South Africa already has world-class legal frameworks and requirements to ensure proportionate income differentials and ensure ‘equal pay for work of equal value’.   The only shortfall is the need to adopt 7 instead of  6 occupational levels in EE9.   There should then be 21 job levels (three per occupational level) with proportionate differentials or steps.

The mention in the article Gold companies, unions agree to scrap lowest-paid wage category by Allan Seccombe and Caron Paton that first appeared in Business Day today, about the gold companies scrapping the lowest-paid ‘category’ of wages, is cause for serious concern.

Think of a ladder with a fixed number of rungs.   It is not possible to remove the bottom rung but the first rung can be ‘over-stepped’ to speed up the ascent.   The first rung must remain in place as new recruits may need to start there.

Presumably what the gold companies mean is that instead of recruiting new employees to start at the first job cost level in the first occupational level, they will actually start at a higher job cost  level within that occupation level, or in other words increasing the entry job cost level for the same job outputs.   It would create a very dangerous precedent if employers ignore the need to classify work properly within the 7 distinct occupational levels.

Each occupational level has distinct and essential job outputs.   The first occupational level (with 3 job levels) caters for job outputs that are essentially ‘routine’ in nature and do not require those employees to perform any other more skilled functions.   Without breaching any laws it is still possible to justify a cost difference of up to 100% in the same occupational level.

Moving employees up the ‘ladder’ and into higher occupational levels requires those employees to have different skills and job outputs.   But there is no good reason why certain employees like ‘rock-drillers’ should not receive special allowances to cater for extreme working conditions.   Such allowances must not be built into the fixed job cost structure as it will result in disproportionate income differentials and in unfair discrimination and breach the ‘equal pay for work of equal value’ requirements.

For more information about these issues go the categories ‘Organisational structures’ and ‘Employee remuneration’.

Courtesy of Business Day here are some random extracts from the article but it should be read by clicking on the link.

GOLD companies, the National Union of Mineworkers (NUM) and other unions on Tuesday agreed to eradicate the lowest-paid category of wages in the industry.

The gold sector is extremely wary of opening wage negotiations with unions, which would render the strikes legal, but committed to the talks with unions in an attempt to resolve the strike that has crippled production at the country’s mines for weeks.

The illegal strikes by an estimated 80,000 mine workers have since August cost billions of rand in lost revenue and tax receipts, and contributed towards ratings downgrades and a weakening of the rand.

At the end of the talks on Tuesday, AngloGold Ashanti, Gold Fields and Harmony agreed that there were “anomalies” in mineworkers’ working arrangements that had to be addressed and committed to dealing with them.

The companies agreed to do away with the lowest-paid category of wages. Entry-level workers would now move up one category.

Rock-drill operators would be paid an undisclosed allowance and a new category of wages would be introduced for operators of locomotives, loaders, winches and water jets. There would also be “some adjustments in pay for other employees”, the parties agreed, which would “preserve the integrity of the job-grading framework”.

Wage deal

The current two-year wage deal reached between gold companies represented in the collective bargaining chamber, the NUM, Solidarity and Uasa expires in June next year.

Talks for a new two-year deal will only start next year.

Gold Fields, AngloGold and Harmony have been adamant they will not engage in wage talks outside of what is stipulated in the collective agreement, for fear of rendering future wage agreements worthless.

Gold miners and the NUM are revisiting specific clauses in the 2011 collective bargaining agreement that allow for the wages of the lowest earners in the gold mines to be addressed outside the prevailing agreement.

“We were all a bit slack in addressing those provisions. They’re fairly complicated,” an industry source said on Tuesday. “These strikes have certainly concentrated people’s minds around this matter.”

The big question hanging over the talks is whether the proposal for an increase will be well received by the striking gold miners, most of whom are demanding a basic salary of R12,500.