Disproportional Pay Differentials: Prohibition in the Employment Equity Act and Thoughts on The Evidentiary Burden

The Employment Equity Act (“EEA”) requires South African designated employers to extend their commitment towards fair remuneration practices beyond the internationally principled standard of equal pay for work of equal value. Designated employers are also required to eliminate disproportional pay differentials among the currently prescribed six occupational levels.

This raises the question of how the construct “disproportional pay” or, more correctly, “pay differentials” should be interpreted and applied to ensure all disproportionality in pay differentials is eliminated.

The EEA and its accompanying regulations and forms fall short in providing a clear conceptualisation or operationalisation of the construct. In this contribution, we consider how the construct “disproportional pay differentials” should be conceptualised and operationalised to equip the National Minimum Wage Commission (“NMWC”), which monitors pay differentials, with appropriate and clear guidelines on what constitutes proportional pay differentials.

We use these definitions and operationalisations to propose regression analysis methods and hypothesis tests that may be applied to individual employee remuneration data sets to measure an organisation’s degree of compliance with the principle of proportional pay differentials. Additional measures are proposed to identify outlier employees that can be considered to be prima facie evidence of individual pay discrimination based on arbitrary grounds that are unconstitutional, unlawful and unfair. Ultimately, a framework is proposed that the NMWC can use and build on to develop standards of adherence to the principle of proportional pay differentials.

Source: Stellenbosch Law Review, Volume 36 Issue 3, 2025, p. 429-456: ISSN: 1996-2193
https://doi.org/10.47348/SLR/2025/i3a3

Authors: Albertus Liebenberg, Graham S Giles, Michelle Jäckel-Visser & Callie C Theron

Affiliations: 

    • MCom (Industrial Psychology), Remuneration Consultant 21st Century;
    • BA (Law) LLB, Practising Attorney & Notary, High Court of South Africa, Part-time Lecturer, Stellenbosch University;
    • PhD (Industrial Psychology), Senior Lecturer, Department of Industrial Psychology, Stellenbosch University; DPhil (Industrial Psychology),
    • Emeritus Professor, Department of Industrial Psychology, Stellenbosch University

Source: Stellenbosch Law Review, Volume 36 Issue 3, 2025, p. 429-456
https://doi.org/10.47348/SLR/2025/i3a3

This article, published in the Stellenbosch Law Review (Volume 36, Issue 3, 2025, pp. 429–456; ISSN 1996-2193), was authored by Albertus Liebenberg, Graham S Giles, Michelle Jäckel-Visser, and Callie C Theron.

The authors bring expertise from remuneration consulting, labour law, and industrial psychology, combining practical and academic perspectives.

Their multidisciplinary backgrounds support a comprehensive analysis of pay differentials and employment equity within the South African workplace context.

  • The Employment Equity Act requires designated employers to promote fair remuneration beyond equal pay for work of equal value.
  • Employers must also eliminate unjustifiable pay differentials across the six prescribed occupational levels.
  • A key challenge is that the concept of “disproportional pay differentials” is not clearly defined in the EEA or its regulations.
  • This lack of clarity makes it difficult for employers and regulators to identify and address unfair pay disparities.
  • The article explores how pay differentials should be properly conceptualised and measured.
  • It aims to provide practical guidance to the National Minimum Wage Commission in monitoring remuneration disparities.
  • Regression analysis and statistical hypothesis testing are proposed as tools to assess organisational compliance using employee remuneration data.
  • Additional methods are suggested to identify outlier employees whose remuneration may indicate prima facie unfair discrimination.
  • Such outliers may signal pay discrimination based on arbitrary, unlawful, or unconstitutional grounds.
  • The article ultimately proposes a framework to help the Commission develop clear standards for assessing proportional and fair pay differentials.