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The Wage War: Equal Pay for Work of Equal Value

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The Wage War: Equal Pay for Work of Equal Value

14th February 2018

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Equal pay for work of equal value has never been more relevant than now. It is a well-known fact that for many years, due to our unjust past, many employees’ remuneration exceeded that of their Black, Coloured, Asian, persons with disabilities and female counterparts. Employees that would have kept quiet about the disparity 25 years ago, has found that labour legislation has finally given them a voice, with legal repercussions attached to it, when there is non-compliance.

The International Labour Organisation Equal Remuneration Convention 1951 (No. 100), which South Africa ratified in 2000, obliges ratifying member-states to give effect to the principle of equal pay / remuneration for men and women workers for work of equal value.

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The Minister of Labour, Mildred Oliphant, issued a Code of Good Practice on Equal Pay/Remuneration for Work of Equal Value on the 1st of June 2015. This was issued in accordance with Section 54(1) of the Employment Equity Act, 55 of 1998, as amended.

The Code promotes “the elimination of unfair discrimination in respect of pay/remuneration by applying the principle of equal pay/ remuneration for work of equal value.”

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This must be read in conjunction with Section 9(3) of the Constitution of the Republic of South Africa, 108 of 1996 (hereafter referred to as the ‘Constitution’) whereby it is stated that “the State may not unfairly discriminate directly or indirectly against anyone on one or more grounds, including race, gender, sex, pregnancy, marital status, ethnic or social origin, colour, sexual orientation, age, disability, religion, conscience, belief, culture, language and birth.”
Section 9(4) of the Constitution, further states that “no person may unfairly discriminate directly or indirectly against anyone on one or more grounds in terms of subsection (3). National legislation must be enacted to prevent or prohibit unfair discrimination.”

What must employers do?
Employers must remove all discriminatory employment policies and practices that doesn’t promote and/or create equal opportunities in the workplace. 

This would entail that employers must take the necessary steps to eradicate differences in terms and conditions of employment, including remuneration, of employees who perform similar or substantially the same work or work of equal value.

Equal remuneration for work of equal value means that work can no longer be undervalued simply because the person performing the work is Black, Coloured, Asian, a person with a disability or female. This addresses a specific aspect of workplace discrimination that was until recently tolerated by most employees in South Africa.

How will employers be able to determine whether this type of discrimination exists in their workplace?

The following three key questions must be answered:

  1. Are the jobs that are being compared the same, substantially the same or of equal value in terms of an objective assessment?
  2. Is there a difference in the terms and conditions of employment, including remuneration, of the employees in the jobs that are being compared?
  3. If there are differences in the terms and conditions of employment, can these be justified on fair and rational grounds?

If the answers to any of these questions are yes, then unfair discrimination may be present in the workplace.
Employers must however take cognisance of the fact that not all differences in terms and conditions of employment, including remuneration of employees (by the same employer), signify unfair discrimination where the aggrieved employee does perform the same, similar or work of equal value.

The Employment Equity Act, 4 of 1998 (hereinafter referred to as ‘The Employment Equity Act), expressly recognises that paying employees different salaries for performing work of equal value, amounts to discrimination if the reason is linked to one of the prohibited grounds. If employees rely on an unlisted ground, the onus rests on them to prove that the discrimination is irrational or unfair.
A difference in remuneration will only constitute unfair discrimination if the differences are directly or indirectly based on race, sex, gender, disability or any other listed ground or on any other arbitrary ground.

How would the employer evaluate jobs?
It necessitates that an objective appraisal of jobs be conducted so that the discrimination based on race (that previously applied in South Africa) be eradicated for good.
The basic criteria (used as a yardstick in the Code of Good Practice on Equal Pay/Remuneration for Work of Equal Value) used to determine the value of jobs by an employer are:

  1. The responsibility demanded of the work, including responsibility for people, finances and material;
  2. The expertise, qualifications, including prior learning and experience, required to perform the work (whether formal or informal);
  3. Physical, intellectual and emotional determination essential to perform the work; and
  4. The valuation of working conditions may include an assessment of the physical environment, psychological conditions, time and geographical location where the work is performed.

It is advisable that these four criteria should be utilised when every job evaluation is being conducted. These four criteria are considered to be adequate for appraising all the responsibilities performed in a workplace, irrespective of the economic sector in which the business functions.

Factors justifying differentiation in remuneration
When will the discrimination (the differentiation) be considered fair?
Differentiation not based on a listed ground or any arbitrary ground in accordance with Section 6(1) of the Employment Equity Act, deems the differentiation to be fair and justifiable unless the contrary can be proven. 
It is not unfair discrimination if the differentiation is fair and rational based on any one or a combination of the following factors as stated in Section 6 of the Employment Equity Act:

  1. The individual’s respective seniority or length of service;
  2. The individuals’ respective qualifications, ability, competence, or potential above the minimum acceptable levels required for the performance of the job;
  3. The individual’s respective performance, quantity or quality of work, provided that employees are equally subject to the employer’s performance evaluation system, and that system is consistently applied;
  4. Where an employee is temporarily employed in a position for purposes of gaining experience or training and, as a result, receives different remuneration or enjoys different terms and conditions of employment;
  5. The existence of a shortage of relevant skill in a particular job classification etc.

It will furthermore not be considered unfair discrimination when a potential person is excluded on the strength of an inherent requirement of a job.

A practical example from a recent case at the CCMA will illustrate how these principles are applied practically

In South African Municipal Workers Union obo Armstrong and Others v Nelson Mandela Metropolitan Municipality, Case number: ECPE3994-16: (2016) 11 BALR 1260 (CCMA), Commissioner J Gruss, had to determine whether the Employer paid two employees higher salaries than other colleagues performing the same work, would amount to unfair discrimination.
Commissioner Gruss indicated in paragraph 7 that “one of the chief agendas of the Constitution is to establish a society that enjoys equal enjoyment of all rights and freedoms and that is free from unfair discrimination.”  By implication the Constitution aims to bring equality and similar freedom into the workplace.

The Commissioner applied the criteria alluded to above and came to the conclusion that the two Employees were remunerated at a higher salary scale than their counterparts due to their work experience, expertise and work history. The differentiation was therefore justified and did not amount to unfair discrimination. The Applicants’ case was therefore dismissed.

Conclusion
An audit must be conducted by the Employer. The latitude of the audit to be conducted must enable the Employer to identify inequalities in remuneration on account of gender, race, disability or any other arbitrary ground.  Jobs that would be subject to the audit will have to be identified and/or selected. It is of paramount importance to ensure that job descriptions are in place for the jobs that have been selected for auditing purposes.
Similar / same or of equal value jobs must be compared to establish if any inequalities exist, and whether or not the inequality constitutes unfair discrimination. Female-dominated jobs must be compared to male-dominated jobs as well as other jobs that may have been historically undervalued due to race, disability or any other discriminatory grounds.  Reasons for differentiating must be sought to ensure that they are rationally justifiable.  If it is found that the differentiation is not rationally justifiable, the Employer must determine how best to eradicate the inequalities that have been identified. This must be done without reducing the remuneration of the affected employees to establish equal pay/remuneration for work of equal value. This process must be monitored and reviewed annually.

Written by Helena Roodt, SchoemanLaw Inc

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