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Employers advised to guard against pay discrimination claims

Employers advised to guard against pay discrimination claims

24th July 2014

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Employers should scrutinise their pay practices to ensure that disparities in remuneration are objectively justifiable and are not grounds for claims of unfair discrimination.

Talita Laubscher, Director at pan-African corporate law firm, Bowman Gilfillan commented, ”This follows the inclusion of section 6(4) in the Employment Equity Act which now expressly accommodates claims of equal pay for work of equal value in the general prohibition against unfair employment discrimination.”

Ms Laubscher said that the date on which this amendment will take effect is to be determined by the President. “While we have no indication at this stage of when this will be, the Employment Equity Amendment Act, 2013 was approved by Parliament and it is therefore just a matter of time before section 6(4) takes effect.”

Section 6(4) provides that a difference in the terms of employment between employees of the same employer performing substantially the same work or work of equal value that is based on any of the grounds listed in section 6 (1) of the Act (for example, race, gender, age, language and sexual orientation) or any other impermissible arbitrary ground is unfair discrimination.

To assess whether an employer has contravened the legislation it must be established that the work is the same or similar, or of equal value. Factors to be considered include the responsibility demanded of the work, the skills and qualifications required, and the physical, mental and emotional effort required to perform the work. The conditions under which work is performed may also be relevant.

“If a disparity in remuneration is based on a ground listed in section 6(1) or any impermissible arbitrary ground and there is no justification for such disparity, the employer will be at risk of a finding of unfair discrimination. In these circumstances, the Labour Court has wide ranging powers as regards the relief it might order,” said Ms Laubscher.

These include that the employer eliminates unfair discrimination and pays damages and compensation to the employee.

However, she added that there are various factors that could justify differentiation in pay, including the individuals’ respective seniority or length of service, and their qualifications, ability, competence or potential above the minimum acceptable levels required for the performance of the job. The individuals’ respective performance, quantity or quality of work can also be taken into account, provided they are subject to the same evaluation system.

Speaking this week at a seminar hosted jointly by Bowman Gilfillan and Hay Group on equal pay for equal work, Sanet de Lange of Hay Group, the global management consulting firm said: “Work measurement, or job evaluation, involves job analysis to enable organisational effectiveness by matching people and jobs, and by knowing what work is worth.

“The job evaluation system should be logical, systematic and objective. It needs to be updated to remain valid and should be able to evaluate all types of jobs, catering to the uniqueness of professional and specialist positions. Fundamental to managing equal pay risk, job evaluation reduces the risk of time consuming, damaging and expensive discrimination claims.”

Shaun Barnes, Hay Group Regional Head of Reward for South Asia, Middle East and Africa commented: “Equal pay needs to be seen in the context of a more holistic analysis of HR practices if equal pay defences are to succeed. Companies need to audit their HR systems to ensure compliance with new legislation on equal pay for work of equal value.”

He said Hay Group’s work with local clients had exposed risks with regard to, amongst others, how job profiles are compiled and inconsistent payroll and remuneration management leading to internal inequality.

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