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By Venolan Naidoo (Senior Associate at Themis Law Chambers)

On 01 August 2014 the Employment Equity Amendment Act of 2013 (EEAA) took effect bringing with it material changes to the Employment Equity Act of 1998 (EEA). The changes were in accordance with the International Labour Organisation’s (ILO) Convention(s) and other international labour standards binding on South Africa.

In terms of the EEAA, one of the changes to the EEA was the codification of the ubiquitous principle, equal pay for equal work under section 6(4) of the EEA which, in addition to pay, included the terms and conditions of employment. Section 6(4) of the EEA reads as follows:

A difference in terms and conditions of employment between employees of the same employer performing the same or substantially the same work or work of equal value that is directly or indirectly based on any one or more of the grounds listed in subsection (1) or on any other arbitrary ground is unfair discrimination“.

Following the above citation of section 6(4), and read in conjunction with the latter, section 6(1) reads as follows:

No person may unfairly discriminate, directly or indirectly, against an employee, in any employment policy or practice, on one or more grounds, including race, gender, sex, pregnancy, marital status, family responsibility, ethnic or social origin, colour, sexual orientation, age, disability, religion, HIV status, conscience, belief, political opinion, culture, language, birth or on any other arbitrary ground

It is thus evident that, in addition to the terms and conditions of employment, the EEAA had extended the application of the codified principle, regarding pay discrimination as stated above, to further include on any other arbitrary ground as a basis upon which an unfair pay discrimination claim can be brought.

The purpose of the article is to understand the interpretation and application, in respect of recent case law, relating to pay discrimination in terms of section 6(4) of the EEA based on any other arbitrary ground.

Before setting forth to look at the recent case law, the EEAA’s regulations also took effect providing guidance in respect of section 6(4). In terms of Regulation 6, in assessing whether work is of equal value the following criteria, objectively assessed, must be taken into account:

  • The responsibility demanded of the work, including responsibility for people, finances and material;
  • The skills, qualifications, including prior learning and experience required to perform the work, whether formal or informal;
  • Physical, mental and emotional effort required to perform the work;
  • To the extent that it is relevant, the conditions under which work is performed, including physical environment, psychological conditions, time when and geographic location where the work is performed; and
  • Any other factor relevant to assess the value of the work.

Importantly, Regulation 7 states inter alia that if there is a difference in the terms and conditions of employment, including remuneration, it is not unfair discrimination if the difference is fair and rational, and is based on any one or a combination of the following grounds:

  • The individuals’ seniority or length of service;
  • The individuals’ qualifications, ability, competence or potential above the minimum acceptable levels required for the performance of the job;
  • The individuals’ performance, quantity or quality of work, provided that employees are equally subject to the employer’s performance evaluation system, that the performance evaluation system is consistently applied;
  • Where an employee is demoted as a result of organisational restructuring or for any other legitimate reason without a reduction in pay and fixing the employee’s salary at this level until the remuneration of employees in the same job category reaches this level;
  • Where an individual is employed temporarily 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;
  • The existence of a shortage of relevant skill, or the market value in a particular job classification; and
  • Any other relevant factor that is not unfairly discriminatory in terms of section 6(1) of the Act.

In distinction to Regulation 6, Regulation 7 accordingly sets out the criteria in which a claim under section 6(4) can be determined to be fair and/or rational.

In June 2015, the Minister of Labour published the Code of Good Practice on Equal Pay/Remuneration for Work of Equal Value, under gazette number GN 448 in CG 38837 of 01 June 2015, providing inter alia even further practical guidance in conjunction with the regulations.

It is also relevant to mention that in terms of section 11, if a claim is brought under section 6(4) on a listed ground, the onus would rest on the employer to prove that the allegation did not take place or it is rational and not unfair, or is otherwise justifiable. In contrast, if a claim is brought under section 6(4) based on any other arbitrary ground, the onus rests on the complainant employee to prove that the conduct complained of is irrational, amounts to discrimination, and the discrimination is indeed unfair.

Although close to two years from the amendments promulgation, it is salient to look at recent case law. In the Labour Court of South Africa (LC), two recent decisions dealt with inter alia pay discrimination (equal pay for equal work) based on an arbitrary ground.

In the reported decision of Duma v Minister of Correctional Services & Others [2016] 6 BLLR 601 (LC) the court found that the employee was unfairly discriminated due to a pay difference i.e. equal pay for equal work, based on an arbitrary ground. The facts before the court took place prior to the amendments of the EEAA. The court of course applied principles of law that were analogous, at the time, to the amendments that are now in effect. In addition, it confirmed that “arbitrariness has long been recognised as one of the hallmarks of discrimination“. It is therefore relevant to discuss Duma insofar as it relates to section 6(1) & (4) of the EEA viz-a-vizon any other arbitrary ground“.

The facts are as follows, the employee brought a claim that her employer unfairly discriminated against her on an arbitrary ground by not placing her on a higher salary. The employee claimed that other employees performing the same or similar work earned a higher salary in (other) different locations. As indicated, to the employee’s claim this constituted an arbitrary ground. The court held inter alia that the employee was unfairly discriminated against based on the said arbitrary ground.

The findings of Duma demonstrate that pay discrimination (equal pay for equal work) as an arbitrary ground can even extend to an employee’s geographical location which must have the ability to impair the dignity of that person. However, and quite importantly, that an employer must nonetheless be able to indicate the necessary, and rational, basis in the differentiating treatment between employees in other locations performing work of equal value to show it is not unfair discrimination.

In the more recent reportable judgment of Pioneer Foods (Pty) Ltd v Workers Against Regression (WAR) and Others (C687/15) [2016] ZALCCT 14 (19 April 2016) which in fact dealt with inter alia the application of section 6(1) & (4) of the EEA relating to on any other arbitrary ground. Pioneer Foods was an appeal in terms of section 10(8) of the EEA to the LC, where the court upheld an appeal against a CCMA decision by finding there was not any unfair pay discrimination based on any other arbitrary ground.

The facts are as follows, the employees were previously employed through a temporary employment service (TES) i.e. labour broker where they in turn performed services to the (client) employer. Pursuant to negotiations with the majority union, FAWU, the employees concluded permanent employment contracts with the employer. As a consequence, they would perform the same or similar services but were bound to a collective agreement which provided that new entrants would be paid an eighty percent rate for the first two years in comparison to other employees performing the same or similar services in excess of two years. The employees claimed, though not very explicit and/or cogent in their papers, that their salary rate (80% rate) constituted an unfair pay discrimination as they previously rendered services to the employer but through the TES. It was hence claimed they were unfairly discriminated against due to their previous status as employees of the TES. The court in Pioneer Foods had to determine whether such pay rate differentials constituted an unfair pay discrimination based on any other arbitrary ground as envisaged in terms of section of 6(4) of the EEA. It held that the differentiation complained of was not irrational, not based on an arbitrary ground, nor unfair.

In conclusion, the findings of both Duma and Pioneer Foods demonstrate that the test for determining unfair pay discrimination based on an arbitrary ground requires more than a mere differentiation in the workplace, which the EEA itself does not regulate, but must show it is irrational (i.e. there was no legitimate purpose for the differentiation). Moreover, when determining unfair (pay) discrimination on an arbitrary ground there must be an element to potentially impair fundamental human dignity or would otherwise affect the individual in a comparably serious manner.

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