By Nicci Whitear-Nel (BA LLB) – Senior Lecturer – School of Law, University of KwaZulu-Natal
In the Global Gender Gap Index, which measures different aspects of gender based inequality, South Africa ranks 18th out of 142 countries. However, when the specific category of wage inequality is examined, South Africa ranks 83rd out of 142 countries. This shows that although South Africa has made significant progress towards achieving gender equality, the gender pay gap remains a significant problem.
There have been some amendments to the Employment Equity Act 55 of 1996 to address this aspect. They provide serious motivation for employers to ensure that they identify and eradicate pay inequality based on unfair discrimination in the workplace. The statutory inclusion of the ‘equal pay for equal work’ principle includes ‘equal pay for work of equal value’ and equal pay for work which is substantially similar, even if not identical. It is important to note that ‘equal pay’ claims are not limited to claims relating to differing rates of remuneration, but also to differences in any benefits or term or condition of employment: for example leave, bonus, pension fund or provident fund provisions.
Regulations promulgated in terms of the Employment Equity Act provide for the criteria and methodology by which work of equal value should be assessed. Some of the criteria used to assess whether the work is of equal value require considering the responsibility involved in performing the work (including responsibility for people, finances and material), the skills and qualifications required (both formal and informal and including communication, interpersonal, problem solving and analytical skills and also prior learning), the physical, emotional and psychological effort involved in the work; the conditions under which the work is performed and the geographical place (urban or rural) and time (night or day shift) when the work is performed. The regulations make it clear that employers have to be proactive in identifying inequality based on discrimination in workplace pay and in eliminating it. While the Labour Court is the primary adjudicator of unfair discrimination cases, the amendments to the Employment Equity Act increase the jurisdiction of the CCMA to arbitrate such cases and will likely result in an influx of claims brought there on this basis. All cases must first be referred to the CCMA for conciliation regardless of whether the CCMA or Labour Court will ultimately decide the case.
Equal pay cases are a species of unfair discrimination cases. Such cases must generally be referred to the CCMA within six months of the dispute arising. However, remuneration is often treated as confidential and an employee experiencing pay discrimination may only learn of it when they eventually obtain information concerning the remuneration of colleagues, even if the discrimination has ended by then. In this type of case, the six month time period would only start running from the time the employee became aware of the discrimination. Where the discrimination is ongoing, the six month period does not even start running because the discrimination is continual and repeated each time the employer pays the discriminatory wages. The six month period would only start running when the employer stops paying the differentiated wages and ends the discrimination.
A recent case dealing with a claim based on s 6 (4) of the EEA (the ‘equal pay for work of equal value’ provision) is that of Pioneer Foods (Pty) Ltd v Workers Against Regression (C 687/15). In this case a collective agreement provided that newly appointed employees were to be paid at a rate of 80% of the rate paid to longer serving employees. The commissioner found that this was unfair and irrational and amounted to unfair discrimination. However, on appeal the Labour Court found that it was not irrational and arbitrary to differentiate between employees on account of their length of service and that the employer was not therefore guilty of unfair discrimination. The Labour Court held that, to the contrary, ‘there is quite manifestly a rational connection between using length of service as a factor determining pay, and the objective of recognising long service and loyalty of existing employees... Moreover,...treating people differently in the workplace in accordance with their length of service with the employer does not impair their fundamental human dignity or affect them adversely in a comparably serious manner.’
In another recent case the court found that paying an employee less on the basis that she was employed at a different geographical location to her colleagues amounted to unfair discrimination since the employer could provide no justification for paying the employees differently based on where they were stationed. The court said that given the history of South Africa, paying employees different wages based only on where in the country they were working was anathema to the kind of society envisaged in the Constitution. The claimant was awarded compensation. The regulations do provide for factors that would justify wage differentials – including cost of living differences between places, and skills shortages in certain areas. The employer in this case however chose simply to deny the discrimination and did not even attempt to provide any justification for it. Poor work performance, and regular unjustified absenteeism by an employee has also been held to be a justifiable reason for paying an employee less than their colleagues.
In order for a case alleging unfair pay discrimination to succeed, the employee must be able to prove that, in fact, they are paid less than their colleagues. The colleagues who are paid more must be specifically identified. They would be referred to as the ‘comparators’.’ It is not sufficient for the employee just to make a bald allegation of being paid less. Then, the employee must show that the work being performed is the same or of equal value to the comparators. Next, the employee must identify the reason for being paid less – and it must be an unfairly discriminatory reason. Merely alleging unfair discrimination is not sufficient – the employee has to show what the discriminatory reason is and prove that the discriminatory reason is in fact the cause of the differentiation. It is not enough to show that the employer is paying different wages on an arbitrary, ad hoc basis. There must be a pattern relating to an unfairly discriminatory reason. Such reasons would include race, sex, gender, religion, marital status and any other reason which would have a negative impact on the dignity of the employee if they were treated differently for that reason.
The most common reason for equal pay claims to fail is because the employee is not able to prove a link between the pay difference and a discriminatory reason. For example, there was a recent case where the employee claimed unfair gender discrimination on the basis that she was paid less than her male colleagues. However, the court found that the evidence did not demonstrate that the difference in gender was the dominant reason for the differentiation in remuneration and her claim therefore failed.
It is quite common for employees to refer equal pay disputes without even being aware of the reason why they are being paid less than their colleagues. In such a case, the CCMA commissioner has a duty to interrogate the facts so as to try and identify the reason, but, ultimately, if an unfair discriminatory reason is not identified the claim will fail. There is a great deal of preparatory work to be done before lodging an equal pay dispute!
At the 29th Annual Labour Law Conference (ALLC), taking place for the first time at Emperors Palace from 24 to 25 August 2016, there will be a session focusing on the 2014 amendments to the Labour Relations Act and their impact on employment. A presentation at the ALLC in which the future of equal pay claims in South Africa will be discussed, which will include a comprehensive exploration of what the obligations of employers are in this regard. There will also be other presentations on the ‘financial’ aspects of employment – specifically the proposed reform to retirement law, and managing employee debt.
For bookings or more information regarding the 29th Annual Labour Law Conference from 24 to 25 August 2016 at Emperors Palace, Kempton Park Gauteng, contact Erin on 031 303 9852 or email . Visit http://www.annuallabourlawconference.co.za/
About the Author
Nicci Whitear-Nel (BA LLB) is a Senior Lecturer at the University of KwaZulu-Natal’s School of Law. She practiced as an attorney before joining the university. She maintains links with the legal profession, and believes this is beneficial to her and to her students as it feeds both her research and teaching functions. She has written four books and is also qualified as a Commissioner of the Commission for Conciliation, Mediation and Arbitration. She is also presently a consultant at Austen Smith attorneys in Pietermaritzburg.