updated 3:45 PM UTC, Jul 28, 2018
HOT NEWS
Assign Services (Pty) Limited V National Union of Metalworkers Union of South Africa And Others (Cas
Why it's important for HR to get out in front of workplace disruption
Countries must compete for migrant workers to boost their economies
Strike Season 2018
There's a new way of measuring poverty in South Africa: Here's how it works
The World Bank is finding new ways to understand South Africa's issues
The remarkable story of hope: how attitudes to drug-resistant TB changed
Migration: Economic Development In Africa, Report 2018 (UNCTAD)
Busa: Busa says labour laws signals a new era of labour stability
Employment Law Amendment Bills
A+ A A-

Labour Legislation Index

Code of Good Practice on Equal Pay / Remuneration for Work of Equal Value

CODE OF GOOD  PRACTICE   ON EQUAL  PAY / REMUNERATION   FOR WORK  OF EQUAL  VALUE

No.  448

1 June 2015

 

1.      OBJECTIVES

2.      SCOPE

3.      LEGAL  FRAMEWORK  AND PRINCIPLES

4.      ELIMINATING UNFAIR  DISCRIMINATION IN RESPECT OF PAY/ REMUNERATION

5.      EVALUATING JOBS

6.      COMPARING AND EVALUATING MALE-  AND FEMALE-DOMINATED JOBS

7.      FACTORS JUSTIFYING DIFFERENTIATION IN PAY/ REMUNERATION

8. PROCESS  FOR  EVALUATING JOBS  FOR  THE  PURPOSE  OF EQUAL  PAY/ REMUNERATION  FOR WORK  OF EQUAL  VALUE

 

1.      OBJECTIVES

1.1. The objective  of this  Code  is to provide  practical  guidance  to employers  and employees  on how to apply the principle of equal pay/remuneration  for work of equal value 1 in their workplaces.

1.2. This  Code  seeks  to  promote  the  implementation   of  pay/remuneration   equity  in  the  workplace  by employers, including the State, employees and trade unions through human resources policies, practices and job evaluation processes.

1.3. The Code further aims to encourage employers to manage their pay/remuneration  policies, practices and proper consultation  processes  within a sound governance  framework in order to drive and maximise  on the  principle   of  equal  pay/remuneration   for  work  of  equal  value  that  is  fair,  free  from  unfair discrimination  and consistently  applied.

2. SCOPE

2.1. This Code is issued in terms of section 54 of the Employment  Equity Act, 1998 (Act No. 55 of 1998) as amended, its regulations  and other Codes issued in terms of the Act.  In particular,  this Code must be read in conjunction  with-

2.1.1. the regulations  made by the Minister  of Labour in terms of section  6(5) of the Employment Equity  Amendment  Act, 2013 on the criteria  and methodology  for assessing  work  of equal value';  and

2.1.2. the Code of Good Practice on the Integration  of Employment  Equity  into Human Resources Policies,  Practices  and Procedures  (RR  Code),  in particular  Part B dealing  with  Terms  and Conditions of Employment.

2.2. This Code applies to all employers and employees covered by the Act.  To obtain greater clarity as to the definition  of an employee,  reference  should be made  to the Code of Good Practice:  Who  is an Employee issued by the National Economic Development  and Labour Council (NEDLAC) in terms of the Labour Relations Act, 1995 (Act No.66 of 1995), as amended.

2.3. 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.

2.4. The term "remuneration"  as defined in the Basic Conditions  of Employment  Ace,  1997 (Act No. 75 of 1997), as amended and other labour legislation includes any payment in money or in kind, or both, made or owing to any person in return for working for another person, including the State.

2.5. Employers  must,  therefore,  examine  all aspects  of their  pay/remuneration  policies  and practices  to ensure compliance with the principle of equal pay/remuneration  for work of equal value.

2.6. The  code  provides   guidance  when  interpreting   the  Employment   Equity  Act  (the  Act)  and  its regulations.

3. LEGAL  FRAMEWORK  AND PRINCIPLES

3.1. Section  9(3)  of  the  Constitution  of the  Republic  of  South  Africa  states  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".

3.2. Furthermore,   Section  9(4)  of  the  Constitution   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".

3.3. The International  Labour Organisation (ILO) 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.

3.4. The obligation to eliminate unfair discrimination  in respect of pay/remuneration  arises under Chapter 2  of the  Act.  Section  5  of  the  Act  requires  employers  to  take  positive  steps  to  eliminate  unfair discrimination  in their workplaces.

3.5. Every employer must take steps to promote  equal opportunity  in the workplace by eliminating unfair discrimination  in any employment policy or practice.

3.6. Employers must ensure that pay/remuneration  policies and practices are applied consistently  without unfair  discrimination  on the basis  of anyone   or combination  of the listed or on any other arbitrary grounds.

3.7. Section 6(4) of the Act, which came into effect on 1 August 2014, provides that 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 anyone   or more of the grounds listed in subsection (1) or on any other arbitrary ground, is unfair discrimination.

3.8. Section 27 of the Act requires  designated  employers  to report on the pay/remuneration  and benefits received   by   employees   in  each   occupational   level   of  their   workforce,   and  where   there   are disproportionate  income  differentials  or unfair  discrimination  by virtue of a difference  in terms and conditions  of  employment,  employers  must  take  steps  to  progressively  reduce  these  differentials. Guidance   in  this  regard  is  provided   for  in  the  Code  of  Good  Practice  on  the  Integration   of Employment Equity into Human Resources Policies, Practices and Procedures (HR Code).

3.9. Regulations  2 to 7 of the Employment  Equity Regulations,  2014, published  on 1 August 2014 cover the definition of work of equal value, criteria and the methodology  for assessing work of equal value.

4. ELIMINATING UNFAIR  DISCRIMINATION IN RESPECT OF PAY/ REMUNERATION

4.1. An employer must,  in order to eliminate unfair discrimination,  take steps to eliminate differences  in terms  and  conditions  of  employment,  including  pay/remuneration,   of  employees  who  perform  the same or substantially the same work or work of equal value that are directly or indirectly based on one or more listed  or on any other arbitrary ground.

4.2. The  principle  of  equal  pay/remuneration   for  work  of  equal  value  addresses  a  specific  aspect  of workplace  discrimination   and  the  undervaluing  of  work  on  the  basis  of  a listed  or  on  any  other arbitrary ground in terms of Section 6(1) of the Act.

4.3. In South Africa,  for historical  reasons,  the undervaluing  of work has the greatest  significance  when examining work performed  by employees  who are female, black or those with disabilities.  However, differences   based   on  any  of  the   listed   or  any  other   arbitrary   ground   may   constitute   unfair discrimination.

4.4. When examining  whether  the obligation  to apply pay/remuneration  equity in the workplace  is being complied with, three key issues require scrutiny-

4.4.1. Are the jobs  that  are being compared  the same,  substantially  the same or of equal  value in terms of an obj ective assessment?

4.4.2. Is there a difference  in the terms and conditions  of employment,  including pay/remuneration, of the employees in the jobs that are being compared?

4.4.3. If there are differences  in the terms and conditions  of employment,  can these be justified  on fair and rational grounds?

4.5. Differences  in terms and conditions  of employment,  including pay/remuneration,  of employees of the same employer  may not necessarily  constitute  unfair  discrimination  where  the complainant  and the comparator do not perform the same, similar or work of equal value.

4.6. A difference  in pay/remuneration  will only be unfair discrimination  if the differences  are directly or indirectly based on race, sex, gender, disability or any other listed or on any other arbitrary ground.

5. EVALUATING JOBS

5.1. Article 3 of the ILO Equal Remuneration  Convention  1951 (No. 100) requires that "measures shall be taken to promote  objective appraisal of jobs  on the basis of the work to be performed".

5.2. While the Convention  only applies to equal pay/remuneration  for work of equal value between  men and women, the need to conduct an objective appraisal of jobs is a necessary  element of applying the principle  in all contexts,  in particular, to eliminate residual  structural inequalities  related to legislated and practised racial discrimination  that applied in the labour market in South Africa.

5.3. In  order  to  ascertain   the  value  of  the  job   for  the  purpose  of  applying  the  principle   of  equal pay/remuneration   for work of equal value, an objective  assessment  in accordance  with relevant  and appropriate criteria must be undertaken.

5.4. The basic criteria commonly used to evaluate the value of jobs by an employer are-

5.4.1. The  responsibility  demanded  of the  work,  including responsibility for  people,  finances and  material.   This includes tasks that have an impact on who is accountable  for delivery of the  enterprise's   or  organisation's   goals,  for  example,  its profitability,  financial  soundness, market coverage and the health and safety of its clients. It is important to consider the various types of responsibility  associated  with the enterprise's  or organisation's   goals independently from the hierarchical  level of the job or the number of employees it involves supervising.

5.4.2. The  skills,  qualifications, including prior  learning   and  experience required   to  perform the  work,   whether   formal   or  informal.   This  includes  knowledge  and  skills  which  are required  for  a job.  What  is important  is not how  these  were  acquired  but  rather  that their content corresponds  to the requirements  of the job being evaluated.  Qualifications  and skills can  be  acquired  in various  ways  including  academic  or vocational  training  certified  by  a diploma,  paid  work  experience  in the  labour  market,  formal  and  informal  training  in the workplace and volunteer work.

5.4.3.    Physical,   mental   and  emotional effort  required   to perform   the  work.  This refers to the difficulty related to and the fatigue and tension caused by performing job tasks. It is important not to only consider physical efforts but also take mental and psychological  effort into consideration.

5.4.4.    The   assessment  of  working    conditions  may   include   an   assessment  of  the   physical environment,  psychological conditions, time  when  and  geographic  location  where   the work  is performed.  For example, one may consider factors such as noise levels and frequent interruptions  for office jobs as conditions of work.

5.5. Best  practice  indicates  that  the  four  criteria  should  form part  of every job  evaluation.  These  four criteria  are  generally  regarded  as  being  sufficient  for  evaluating  all  the  tasks  performed   in  an organisation,  regardless of the economic sector in which the enterprise operates.

5.6. The weighting  attached to each of these factors may vary depending on the sector, employer and the job  concerned.  These  factors  do  not  constitute  any  particular  preference  in  respect  of  weighting allocation.

5.7. In addition,  employers  may  take  into  account  the  conditions  under  which  work  is  performed  in evaluating the value of work. However,  many employers  take working conditions  into account when determining  pay/remuneration   by, for example,  paying  an allowance,  rather than  as part  of the job evaluation process.

6. COMPARING AND EVALUATING MALE-  AND FEMALE-DOMINATED JOBS

6.1. Discrimination  in pay/remuneration  based  on the sex of employees  is an international  phenomenon found to a greater or lesser degree in all countries. The ILO has suggested that due to-

6.1.1.    stereotypes with regard to women's  work;

6.1.2.    traditional job  evaluation  methods  that were designed  on the basis  of male dominated jobs; and

6.1.3.    weaker bargaining power on behalf of female workers."

6.2. The use of job evaluation does, in itself, not ensure that there is an absence of unfair discrimination.

6.2.1. It is  acknowledged  that  traditional  job  evaluation  methods  were  designed  on the basis  of male-dominated jobs.

6.2.2. Predominantly  female jobs  often involve different requirements  from those of predominantly male jobs, whether in terms of qualifications,  effort, responsibility or working conditions.

6.2.3. Traditionally,  female-dominated  jobs  were evaluated based on methods  designed mainly  for male-dominated  jobs, which partly accounts for wage discrimination.

6.2.4. It is important to be vigilant when selecting the method of job evaluation and to ensure that its content is equally tailored to both female-dominated  and male-dominated  jobs.  For instance, responsibility  for money or equipment is often valued more than other forms of responsibility.

6.2.5. Jobs  involving  caring  for others  or cleaning  may be undervalued  because  of the  erroneous assumption  that  the  skills involved  in these jobs  are intrinsic  to nature  of women  and not acquired through learning and experience.'

6.3. Employers  may therefore  be required  to establish the value  of male- and female-dominated  jobs  in order  to be  able  to  ascertain  whether  particular  jobs  have  been  undervalued  and  to  align  female­ dominated jobs with comparable male-dominated jobs in the organisation.

6.4. The  fact  that  there  are  no  comparable  male-dominated  jobs  to  female-dominated  jobs  within  the employer's  organisation,  does not necessarily  imply that there is no discrimination  on grounds of sex or gender (or other prescribed grounds).

6.5. An employee may base a claim on the ground that they would have received higher pay/remuneration if they were not female.  To succeed in such a claim, the employee would have to show that a male employee hired to perform the work would have been employed on different terms and conditions  of employment.

7. FACTORS JUSTIFYING DIFFERENTIATION IN PAY/ REMUNERATION

7.1. Once  jobs  have  been  evaluated  and/or  graded,  the  various  jobs  are  allocated  pay/remuneration packages  in accordance  with the pay/remuneration  philosophy  of the employer  and the value of the jobs. Employers are required to ensure that unfair discrimination  does not occur at any of these stages.

7.2. Where employees perform work that is the same or substantially the same. or is work of equal value, a difference   in  terms   and  conditions   of  employment,   including   pay/remuneration,    is  not  unfair discrimination  if the differentiation  is not based on a listed or on any other arbitrary  ground in terms of section 6(1) of the Employment  Equity Act, as amended.

7.3. Regulation  7 of the Employment  Equity regulations  lists a number of grounds which are commonly taken into account  in determining  pay/remuneration.   Subject to what is stated below, it is not unfair discrimination  if the difference  is fair and rational  and is based on anyone   or a combination  of the following factors -

7.3.1.    the individuals'  respective  seniority or length of service;

7.3.2.    the individuals'  respective qualifications,  ability, competence or potential above the minimum acceptable levels required for the performance  of the job;

7.3.3. the individuals'  respective performance,  quantity or quality of work, provided that employees are   equally   subj ect   to   the   employer's    performance   evaluation   system,   and   that   the performance  evaluation system is consistently applied;

7.3.4.    where  an  employee  is demoted  as  a result  of organisational  restructuring  or for any  other legitimate reason without a reduction in pay/remuneration  and fixing the employee's  salary at this level until the pay/remuneration  of employees in the same job category reaches this level;

7.3.5.    where an individual  is employed temporarily  in a position for purposes of gaining experience or training  and as a result receives  different  pay/remuneration  or enjoys different  terms and conditions of employment;

7.3.6.    the existence of a shortage of relevant skill in a particular job classification;  and

7.3.7.      any  other  relevant   factor  that  is not  unfairly   discriminatory    in terms  of Section  6(1)  of the  Act.

7.4. These   factors   may  not  be used  to determine   pay/remuneration     in a manner   that  is biased   or indirectly discriminates against   an  employee   or  group  of  employees    based   on  a listed  or  on  any  other  arbitrary ground  in terms  of section   6( 1) of the  Act.

8. PROCESS  FOR  EVALUATING JOBS  FOR  THE  PURPOSE  OF EQUAL  PAY/ REMUNERATION  FOR WORK  OF EQUAL  VALUE

8.1.       The following process may be used to determine equal pay/remuneration  for work of equal value-

8.1.1. determine  the scope of the audit to be conducted to identify inequalities  in pay/remuneration on account of gender, race, disability or any other listed or on any other arbitrary ground;

8.1.2.    identify jobs that would be subjected to the audit;

8.1.3.    ensure that job profiles or job descriptions exist and are current before evaluating jobs;

8.1.4. utilise  a job  evaluation  and/or grading  system that is fair and transparent  and does not have the effect of discriminating unfairly on any listed or arbitrary ground;

8.1.5. compare jobs  that are the same, similar or of equal value in the employer's  own organisation or  company.  This  should  include  comparing  female-dominated  jobs  with  male-dominated jobs  as well  as other jobs  that  may have been  undervalued  due to, race,  disability  or other discriminatory  grounds;

8.1.6. select a method of comparing pay/remuneration,  both in money and kind, in the relevant jobs: this  can  be  done  by  using  either  the  average  or the  median  earning  of  employees  in the relevant jobs  as the basis for pay/remuneration  comparisons  or by using another method that will compare pay/remuneration  in a fair and rational manner;

8.1.7. identify the reasons  for differentiating  in pay/remuneration  as contemplated  by Regulation  7 in the Employment  Equity regulations and determine whether they are justifiable;

8.1.8. where  differentiation   is found  not  to be justifiable,   determine  how  to  address  inequalities identified,   without   reducing   the  pay/remuneration    of  employees   to  bring   about   equal remuneration;  and

8.1.9.    monitor and review the process annually

 

FOOTNOTES

1  In this Code, "work of equal value"  is used to include work that is the same or substantially  the same or work of equal value as referred  to in section 6(4) of the Act.

2  Any reference  to regulations  in this Code refers to the Employment  Equity Regulations,  2014.

3  BCEA Schedule  on Calculation  of Employee's   Remuneration  in terms of Section 35(5), as published  under GN 691, 23 May 2003, which provides guidance  on calculating  remuneration.

4  See, for instance, Promoting  Equity  Gender-Neutral  Job Evaluation: A Step-by-Step  Guide (ILO, Geneva, 2008) and Equal Pay: An introductory guide (lLO, Geneva, 2013).

5  Equal Pay: An introductory guide (lLO, Geneva, 2013), Part 5.

 

 

 

Last modified onSaturday, 06 June 2015 12:16
  • Gazetted: 1 June 2015
  • Gazette Number: 38837
Gary Watkins

Gary Watkins

Managing Director

BA LLB

C: +27 82 416 7712

T: +27 12 669 3289

T: +27 11 462 0982

F: +27 86 689 7862

Website: www.workinfo.com
Login to post comments

HR Associations