself is only relevant as evidentiary material. It can thus be used for the purposes of cross-examination and to asses the credibility of witnesses as well as the cogency of the respective versions of the parties.

In terms of s4 of the Public Disclosures Act, an occupational detriment short of dismissal is deemed to be an unfair labour practice and any dispute in relation thereto must follow the procedure set out in the LRA and may be referred to the Labour Court for adjudication, which will be a trial de novo. On this basis, the Labour Court cannot be bound by the results of the preceding disciplinary enquiry.

In obiter, Musi J stated: “In my view, a different approach may have been called for had the applicant formulated his claim differently. Such would have been the case for instance, if he had sought from the Court an order compelling the Respondent to pay him the salary he would have earned for the duration of the suspension and the legal costs he incurred in contesting the charges at the disciplinary enquiry, this inevitably flowing from the determinations made by the disciplinary tribunal.”

Therefore, in terms of this judgment, where a matter is brought to the Labour Court, in terms of section 191 of the Labour Relations Act, the trial will be conducted de novo and the decision of a prior disciplinary enquiry will not be binding on the Labour Court.

Independent Contractors

Section 213 (f) of the Labour Relations Act 66 of 1995 defines an employee as:

“(a) any person, excluding an independent contractor who works for another person or for the state and who receives, or is entitled to receive and remuneration; and

(b) any other person who in any manner assists in carrying on or conducting the business of an employer

The exclusion of independent contractors from this definition is of paramount importance as persons who are not employees as defined, are effectively excluded from the protection afforded by the Act. A person who is considered an independent contractor therefore has no recourse for unfair dismissal etc.

This exclusion of independent contractors from the Act has led to many employers hiring staff as contractors in order to try and circumvent the provisions of the Act.

The question of whether a person is a contractor or an employee poses a fundamental jurisdictional problem when a dispute is referred under the Labour Relations Act. As such is it a question of law which the Courts (or other bodies e.g. the CCMA) have to decide on before a matter may proceed.

Several recent cases which dealt with this issue are Niselow v Liberty Life Association of Africa (1998) 19 ILJ 752 (SCA); SABC v McKenzie (1999) 20 ILJ 585 (LAC) and Dempsey v Home & Property (1995) 16 ILJ 378 (LAC)

The test of the employment relationship should begin with the actual contract of employment. However in the SABC case it was said that the parties own perceptions of the employment relationship should be taken into account as well as the manner in which the contract is carried out.

The following factors appear to be the most important and provide the bases for several aspects of an employment relationship:

  • The dominant impression
  • Productive capacity
  • Control

The Dominant Impression test.

This test was applied in Dempsey. No single factor is considered determinative on its own but the employment relationship is examined in its totality. Factors which indicate an employment relationship must be weighed against factors which indicate a contractor relationship and the dominant impression must be determined.

The most important factors which will be taken into account are:

* Supervision and control – These are probably the most important and the greater the degree of control, the more probable that the relationship is one of employer / employee.

* Degree of autonomy – The independent contractor has far more autonomy in his daily tasks as the relationship is focused on the end result and not the manner in which it is accomplished. In Dempsey’s case, it was however held that a contractor may be required to maintain a certain level of ethics.

* Results versus time – An employee is usually required to devote a certain amount of time to the employer. He gets paid for this time whether or not there is work to be performed. A contractor will generally not be tied down to specific hours as long as the desired result is obtained.

* Commission versus salary – linked to the result / time consideration, the Court will also look at how payment was effected. Commission rewards a result while salary rewards time and therefore commission tends to indicate a contractor relationship while a salary or wage tends to indicate an employee relationship. This test is however not rigidly applied.

* Benefits – The Court may also take into account whether the “employee” receives benefits such as sick leave, medical aid, car allowance, etc. These are more indicative of an employment relationship but are also not totally incompatible with a contractor relationship.

It must be stressed that when applying the dominant impression test, the Court will take into account all the elements of each type of relationship that exist in each specific case. Thus the test is by nature subjective and each set of facts will be judged on its own merits.

The Productive Capacity test

This test was used in Niselow and consisted mainly of determining whether or not the “employee” put his productive capacity at the disposal of the “employer”. It is similar to the results versus time factor which was considered under the Dominant impression test above.

In this test, the Court will examine who actually controls the employees productive capacity. In an independent contractor situation, the contractor can decide how he is going to accomplish the work and usually may hire other staff to assist with this. As long as certain basic requirements / standards are complied with, he can use his own methods to complete his tasks.

In an employer / employee situation however, the employer controls the employees productive capacity and usually has the final say over how, when and what must be accomplished. The employees production is for the benefit of the employer.

In this situation, the employer has to remunerate the employee whether or not work has been provided, as long as the employer has had the benefit of the employees productive capacity.

This test is of extreme importance, as it has been endorsed by the Supreme Court of Appeal.

Control

This is the traditional ground for determining the true nature of a work relationship. It was held in McKenzie that control is one of the most important aspects of an employment relationship. Although it is not decisive, the greater the degree of control, the greater the probability of an employment relationship.

Problematic cases: an example

A trend appears to be emerging in which employees who wish to pay less tax, enter into a Consultancy agreement with an employer and provide invoices for services rendered, consulting fees or similar. The employee then pays VAT as opposed to income tax.

This set up came before the Court in the matters of CMS Support Services (Pty.) LTD v Briggs (1998) 19 ILJ 271 (LAC) and Hunt v ICC Car Importers Co (Pty.) LTD (1999) 20 ILJ 364 (LC). Although these cases were quite different, several important principles were applied.

Without going into excessive detail, it is interesting to note that the Court will not consider itself bound to what the parties have purported to contract between themselves but will examine the true nature of the relationship. For example, in the Hunt case, the Labour Court found that the system of providing invoices was a sham intended to deceive the revenue services. The Court found that although the employee was paid on presentation of invoices, the relationship between the parties was nevertheless one of employment.

The Court in Briggs however found that the parties had in fact entered into a consultancy agreement. In this case an employment relationship had previously existed between the parties who had mutually decided to rather enter into a consultancy arrangement. The Court enforced this contract and found that no employment relationship existed.

The Court has also made it clear that parties should not be able to disguise their relationship to avoid certain consequences (e.g. paying income tax) and then revert to employee status when this is suitable. In this regard a copy of the judgement in Hunt was forwarded to the receiver of revenue (as he then was ) .

Alcohol in the workplace

Alcohol in the workplace.
The basis for any contract of employment is that the employee will
render a service to the employer in return for (usually) payment of a
sum of money. Linked to this is the understanding that the employee will
devote his full attention to his work, at least during working hours.

It may be argued that an employee who arrives at work under the influence
of alcohol will not only be unable to devote his full attention to the
tasks which he has to perform but may also constitute a danger to his
fellow employees.

Seriousness

There can be no doubt in anyone’s mind that this is a fairly serious
offence. However for the purpose of disciplinary proceedings, one will
have to determine just how serious. In most companies, a disciplinary
code is used to categorise offences and determine appropriate sanctions.
For example sleeping on the job is generally not as serious as defrauding
the company. The disciplinary code will usually contain provisions for
the issuing of warnings and will state for which offences an employee
can be summarily dismissed.

This being said, the seriousness of a specific offence will vary greatly
depending on the type of work which is being performed. Take for example
the offence of sleeping on the job. If you are a cleaner, taking a ten-minute
nap when you should be working will not impress your employer but he will
hardly be entitled to fire you for it. However, if you are a bus driver,
the same ten-minute nap will put many lives in danger and in all probability
lead to your instant dismissal.

The same can be said of the offence of drinking on the job / coming to
work under the influence of alcohol.

Certainly in any job which involves the driving of a vehicle, an employee
who comes to work drunk would constitute a huge danger to himself as well
as others. Likewise an employee whose work includes the operation of dangerous
machinery would pose a threat to himself and fellow employees if he were
not able to perform his job properly.

In terms of the regulations to the Health and Occupational Safety Act,
an employer may not allow any employee who is under the influence of alcohol
to work any machinery and the employee must be sent home. This issue was
also dealt with in the Arbitration hearing between Khumalo and Silvacel
(KN13392)

Proof

In terms of the Constitution, no person who is accused of an offence
should have to prove his own innocence. The rule of “innocent until
proven guilty” requires that (in this context) the employer will
have to put certain charges to the accused employee and will then have
to prove that he is in fact guilty of them. It is not up to the employee
to prove that he is not guilty.

It must be noted that it is not fair to dismiss an employee on the basis
of suspicion or even on the basis of a strong suspicion. The guilt of
an employee must be proven (on a balance of probabilities) before any
action may lawfully be taken against him.

So now the problem arises of how to prove drunkenness. We must remember
that an employee is entitled to a fair hearing, even in the most serious
of cases. This means that he must be given a fair opportunity to reply
to the allegations made against him. The difficulty lies in the fact that
“drunkenness” is a vague and subjective term and also in that
it may be better concealed by more “experienced” drinkers.

For traffic purposes, a person is considered “drunk” or “under
the influence of alcohol” if his blood alcohol content is higher
than 0.05, however this is not the only standard. Certain facts will be
obvious, for example the person may smell of alcohol, be unsteady and
slur his speech. In the absence of any other reasonable explanation, these
will allow the drawing of a reasonable inference that the person is drunk.

If breathalyzer equipment is available, it should be used only by a person
trained in its use and the reading should be shown to the accused party
and noted down so that it cannot be disputed later.

As the use of a breathalyzer may constitute a breach of the employees
right to privacy, his consent should be obtained first. Should he refuse,
this may further the belief that he is drunk, a point which should be
explained to the employee in the case of his refusal. In this regard,
see Mpisi and Rainbow Farms, KN762

Sanction

As with any offence, the next question is ‘what is the appropriate punishment’.
Everyone is familiar with the notion that the punishment must fit the
crime and that is what must be applied in each case.

As the seriousness of the “crime” will vary from industry to
industry and from job to job, the punishment which is to be implemented
must be decided on within the context of each individual situation.

It should be noted that dismissal is a serious step and should only be
implemented if there is no other possible alternative. Especially with
regard to an employee who shows signs of being an alcoholic, dismissal
may only make the situation worse. In many cases (e.g. the Silvacel Arbitration
case supra) a distinction is drawn between “drunkenness” and
coming to work “under the influence”. The first case indicates
an employee with an alcohol related problem and involves repeated offences
while the latter involves occasional incidents.

An employer is obliged to take an employees personal situation into account
before dismissing him and, while an employer is not legally bound to,
the possibility of rehabilitation should be considered as discussed by
the Agricultural Labour Court in Esau & ‘n Ander v Wynland Boerdery
Belange (Edms) Bpk h/a Zetler Bros. (1995) 16 ILJ 237 (ALC). This is of
course supposing that the employee agrees that such a need exists.

All this being said, cases may arise where the company has no choice
left but to dismiss the employee. If this proves to be the case, the employer
is going to have to show that reasonable chance for improvement was allowed
for and that use was made of warnings or counselling.

A Case Study.

A recent Arbitration case which dealt with this issue was Le Roy and
S.A. Express Airways GA20054.

In this case, the employee was a pilot and was dismissed after being
found under the influence of alcohol. The dismissal was then challenged
as being unfair.

At the time of the incident, no breathalyzer tests were taken and only
the evidence of witnesses was led at the disciplinary inquiry in order
to prove that the employee was under the influence (which he disputed).
The evidence consisted of the smell of alcohol on his breath, the disheveled
and tired appearance of the employee, the unsteadiness of the employee
and failure to abide by Standard Operating Procedures at a risky phase
of flight.

This was considered a dismissible offence due to the fact that many lives
were put at risk as well as the fact that the employees conduct contravened
many laws and regulations relating to aviation.

The Commissioner found the employees conduct to be “highly irresponsible”
and “incompatible with a continued relationship of trust between
an airline and a pilot” His dismissal was found to be both procedurally
and substantively fair.