ER24 Holdings v Smith NO

On 10 August 2003, Ms Romy Staracek was a passenger in a vehicle driven by Ms Natasha Swanepoel, a shift leader employed by Emergency Room Company (Pty) Ltd trading as ER24. The vehicle was involved in an accident caused by Natasha's negligence, and Romy was seriously injured. At the time, Romy was a volunteer worker undergoing vocational experience necessary to qualify as a paramedic. She and Natasha were on their way to an accident scene when the accident occurred. Advocate Irvin Smith was appointed as curator ad litem to Romy and sued ER24 for damages exceeding R7 million. ER24 raised two special pleas: (1) that Romy was an 'employee' under the Compensation for Occupational Injuries and Diseases Act 130 of 1993, and thus no action lay against it per section 35 of the Act; and (2) that it had contracted out of liability through an indemnity clause signed by Romy. ER24 also joined the Compensation Commissioner as a third party, seeking a declaration that Romy was an employee and that any claim should lie against the Commissioner.

• Whether a volunteer worker receiving vocational experience but no monetary payment constitutes an 'employee' under the Compensation for Occupational Injuries and Diseases Act 130 of 1993
• Whether vocational experience and training constitute 'remuneration in kind' as contemplated in the definition of 'employee' in the Act
• Whether an indemnity clause signed by the volunteer worker effectively excluded ER24's liability for injuries sustained by the volunteer
• Whether the indemnity clause was susceptible to rectification to reflect ER24's intended exclusion of liability

The appeal was dismissed. ER24 was ordered to pay the costs of the curator ad litem and the Compensation Commissioner, including the costs of two counsel in each case.

Remuneration 'in kind' as contemplated in the definition of 'employee' in section 1 of the Compensation for Occupational Injuries and Diseases Act 130 of 1993 means the provision of something that has an objectively ascertainable value which can serve as the basis for the assessment of an employer in terms of section 83 and for the calculation of compensation payable in terms of Chapter VI read with Schedule 4 of the Act. Vocational experience, training, and exposure to work environments do not constitute remuneration in kind because they cannot be objectively valued for the purposes of calculating employer assessments and employee compensation. A person who receives no remuneration, whether in cash or in kind, is not an 'employee' for purposes of the Act, regardless of whether they work under a contract of service.

The court noted that section 51 of the Act, which provides for enhanced compensation for employees in training or under 26 years of age, does not assist in determining whether a person is an employee in the first place. The section presupposes employee status and merely provides an increased benefit. The court also observed that opinions expressed by witnesses and correspondence from the Compensation Commissioner's office regarding whether Romy was an employee are irrelevant, as this is a question of law for the court to determine. Additionally, the court noted that any contractual provision purporting to exclude statutory protection under the Act would be void in terms of section 33 of the Act if the person is entitled to benefits under the Act.

This case is significant in South African labour and compensation law as it clarifies the scope of 'remuneration in kind' under the Compensation for Occupational Injuries and Diseases Act 130 of 1993. It establishes that not all benefits or advantages received by a person in a work-like relationship constitute remuneration for the purposes of determining employee status. The judgment protects volunteer workers and trainees who receive no monetary payment or objectively ascertainable value from being classified as employees under the Act, thereby preserving their common law remedies against negligent employers. The decision also reinforces the strict approach to exemption clauses and the requirements for rectification of contracts.