HR Pulse




Menu Style


Do away with your staff shortage headaches!

Each year, around this time, employees across the country let out a silent “whoop” of jubilation about the amount of public holidays there are during March, April and May, and quickly whip out their diaries to find how many days they can take off for the maximum amount of days’ leave.

However, the fact that there are all these public holidays doesn’t mean that work stops dead in its tracks. So how do you make sure that all the work gets done while your employees are enjoying their time off?

One of the options you can choose to go with, besides doing all your employees’ work yourself, is using outsourcers.

What is the legal definition of an outsourcer?

In a recent seminar entitled The Employment Contract Law and Practice, which was presented by Edureach, Professor Barney Jordaan of Maserumule Consulting said that an outsourcer (or an independent contractor, which is the legally correct term) is someone who you enter into an agreement with to provide a specific result and at a price you agree to.

You do not control this independent contractor in the same way you can control one of your employees.

So say, for example, you run an engineering firm and you decide that you want to rebrand your company. You hire a graphic designer as an independent contractor because you don’t need his services on a regular basis and as such it doesn’t make economic sense to have a full-time graphic designer on your staff.

You’ll enter into an agreement with the graphic designer to redesign your logo, and any other material you’ll need, such as company letterheads, etc., so you can successfully rebrand your company.  You’ll agree on a price that you’ll pay him for this work and as long as he delivers the work by the agreed-on deadline, you can’t, for example, dictate his working hours, etc.

Why distinguish between an independent contractor and an employee?

Because, says Jordaan, you’ll treat an independent contractor differently from an employee in terms of:

  • Labour legislation;
  • Income tax;
  • Social security; and
  • Vicarious liability.

For example, you are responsible for anything your employees do in the course of their duties. In other words, you are vicariously liable for any wrongdoings that your employees may commit while they carry out their jobs.

There is a well-known case of a company which employed an individual, let’s call him Jack, to drive one of their trucks. The company expressly forbade Jack to give lifts to anyone in the company trucks. However, Jack disobeyed this instruction and gave a lift to someone. He got into an accident and the woman he gave the lift to was injured. The company would have been responsible for the passenger’s injuries, under the doctrine of vicarious liability, but as they expressly forbade Jack to pick up any passengers they avoided liability saying that Jack was acting against their instructions. This meant that he was not performing his duties, according to his employment agreement with them, and they avoided being held liable.

What are the benefits of outsourcing?

There are many, many benefits that come with outsourcing. Four of the main benefits are that you can:

1.    Grow your organisation without increasing your costs and overheads;
2.    Focus on your core competencies;
3.    Increase the efficiency of your company; and
4.    Access specific skills that your company doesn’t have in-house.

What is the best way to start outsourcing?

Possibly the best way to do so is to use an outsourcing company or an individual outsourcer.

What documentation do I need to have in place when I contract with an outsourcing company?

There needs to be a service level agreement between you and the outsource company in which the company formally defines the services that they will provide to you. SLAs can be legally binding formal agreements or informal agreements and can contain clauses about availability, serviceability, performance, operation, etc.

What documentation do I need to have in place when I contract with an individual outsourcer?

You need to have a briefing document in which you provide the outsourcer any necessary information that he will need in order to complete the job. Have a look at the Sample publisher's letter of appointment on the Professional Editors’ Group website, and a commission acceptance letter* from the South African Freelancers’ Association (SAFREA) for inspiration on how to draft your own briefing document for individual outsourcers.

Although it’s not common practice when contracting with individual outsourcers, it’s a good practice to draw up a contract between you and the individual outsourcer.  Says Helen Ueckermann, Safrea chair: “Freelancers need to start treating themselves as businesses. Part of this includes concluding contracts with everyone they enter into a business relationship with in order to protect their rights.”

Sample service providers’ contracts in publishing will give you some ideas about what to put into your contract.

Where do I find the best outsourcer for me?

It really depends on what type of service you’re looking for. However, here are some ideas to get you started on your search:

* Safrea has kindly given us permission to republish this letter.