And so it finally comes together.  The Code of Good Practice on equal pay/remuneration for work of equal value (“the Code”) was gazetted on 1 June 2015.  Previously the Minister of Labour had published the Draft Code on 29 September 2014 for public comment. 

The Code must be read together with the Employment Equity Amendment Act (“EEA”) and the Employment Equity Regulations, 2014 (“EER”) which had come into operation on 1 August 2014.  Some of the more pertinent aspects of the Code include:

1. With reference to section 6(4) of the EEA which had introduced a new form of unfair discrimination, the Code provides practical guidance to employers and employees on how to apply the principle of “equal pay/remuneration for work of equal value” in their workplace.

2. “Work of equal value” means the work performed by an employee that is the same or substantially the same or work of equal value as referred to in Section 6(4).

3. The Code is issued in terms of section 54 of the EEA, its regulations and other codes issued in terms thereof, and must be read in conjunction with both the regulations made by the Minister of Labour in terms of section 6(5) of the EEA on the criteria and methodology for assessing work of equal value and the Code of Good Practice on the Integration of Employment Equity into Human Resources Policies, Practices and Procedures (HR Code), in particular Part B dealing with the Terms and Conditions of Employment.
• Please note that the EER, 2014 which came into operation on 1 August 2014 repealed the 2009 Regulation.
4. The Code applies to all employers and employees, including the State.

5. The Code seeks to promote the elimination of unfair discrimination in respect of pay/remuneration by applying the principle of equal pay/remuneration for work of equal value.  The term “remuneration” as defined in the Basic Conditions of Employment Act, 1997, as amended, (“BCEA”) includes “any payment in money or in kind, or both, made or owing to any person in return for working for another person, including the State.”  To ensure compliance with the Code employers must therefore examine all aspects of their pay/remuneration policies and practices in accordance with the principle of equal pay/remuneration for work of equal value.

HOW DO EMPLOYERS ACHIEVE THIS?

1. Eliminate unfair discrimination in respect of pay/remuneration:-

1.1 An employer is required to take steps to eliminate differences in terms and conditions of employment, including pay/remuneration of employees who perform the same or substantially the same work or work of equal value.
1.2 Differences based on any of the listed or any other arbitrary ground in section 6(1) of the EEA may constitute unfair discrimination.  It is imperative though that both the complainant and the comparator must perform the same, similar or work of equal value and where an allegation of a difference in pay or remuneration is made same will only be unfair discrimination if the differences are directly or indirectly based on any of the listed grounds in accordance with Section 6(1) or any other arbitrary ground.
1.3 Paragraph 4.4 lists the 3 criteria which require scrutiny when examining whether the obligation to apply pay/remuneration equity in the workplace is being complied with.  These include:
(i) Are the jobs that are being compared the same, substantially the same or of equal value in terms of an objective assessment?
(ii) Is there a difference in the terms and conditions of employment, including pay/remuneration, of the employees in the jobs that are being compared?
(iii) If there are differences in the terms and conditions of employment, can these be justified on fair and rational grounds?

2. Evaluate jobs:-

2.1 In order to ascertain the value of a job for the purpose of applying the principle of equal pay/remuneration for work of equal value, an objective assessment must be undertaken in accordance with the relevant and appropriate criteria.
2.2 These include:
(i) The responsibility demanded of the work, including responsibility for people, finances and material;
(ii) The skills, qualifications, including prior learning and experience required to perform the work, whether formal or informal;
(iii) Physical, mental and emotional effort required to perform the work;
(iv) The assessment of working conditions may include an assessment of the physical environment, psychological conditions, time when and the geographic local when the work is performed.
2.3 The above constitute basic criteria which according to best practice should form part of every job evaluation and while they are generally regarded as being sufficient for evaluating all the tasks performed in an organisation, the weighting attached to each of these factors may vary depending on the sector employer and the job concerned.
2.4 Employers may also take into account the conditions under which work is performed in evaluating the value of work.

3. Comparing and evaluating male- and female- dominated jobs:-

3.1 The ILO has suggested that due to stereotypes with regard to women’s work; traditional job evaluation methods that were designed on the basis of male dominated jobs and the weaker bargaining power on behalf of female employees, employers “may be required to establish the value of male- and female- dominated jobs in order to be able to ascertain whether particular jobs have been undervalued and to align female- dominated jobs with comparable male- dominated jobs in the organisation.”
3.2 An employee may base a claim on the ground that they would have received higher pay/remuneration if they were not female and to be able to succeed with such a claim the employee would have to show that a male employee hired to perform the work would have been employed on different terms and conditions.  In this regard, the fact that there are no comparable male dominated jobs to female dominated jobs within an organisation does not necessarily imply that there is no discrimination on the grounds of sex or gender or any other prescribed grounds.

4. Factors justifying differentiation in pay/remuneration:-

4.1 Employers are required to ensure that unfair discrimination does not occur at any of the stages where jobs have been evaluated and/or graded, the various jobs are allocated pay or remuneration packages in accordance with the pay/remuneration philosophy of the employer and the value of the jobs.
4.2 It is important to remember that where employees perform work that is the same or substantially the same or is work of equal value, a difference in terms and conditions of employment, including pay/remuneration is not unfair discrimination if the differentiation is not based on a listed or any other arbitrary ground in terms of section 6(1) of the EEA as amended.
4.3 In accordance with Regulation 7 of the EER, 2014, the following grounds are commonly taken into account in determining pay/remuneration.  As such, it will not be unfair discrimination if the difference is fair and rational and is based on any one or more or a combination of the following factors:
(i) The individuals’ respective seniority or length of service;
(ii) The individuals’ respective qualifications, ability, competence or potential above the minimum acceptance levels required for the performance of the job;
(iii) The individuals’ respective performance, quantity or quality of work, provided that employees are equally subject to the employer’s performance evaluation system, and that the performance evaluation system is consistently applied;
(iv) Where an employee is demoted as a result of organisational restructuring or for any other legitimate reason without a reduction in pay/remuneration and fixing the employee’s salary at this level until the pay/remuneration of employees in the same job category reaches this level;
(v) Where an individual is employed temporarily in a position for purposes of gaining experience or training and as a result receives different pay/remuneration or enjoys different terms and conditions;
(vi) The existence of a shortage of relevant skills in a particular job classification; and
(vii) Any other relevant factor that is not unfairly discriminatory in terms of section 6(1) of the EEA.
4.4 It is important to note that the factors above may not be used to determined pay/remuneration in a manner that is biased or indirectly discriminates against an employee or group of employees based on any listed or any arbitrary ground in terms of section 6(1) of the EEA.

5. Process for evaluating jobs for the purpose of equal pay/remuneration for work of equal value:-

5.1 Determine the scope of the audit to be conducted to identify inequalities in pay/remuneration on account of gender, race, disability or any other listed or any other arbitrary ground;
5.2 Identify jobs that would be subjected to the audit;
5.3 Ensure that job profiles or job descriptions exist and are current before evaluating jobs;
5.4 Utilise a job evaluation and/or grading system that is fair and transparent and does not have the effect of discriminating unfairly on any listed or arbitrary ground;
5.5 Compare jobs that are the same, similar or of equal value in the employers own organisation or company.  This should also include a comparison between female-dominated jobs with male-dominated jobs as well as any other jobs that may have been undervalued due to factors such as race, disability or any other discriminatory grounds;
5.6 Select a method of comparing pay/remuneration both in money and in kind in the relevant jobs which can be done by using either the average or the median earnings of employees in the relevant jobs as a basis for pay/remuneration comparisons or by using another method but will compare pay/remuneration in a fair and rational manner;
5.7 Identify the reasons for differentiating in pay/remuneration as contemplated by Regulation 7 in the EER and determine whether they are justifiable;
5.8 Where a differentiation is found not to be justifiable, determine how to address inequalities identified, without reducing the pay/remuneration of employees to bring about equal remuneration; and
5.9 Monitor and review the process annually.

Should you require any further information please feel free to contact Manisha Maganbhai-Mooloo on (011) 895 1000 or manisha.mooloo@adamsadams.com