THE LABOUR COURT OF SOUTH AFRICA, JOHANNESBURG

Not Reportable
Case N o: JR2442/23
In the matter between:
MICHAEL COUTO Applicant
and
COMMISSION FOR CONCILIATION , MEDIATION
AND ARBITRATION First Responde nt
BONGE THEODORE MASOTE N.O. Second Respondent
NASA ENGINEERING (PTY) LTD Third Respondent
Heard : 5 November 2024
Delivered : 9 January 2025 (This judgment was handed down electronically by
emailing a copy to the parties. The 10 January 2025 is deemed to be the date of
delivery of this judgment).
Summary :

JUDGMENT

RAMJI , AJ

2
Introduction
[1] On 5 November 2024, I issued orders : (a) dismissing a postponement
application brought by the third respondent ( the company ) from the bar with
costs in the postponement , and (b) reviewing and setting aside the arbitration
award handed down by the second respondent (the Commissioner) under the
auspices of the first respondent (the CCMA) .
[2] I reserved judgment on the applicant’s (Mr Couto ) second prayer for
substitution of the ruling with a finding that the CCMA has jurisdiction to
arbitrate this dispute. This was to consider whether there was sufficient
evidence on the record to determine whether Mr Couto was, on balance, an
employee of the company, or whether the question needed to be remitted to
the CCMA.
[3] While addressing this, a potential jurisdictional issue appeared to me, and I
requested further submissions.
[4] This ju dgment addresses the following:
4.1. The postponement application.
4.2. The order reviewing and setting aside the award.
4.3. My question on jurisdiction.
4.4. Whether Mr Couto was an employee of the company.
Reasons for dismissing the postponement application
[5] I dismissed the postponement application because after appointing attorneys,
the company took no steps to ensure that its attorneys were representing it in
the review – all that was required was an answering affidavit after the record
was filed, but nothing was done.
[6] The company also did not file a postponement application in advance setting
out the reasoning for failing to oppose the review application. Ms Berry who
was following instructions from the company , advanced reasons for the failure
3
from the bar, but this is impermissible . There were no facts before me on
which an indulgence could be sought , and by all indications, the company had
failed to act with the necessary diligence.
[7] The matter proceeded on an unopposed basis.
Reasons for reviewing and setting aside the arbitration award
[8] Mr Couto’s status as an employee is a jurisdictional requirement . The test on
review is whether the evidence before the Commissioner was correct . I
reviewed and set aside the arbitration award because the Commissioner
applied the incorrect legal test, resulting in him ignoring relevant evidence and
relying on irrelevant evidence . The Commissioner also made incorrect factual
findings. Finally, the Commissioner incorrectly determined how a contract of
employment comes into being:
8.1 When faced with the question of whether someone is an employee or
independent contractor, the decision -maker must look at the substance
of the relationship and not the form in which the parties characterised
their contractual relationship.1 The contract is one factor in the inquiry,
and it may be outweighed by the realities of the relationship.2 Although
the Commissioner proceeded to consider a few factors relevant to
whether a person is an employee, he considered only the factors
against Mr Couto instead of weighing up factors for and against Mr
Couto – incorrectly ignoring many relevant factors in the process.
8.2 The Commissioner found that Mr Couto did not return the signed
contract of employment to the company . By all accounts, the document
was never signed. From this the Commissioner drew the “ only
reasonable ” inference that Mr Couto “ opted that to derive better
financial benefit , he should go th e independent contractor route”. This
was largely speculative, but more importantly, this consideration is not
the test for whether someone is an employee or an independent
contractor. It is therefore incorrect.

1 Denel (Pty) Ltd v Gerber (2005) 26 ILJ 1256 (LAC) at paras 19 – 20.
2 Vermooten v Department of Public Enterprises & others (2017) 38 ILJ 607 (LAC) at para 18 .
4
8.3 Finally, the company director’s primary argument or testimony was that
he never signed the contract of employment. T he Commissioner was
incorrect to be swayed by this and incorrect to conclude that “to create
a legally binding employment relationship, the parties had to s ign the
contract of employment”. The existence of an employment relationship
is not contingent on the signing of a contract.3
[9] On 30 September 2022, the company gave Mr Couto a letter terminating his
services (the termination letter). The letter stated :
‘This letter serves to confirm that in accordance with paragraph 7 of the
contract agreement the services of Mr M Couto Consulting with NASA
Engineering SA (PTY) Ltd have been terminated effective from 31 October
2022.’
The Court’s additional jurisdictional question
Possible premature referral
[10] Mr Couto referred an unfair dismissal dispute to the CCMA on 4 October
2022. The dispute was conciliated apparently without any jurisdictional points
being raised at that stage. Mr Couto referred the dispute to arbitration on 4
November 2022. On 30 November 2022, the company filed a preliminary
point : “The Applicant was not an employee of the Respondent, accordingly
could not have been dismissed ”. It did not raise that Mr Couto’s date of
dismissal was in fact after he made his referral to the CCMA.
[11] Upon closer inspection of the record, it appeared that Mr Couto issued the
company with an invoice for work in the month of October 2022, near the end
of October 2022, suggesting that he worked during that entire period.
[12] In National Union of Metalworkers of SA v Intervalve (Pty) Ltd and o thers , the
Constitutional Court noted while determining the issue of non -joinder, that the

3 Wyeth SA (Pty) Ltd v Manqele and o thers (2005) 26 ILJ 749 (LAC) at para 13.
5
“fact that a dismissal has occurred is required before it can be said that a
dispute exists or has arisen about the fairness of a dismissal ”.4
[13] Section 190(1) of the Labour Relations Act5 (LRA) provides that the date of
dismissal is the earlier of “ (a) the date on which the contract of employment
terminated; or (b) the date on which the employee left the service of the
employer ”. Section 19 0(2)(d) of the LRA then states:
‘Despite subsection (1) –
…
(d) if an employer terminates an employee’s employment on notice, the
date of dismissal is the date on which the notice expires or, if it is an
earlier date, the date on which the employee is paid all outstanding
salary’ (own emphasis).
[14] Therefore, o n 21 November 2024, I issued the following directive for further
submissions from Mr Couto’s representatives :
‘2.1. This Court is obliged to raise jurisdictional questions mero motu , and
hereby issues a directive for written submissions on the following
question: Is this dispute properly before this Court, and was it properly
before the CCMA?
2.2. The Applicant is requested to make its written submissions in
response to the question with regard to the following:
2.2.1. Mr Couto referred his dispute to the CCMA for conciliation on 4
October 2022 (Record, volume 10, pp 905 - 909).
2.2.2. The documents in the record suggest that no dismissal had in
fact been effected when the matter was referred for conciliation
on 4 October 2022 because:
a. Mr Couto received his letter of termination on 30
September 2022, which provided for the termination of

4 (2015) 36 ILJ 363 (CC) at para 89 . See also: Sambo and o thers v Steytler Boerdery (2014) 35 ILJ
3235 (LC) paras 17 – 21.
5 Act 66 of 1995 , as amended.
6
his services only on 31 October 2022 (Pleadings
bundle section 1, pp 19 to 20, para 8 (founding affidavit
of Michael Couto; Record, volume 1, p 64, lines 8 - 24).
b. On 24 October 2022, Mr Couto further issued the third
respondent with an invoice for a full month of work for
October 2022 (Record, volume 10, p 962).
2.3. The Applicant is required to confine itself to the law, and, in respect of
any facts, to the review record. Any factual statements made in the
written submissions must cross -reference the relevant page/s and (if
applicabl e) line/s in the review record.’
[15] I received the applicant’s submissions on 17 December 2024 , and though I
am not sure at what point the delay arose, I am grateful to counsel for the
detailed submissions .
Application of section 190(a) and 190(2)(d) to the facts
[16] Mr Couto’s case is that, despite the wording of the termination notice and the
invoice , the date of his dismissal was 30 September 2022 . The further
submissions advanced several reasons based on the record of proceedings.
[17] First, the director stated in his founding affidavit made in support of the
jurisdictional point raised before the CCMA that “the relationship [between the
company and Mr Couto ] was terminated on 30 September 2022 via notice in
writing ”. (own emphasis)
[18] Second, Mr Couto’s attorney stated under oath in an interlocutory application
before the CCMA that Mr Couto “ was informed that it was not required that he
worked his notice period and left the premises of the respondent on 30
September 2022 ”. Mr Couto confirmed this. The company’s denied that Mr
Couto was told that he should not work out his notice period. Its version was
that Mr Couto “merely got up and walked out of the meeting ”. It had to replace
him immediately (a point I return to later) and did so.
Finding on date of dismissal
7
[19] Mr Couto’s counsel submitted that the company repudiated the contract . The
company dispute s this. I will accept the company ’s version that it was in fact
Mr Couto who repudiated the contract by “ walking out ”. The company states
that it paid Mr Couto in full “even though he did not work the remainder of the
month ” and found a replacement to continue Mr Couto’s work from the
following day. Therefore, the company accepted Mr Couto’s repudiation and
terminated the contract. They paid him, whether in lieu of notice or not, but not
for rendering any services. In short, e ven on the company’s version, Mr Couto
left its services on 30 September 2024.
[20] I therefore accept that Mr Couto’s date of dismissal was 30 September 2024,
in terms of section 190(1)(b) of the LRA .6 As a result, his referral was not
premature and , even on the strictest test, did not deprive the CCMA, and by
extension, this Court, of the jurisdiction to determine his dispute.
[21] I turn now to the prayer for relief in the form of substituti on.
Was Mr Couto an employee ?
[22] This question was fully ventilated in the CCMA, and I have a detailed record
of relevant evidence before me. A portion of the evidence of the director was
not recorded, however, it was typed up based on the Commissioner’s notes
when the Commissioner realised the issue . It was then reviewed and
amended by the parties and ultimately agreed to before continuing with the
arbitration.
[23] Also, Mr Couto ’s services or employment ended in September 2022. If this
matter is remitted to the CCMA for a fresh hearing on whether he is an
employee, two -and-a-half years will have passed.
[24] Finally, if I find in Mr Couto’s favour or the CCMA decides the point in his
favour , the matter will still need to proceed to a n arbitration on the merits. For
these reasons, I find that I am able, and that it is expedient , to decide the
question of whether Mr Couto was a company employee.

6 Section 190(1)(b) of the LRA.
8
The test
[25] The test for employment involves the consideration of several factors. In
addition to the form of the relationship, i n State Information Technology
Agency (Pty) Ltd v Commission for Conciliation, Mediation & Arbitration &
others (SITA) ,7 the Labour Appeal court (LAC) set out the following
substantive aspects of a relationship:
‘1. an employer’s right to supervision and control ;
2. whether the employee forms an integral part of the organization with
the employer; and
3. the extent to which the employee was economical ly dependent upon
the employer.’
The form of the relationship
The employment contract
[26] The only written document purporting to govern the relationship between Mr
Couto and the company is an “ Offer letter of contract of employment” . It is
addressed by the company to Mr Couto and begins, “ Further to our
discussions, we would like to extend to you a formal offer of contractual
employment. Your attention is drawn to the following conditions, which will be
applicable to you ”. The terms which follow are typical of an employment
contract,8 save for a suspensive condition, which fell away when parties
began performing in terms of the contract. The director admitted that these
were the same terms on which employees were engaged. This document
therefore does not favour the company’s case. It was relied on by Mr Couto
as proof that this was an employment relationship, which he claimed
commenced on 1 February 2021 .

7 (2008) 29 ILJ 2234 (LAC) at para 12.
8 Niselow v Liberty Life Association of Africa Ltd (1998) 19 ILJ 752 (SCA) at para 9 ; SA Broadcasting
Corporation v Mckenzie (1999) 20 ILJ 585 (LAC) a t paras 9 – 10 (SABC).
9
[27] An unsigned document is a binding and enforceable contract if the parties
have performed in terms of it: the most significant consideration s in this case
are these:
27.1. The company itself regarded the contract as valid because it explicitly
referenced the termination clause in the contract in its termination
letter. The director was evasive and failed to explain why the
employment contract was referenced when terminating Mr Couto’s
services, if it did not govern the parties’ relationship. Eventually, the
director could only state that he “ misplace[d] ” his words and that he
“should be better than that ”.
27.2 Mr Couto was asked to provide his “ employment contract ” for the
personnel files. The director could not dispute this and the company did
not call the onl y witness who could dispute it.
[28] The employment contract was clearly close at hand and not a forgotten or
destroyed document. I will not canvas everything in the record, but other
significant aspects of the employment contract which parties performed are
set out below under the headings of the three -part SITA test.
[29] The company argued and testified relentlessly that the Commissioner should
not rely on this document , and that the clauses are irrelevant, because the
director did not sign it . It alleged that this was because Mr Couto took a
decision to abandon employment in favour of independent contracting to
exploit the tax benefits. Agreeing with the company, t he Commissioner
inferred that the written agreement was abandoned because Mr Couto
decided that it would be more beneficial to him from a tax perspective to work
as an independent contractor and that he should be held to this.
[30] What we know from the evidence is that the offer letter was in substance an
employment contract and that it was not signed . The Commissioner’s
inference is, however, unreasonable as there is no basis for the inference on
the record. First, the independent contracting arrangement has benefits for
both parties – a contractor can claim more tax deductions than an employee,
but the company is exempt from providing employment benefits and various
10
tax and labour obligations. Second, there was no evidence that Mr Couto was
avoiding or even evading paying taxes. He testified that he handled his own
taxes with an accountant assisting him. Mr Couto’s attorney made both
arguments to the Commissioner.


Invoices
[31] The company’s other evidence was that Mr Couto had always issued it with
invoices, instead of being on the company payroll. The company alleges that
this was based on Mr Couto’s decision to not be an employee. However, the
contract of employment contains an unconventional payment clause:
‘You will be on a contractual basis as Technical Sales & Product Support
Representative from 1st February 2021 at an average gross payment of
R41,182 per month. Medical aid membership will remain your own
responsibility. [sic]
You will be required to register your incomes with the necessary authorities
for PAYE and/or SITE, for all legally prescribed deductions, where applicable.
Monthly payments will be paid on the last Friday of every month unless this is
not a working day.
For a period of three months you will be provided with an allowance of R9,000
per month (payable with your monthly contractual fee) to cover your travel
expenses .’ (own empha sis)
[32] A further clause required Mr Couto to submit “ a monthly expense schedule ”.
[33] While an employee is responsible for registering as a taxpayer, it is the
employer who registers for PAYE and SITE payments (among other things).
The company’s line of questioning on Mr Couto’s failure to seek clarity on the
clause does not assist it – this clause requiring the impossible was drafted by
the company. The word “salary” is also not used in the contract . Instead, the
company uses the term “ monthly contractual fee ”.
11
[34] Therefore, when Mr Couto issued the company with invoices after being told
to, he was not acting against the contract or in terms of his own decision . The
payment provisions in the contract were sufficiently unclear to allow for an
employee to issue invoices. This is a problem from a tax perspective for a
party or parties seeking to exploit the tax system, but issuing invoices alone
does not make Mr Couto an independent contractor. There is more to be
considered.
[35] Beyond form, t he content of the invoices is significant: Mr Couto “charged ” the
company the same “fee” every month, the same travel allowance and only the
additional expenses, such as accommodation, varied. T he line items and
amounts were in line with those envisioned in the contract. The director even
testified that this payment “ is part of our agreement ”. Mr Couto also testified
that he was informed by an employee described at one point as “ the financial
manager ” in the company that he needed to invoice the company before he
could be paid at the end of his first month of work. This was not challenged in
cross -examination and t he director testified that he “did not know about that ”.
[36] The financial manager also instructed Mr Couto to “ adjust ” his invoices,
increasing his service fee by 6%. This accorded with a new bargaining council
collective agreement which binds the company. It is implausible for the
director to explain this increase related to an increase in Mr Couto’s
expenses. If it did, then it would have been Mr Couto who changed his rates
and informed t he company or negotiated with it.
[37] The financial manager, the person who could dispute t he evidence on the
invoices was not called as a witness , despite the company’s attorney stating
to the Commissioner that the financial manager would testify.
[38] Lastly, the invoices could not have been one of a true independent contractor
if the company paid out an invoice during its shutdown period – i.e. a time
when it was common cause that Mr Couto did not render any services to the
company. The manager agreed when it was put to him that “ in terms of the
agreement, [Mr Couto] will be paid a monthly fixed amount ”.
12
[39] Mr Couto was also paid according to the company’s sick leave policy when he
did not work because he was sick. The only time when it was established that
Mr Couto was not paid his leave pay was for October 2022, after the
termination of his contract . One can only infer that this abrupt change
occurred because, on termination of Mr Couto’s contract, the company had
decided to frame this as a client and independent contractor relationship. Its
past practice of paying Mr Couto’s leave pay is more significant.
The company’s right to supervision of and control over Mr Couto
[40] The director correctly stated that even an independent contractor does not
have “ carte blanche ”. The issue is what freedoms Mr Couto enjoyed and the
nature of those freedoms. Was he obliged to obey lawful commands, orders
or instructions from the company? Did the company prescribe the work he
had to do, how he had to do it, and when and where? Or could he perform the
work on his own terms provided he delivered the required product at the end
of the day?9
[41] The contract states that Mr Couto would be subject “ to any and all Company
policies and procedures applicable from time to time ”. The contract provides
for annual leave, sick leave and family responsibility leave. The director
conceded to granting Mr Couto leave on at least one occasion and claimed to
have no knowledge of other leave that was granted. There were occasions
when Mr Couto notified his manager that he would not be on the premises or
attending to his work. In these cases, (including the case that arose shortly
before Mr Couto received a termination letter), management responded in a
displeased fashion (including complaining about Mr Couto submitting sick
notes late) . This response shows that Mr Couto was not his own master and
that he required permission to be away from the company premises or from
work. It is also uncontested that Mr Couto submitted weekly reports detailing
his whereabouts – an independent contractor may be required to report, but
would more likely be required to show a product or progress with a project,
and not mere presence.

9 Above at para 8.
13
[42] Another factor that prevented Mr Couto from being his own master was the
common cause fact that when he was engaged, the company knew that he
was not a specialist in the work and would be trained and supervised. It is
implausible that an independent contractor would be engaged in order to be
trained to do the work required of him .
[43] The contract also states that Mr Couto was subject “ to any and all Company
policies and procedures applicable from time to time ”. The company’s real
complaint appears to relate to Mr Couto’s approach to taking time off , failing
to make targets and client relationships . The director ended his explanation
for why Mr Couto was being terminated by referring vaguely to “ a combination
of not setting the targets that he was tasked to do by our management and
things like that ”. This is highly suggestive of control and supervision, and Mr
Couto’s alleged failures in these respects do not render him an independent
contractor, though it may make him a difficult employee. In respect of
supervision and control, Mr Couto was expected to behave like the company’s
recognised employees.
[44] The contract states that the contract could be terminated for, among other
things, poor performance. The director also stated that he had an issue with
Mr Couto’s performance and that “ [i]f it improved, he would not be dismissed ”
(own emphasis) .
[45] The contract states that Mr Couto would “[b]e responsible for all duties
associated with [a] Technical Sales & Product Support Representative and
any related duty that may be assigned to you from time to time ”. The company
could not deny that Mr Couto was prescribed other work, specifically citing an
incident where he was told not to waste his time with a certain task, and was
directed to turn his attention to something else. His manager also testified that
during a delivery he asked Mr Couto why he was not assisting company
employees with unloading a truck. The manager claim ed that he understood
retrospectively that this was because Mr Couto was independent. This is
implausible in the light of many similar insta nces, already cited, of the
manager reprimanding Mr Couto’s manner of working.
14
Whether Mr Couto formed an integral part of the company
[46] A third fact which the company put forward is that Mr Couto did not use a
company e -mail account and used his private account instead. Mr Couto
offered a plausible explanation for this (so that he could be reached after
hours) and it is significant that the director testified that Mr Couto sought
permission (“ asked to use ”) this e -mail address .
[47] Turning to substance, Mr Couto was clearly not an accessory at the company.
When he was away without permission, this was always an issue. He had an
office at the company and worked full -time. Mr Couto’s manager testified on
the extent of his integration into the business, saying that “ if he is not going to
be there, from an operational requirement’s view, the company needs to know
so that we can make other plans ”. This is how employees operate in a
business. His manager also testified that from a working perspective “ whether
it was as an employment contract or as a service contract with M Couto
Consulting, the needs for me myself in a marketing perspective in terms of the
provision of information and data would have been one and the same ”.
[48] Also, when Mr Couto was either asked to leave the premises or walked out on
30 September 2024, he was immediately replaced, showing that his work was
integral to company operations. His replacement was formally recognised as
an employee.
The extent of Mr Couto’s economic dependence on the company
[49] In SITA,10 the LAC adopted the following guide on economic dependence,
which includes con sideration of personal freedom:
‘A genuinely self -employed person is not economically dependent on their
employer because he or she retains the capacity to contract with others …
The fact that a person is required by contract to only provide services for a
single “client ” is a very strong indication of economic dependence. ’
[50] The contract states that Mr Couto “ shall not be engaged or take part, directly
or indirectly, whether as a contract employee, or in any other capacity, in any

10 Above at para 11.
15
other business without the Company’s prior written consent ”. It appears a
common cause that Mr Couto did not work elsewhere while working for the
company . The director testified that he would have investigated if Mr Couto
started working for another company and then was evasive as to the further
steps that he would take. His manager also expressed similar concerns .
[51] In Goliath v SA Broadc asting Corporation SOC Ltd and o thers ,11 La Grange J
held:
‘Obviously, a person who is required to be available to render a service for
the length of a working day is one who has given over their capacity to
produce to another .’
[52] The contract states that contract, Mr Couto was subject to p rescribed (full -
time) working hours, and that Mr Couto “ may be required to work such outside
normal hours of employment, as the Company c onsiders necessary to meet
the n eeds of the Company’s business”. His manager also contradicted
himself, first testifying that Mr Couto could not work for anyone else because
he failed to develop the skills to perform his work for the company efficiently,
then stating, “I think it was clear by virtue of the requirements from [the
company] that [Mr Couto] would not be in a position to hold a second
opportunity” . This was the reality. Mr Couto also testified that with travelling to
the client sites his work week was between 50 and 60 hours’ long.
Conclusion
[53] Mr Couto was clearly engaged on terms (in writing and in practice) typical of
an employment relationship.
[54] There are certainly unusual payment terms in the employment contract and
the use of an invoicing system is equally strange. It may be that Mr Couto
and/or the company sought to formally classify the relationship as one of a
client and an independent contract or for financial advantages . I do not
express a view on this. This is a matter for the South African Revenue
Service, (SARS) which has mechanisms in place to test for employment

11 (2023) 44 ILJ 185 (LC) at para 59.
16
status and to recover unpaid taxes from employers , who may in turn recover
any payments to SARS from employees. This may be t he financial fate of Mr
Couto, but for purposes of this case and the jurisdiction of the CCMA , the
evidence shows that he and the company generally acted and related as
though Mr Couto was a company employee.
[55] In the result , the following order is made :
Order
1. The third respondent’s postponement application is dismissed with
costs.
2. The review application is granted.
3. The arbitration award is reviewed and set aside and substituted with a
finding that the applicant was an employee of the third respondent, and
that the first respondent has jurisdiction to determine the unfair
dismissal dispute .
4. The applicant’s unfair dismissal dispute is remitted to the first
respondent for a hearing on the merits before an arbitrator other than
the second respondent.


_______________________
B Ramji
Acting Judge of the Labour Court of South Africa







17







Appearances :
For the Applicant: Adv Lindi Steyn
Instructed by: Andre Schmidt Inc.

For the Respondent: Ms Johane Berry
Instructed by: Berry Law