The phrase “equal pay for equal value” has echoed across South Africa for many years. From industrial action and workplace debates to boardroom discussions, employees naturally compare their remuneration with that of their colleagues. Where significant differences emerge, questions may arise as to whether those differences are justified or whether they amount to unfair discrimination. The legal position, however, is more nuanced than a simple comparison of two salaries.

The Employment Equity Act 55 of 1998 (EEA) prohibits unfair discrimination in the workplace. Section 6(4) specifically provides that a difference in terms and conditions of employment between employees of the same employer, based on one or more listed grounds, or on an arbitrary ground, constitutes unfair discrimination. Remuneration is therefore capable of forming the basis of an unfair discrimination claim. However, the mere fact that two employees receive different salaries does not, in itself, establish discrimination.

An employee seeking to challenge a remuneration difference must establish the necessary factual and legal connection between the differentiation and the alleged prohibited or arbitrary ground. This distinction was recently illustrated in Mbiza and Another v Rhodes University [2026] 8 BALR 883 (CCMA) and is further demonstrated by the Labour Appeal Court's decision in Passenger Rail Agency of South Africa v Hoyo [2025] 2 BLLR 160 (LAC).

When Does Pay Differentiation Become Discrimination?

Employers should distinguish between differentiation and discrimination. Employees may legitimately earn different salaries for a variety of reasons. These may include differences in experience, qualifications, responsibilities, performance, recruitment circumstances, historical salary structures, market conditions or legitimate salary benchmarking.

The existence of a salary disparity therefore does not automatically mean that an employer has discriminated against an employee. For an equal-pay claim to succeed, the employee must establish more than the fact that a colleague earns more. There must be a proper comparator and a sufficient connection between the difference in remuneration and the alleged prohibited or arbitrary ground.

Section 11 of the EEA is also important in this regard. Once an employee has established the required factual basis for an allegation of unfair discrimination, the evidentiary burden may shift to the employer to show that the complained-of conduct is not unfairly discriminatory.

This means that employers should not approach remuneration disputes on the basis that every salary difference must be eliminated. Instead, employers should be able to explain why differences exist and demonstrate that remuneration practices are objectively defensible and not based on prohibited grounds.

The Mbiza Case

In Mbiza and Another v Rhodes University, two employees, employed as handymen, challenged a disparity in remuneration between themselves and another handyman. Their argument was essentially that they performed the same work as their colleague but received less remuneration.

The applicants alleged that the differentiation amounted to unfair discrimination and sought to connect the difference in remuneration to their union membership and belief.

The University disputed the allegation. It explained that the salary differentiation arose from a historical salary benchmarking system and that the disparities were being addressed progressively through the University's remuneration processes and attrition.

The Commissioner emphasised that an unequal-pay claim cannot succeed merely because employees performing similar work receive different remuneration. The employee must establish that the differentiation is connected to the ground on which the discrimination is alleged, and the applicable legal threshold must then be satisfied.

The evidence demonstrated that the salary grades applicable to the handymen had historically been established before the applicants' appointments. Their salaries were also subject to the University's standard annual increases. Importantly, the applicants were unable to provide sufficient evidence establishing that the difference in remuneration was caused by their union membership or belief.

The CCMA therefore found that the University had not unfairly discriminated against the applicants. The case reinforces an important principle for employers: salary differentiation alone does not amount to unfair discrimination. There must be a legally recognisable basis connecting the differentiation to a prohibited or arbitrary ground.

The Hoyo Case

The same principle was considered by the Labour Appeal Court in Passenger Rail Agency of South Africa v Hoyo.

The employee had been employed by the employer since 1999 and was promoted to Production Manager in 2012. He subsequently lodged a grievance concerning, among other things, an acting allowance and the fact that two white employees who reported to him earned more than he did. The employee alleged that the remuneration difference constituted unfair discrimination on the basis of race.

The employer disputed the allegation and explained the salary differences by reference to restructuring and salary benchmarking following the integration of Transnet employees. The Labour Court initially found in favour of the employee and held that the employer had unfairly discriminated against him in terms of section 6(1) of the EEA. The employer appealed.

One of the central issues before the Labour Appeal Court was whether the Labour Court had applied the correct legal test when considering the alleged equal-pay discrimination.

The LAC found that the employee had not established that the work performed by his subordinates was the same as, substantially the same as, or of equal value to his own work. The Court further found that there was insufficient factual evidence establishing that the salary differentiation was based on race.

The fact that the comparators were white employees who earned more was therefore not, by itself, sufficient to establish racial discrimination. The LAC accordingly upheld the employer's appeal and set aside the Labour Court's decision.

The judgment serves as an important reminder that a comparator is not simply an employee who earns more money. The nature and value of the work, together with the alleged discriminatory ground and the causal connection between the two, must be properly established.

Application to Employers

These decisions provide useful guidance for employers dealing with remuneration structures and equal-pay complaints.

The first point is that employers are not required to ensure that every employee performing similar work receives precisely the same remuneration. Legitimate differences may exist and may be capable of objective justification.

The greater risk arises where an employer cannot explain why a particular employee earns less than another employee performing comparable work, particularly where the difference appears to correlate with a prohibited or arbitrary ground.

Employers should therefore be cautious about relying on historical remuneration practices without understanding their origins. A salary structure created years ago may have a legitimate historical explanation, but employers should still be able to demonstrate why the differentiation persists and whether it remains objectively defensible.

The Mbiza decision demonstrates that historical salary structures and progressive correction can provide important context. The Hoyo decision similarly demonstrates that a salary difference must be properly connected to the alleged discriminatory ground before liability can follow.

Employers should therefore ask three questions whenever a remuneration disparity is challenged:

• Why are the employees paid differently?
• Are the employees performing work that is the same, substantially the same, or of equal value?
• Can the remuneration difference be objectively explained without relying on a prohibited or arbitrary ground?

If these questions cannot be answered clearly, the employer's exposure increases.

Practical Steps for Employers

Employers should consider the following measures when managing remuneration and equal-pay risks:

Maintain a clear remuneration structure

Salary grades, job levels, market benchmarks and remuneration policies should be clearly defined and consistently applied wherever reasonably possible.

Document legitimate reasons for salary differences

Where employees performing comparable work receive different remuneration, employers should retain records explaining the reasons for the differentiation. These may include qualifications, experience, responsibilities, market conditions, historical salary structures or other objectively defensible considerations.

Conduct regular pay audits

Employers should periodically review remuneration structures to identify unexplained disparities and assess whether differences may create potential Employment Equity risks.

Identify appropriate comparators

When an employee raises an equal-pay complaint, employers should carefully assess whether the proposed comparator actually performs the same, substantially the same, or work of equal value.

Investigate allegations properly

An employee's complaint should not simply be dismissed because the employer believes the salary difference is justified. The underlying remuneration structure, comparator and alleged discriminatory ground should be investigated.

Be cautious with historical salary practices

Historical salary differences may provide a legitimate explanation, but employers should be able to demonstrate how those differences arose and whether there is a rational basis for maintaining them.

Keep proper records

Employment contracts, salary structures, job descriptions, grading systems, benchmarking information, promotion records, and remuneration reviews may become critical evidence if an unfair discrimination dispute reaches the CCMA, the Labour Court, or another forum.

Key Takeaways / Conclusion

The principle of “equal pay for equal value” does not mean that every employee performing similar work must necessarily earn the same salary.

The Employment Equity Act recognises that remuneration differentiation can become unfair discrimination where it is based on a prohibited ground or an arbitrary ground contemplated by the Act. However, an employee must still establish the necessary factual foundation for such a claim.

The recent Mbiza decision reinforces that a salary difference, standing alone, is insufficient to establish unfair discrimination. Similarly, Hoyo demonstrates that an appropriate comparator and a causal connection between the remuneration difference and the alleged discriminatory ground remain critical considerations.

For employers, the lesson is not to eliminate every difference in remuneration, but to ensure that those differences are legitimate, objectively explainable, consistently applied and properly documented.

Ultimately, employers should be able to answer a simple question when challenged:

“Why does this employee earn differently from that employee?”

A clear, objective and properly documented answer may be the difference between legitimate remuneration differentiation and a successful unfair discrimination claim.

Written by Tammy Barnard, Senior Dispute Resolution Official, CEO SA