What is regarded as a full time employee in respect of a personal service provider?
12 February 2015
Posted by: Author: SAIT Technical
Author: SAIT Technical
Q: My question relates to personal service
providers. I want to ask for clarity around the definition of full-time employees. If an employee works a 4.5 hour workday, will
such an employee be regarded as a full time employee?
A: No definition is
provided in either the Income Tax Act or the Fourth Schedule as to what
constitutes a full time employee. In Natal Joint Municipal Pension Fund v Endumeni
Municipality 2012 (4) SA 593 (SCA) para 18 the test for interpretation is set
Whatever the nature of
the document, consideration must be given to the language used in the light of
the ordinary rules of grammar and syntax; the context in which the provision
appears; the apparent purpose to which it is directed and the material known to
those responsible for its production. Where more than one meaning is possible
each possibility must be weighed in the light of all these factors. The process
is objective, not subjective. A sensible meaning is to be preferred to one that
leads to insensible or un-business-like results or undermines the apparent
purpose of the document. Judges must be alert to, and guard against, the
temptation to substitute what they regard as reasonable, sensible or
businesslike for the words actually used.
The Oxford Dictionary
defines "full time” as:
Occupying or using the
whole of someone’s available working time:
In a labour law sense a
similar approach has been introduced by the Labour Relations Amendment Act 2014
which inserted section 198C which states as follows:
(1) For the purpose of this section—
(a) a part-time employee is an employee who is remunerated wholly or partly
by reference to the time that the employee works and who works less hours than
a comparable full-time employee; and
(b) a comparable full-time employee—
(i) is an employee who is remunerated wholly or partly by reference to the
time that the employee works and who is identifiable as a full-time employee in
terms of the custom and practice of the employer of that employee; and
(ii) does not include a full-time employee whose hours of work are
temporarily reduced for operational requirements as a result of an agreement.
In our view both these
citations would be an appropriate meaning to the word "full time” as used in
the definition of Personal Service Provider” in the Fourth Schedule.
Accordingly we do not believe that a person employed "half day” would be in
full time employment unless all the employees are employed on such basis.
Disclaimer: Nothing in this query and answer should be construed as
constituting tax advice or a tax opinion. An expert should be consulted for
advice based on the facts and circumstances of each transaction/case. Even
though great care has been taken to ensure the accuracy of the answer, SAIT do
not accept any responsibility for consequences of decisions taken based on this
query and answer. It remains your own responsibility to consult the relevant
primary resources when taking a decision.