Pay discrimination examined: Excerpts ILO Constitution EEA

What do managers have to do to comply with their legal obligations to eliminate pay discrimination as examined herein?

This contribution draws attention to the relevant statutory framework that will assist readers in knowing and understanding the actual legislative provisions relating to pay discrimination and claims based on alleged unequal pay for work of equal value.

Quoted below are the relevant provisions of:

• ILO Convention 111;
• Constitution of the Republic of SA;
• Employment Equity Act;
• Regulations issued in 2014; and
• Code of Good Practice issued in 2015.

South Africa has ratified the ILO Convention 111 so it is also very important.  South Africa ratified ILO Convention 111 on 5 March 1997 and it remains in force.  The complete Convention is quoted below.

These are some earlier posts referring to the Convention:

• Discrimination is prohibited: Finish and klaar
• ILO Conventions: and some Recommendations
• SA’s ratification of ILO conventions
• Interpreting “any other arbitrary grounds” in EEA
• Newly appointed employees: Differentiation not discrimination
• Differentiation: When does it become discrimination

Full text of ILO Convention 111

C111 – Discrimination (Employment and Occupation) Convention, 1958 (No.  111)

Convention concerning Discrimination in Respect of Employment and Occupation (Entry into force: 15 Jun 1960)

Adoption: Geneva, 42nd ILC session (25 Jun 1958) – Status: Up-to-date instrument (Fundamental Convention).

Preamble

The General Conference of the International Labour Organisation,

Having been convened at Geneva by the Governing Body of the International Labour Office, and having met in its Forty-second Session on 4 June 1958, and

Having decided upon the adoption of certain proposals with regard to discrimination in the field of employment and occupation, which is the fourth item on the agenda of the session, and

Having determined that these proposals shall take the form of an international Convention, and

Considering that the Declaration of Philadelphia affirms that all human beings, irrespective of race, creed or sex, have the right to pursue both their material well-being and their spiritual development in conditions of freedom and dignity, of economic security and equal opportunity, and

Considering further that discrimination constitutes a violation of rights enunciated by the Universal Declaration of Human Rights,

adopts this twenty-fifth day of June of the year one thousand nine hundred and fifty-eight the following Convention, which may be cited as the Discrimination (Employment and Occupation) Convention, 1958:

Article 1

1. For the purpose of this Convention the term discrimination includes–

(a) any distinction, exclusion or preference made on the basis of race, colour, sex, religion, political opinion, national extraction or social origin, which has the effect of nullifying or impairing equality of opportunity or treatment in employment or occupation;

(b) such other distinction, exclusion or preference which has the effect of nullifying or impairing equality of opportunity or treatment in employment or occupation as may be determined by the Member concerned after consultation with representative employers’ and workers’ organisations, where such exist, and with other appropriate bodies.

2. Any distinction, exclusion or preference in respect of a particular job based on the inherent requirements thereof shall not be deemed to be discrimination.
3. For the purpose of this Convention the terms employment and occupation include access to vocational training, access to employment and to particular occupations, and terms and conditions of employment.

Article 2

Each Member for which this Convention is in force undertakes to declare and pursue a national policy designed to promote, by methods appropriate to national conditions and practice, equality of opportunity and treatment in respect of employment and occupation, with a view to eliminating any discrimination in respect thereof.

Article 3

Each Member for which this Convention is in force undertakes, by methods appropriate to national conditions and practice–

(a) to seek the co-operation of employers’ and workers’ organisations and other appropriate bodies in promoting the acceptance and observance of this policy;

(b) to enact such legislation and to promote such educational programmes as may be calculated to secure the acceptance and observance of the policy;

(c) to repeal any statutory provisions and modify any administrative instructions or practices which are inconsistent with the policy;

(d) to pursue the policy in respect of employment under the direct control of a national authority;

(e) to ensure observance of the policy in the activities of vocational guidance, vocational training and placement services under the direction of a national authority;

(f) to indicate in its annual reports on the application of the Convention the action taken in pursuance of the policy and the results secured by such action.

Article 4

Any measures affecting an individual who is justifiably suspected of, or engaged in, activities prejudicial to the security of the State shall not be deemed to be discrimination, provided that the individual concerned shall have the right to appeal to a competent body established in accordance with national practice.

Article 5

1. Special measures of protection or assistance provided for in other Conventions or Recommendations adopted by the International Labour Conference shall not be deemed to be discrimination.
2. Any Member may, after consultation with representative employers’ and workers’ organisations, where such exist, determine that other special measures designed to meet the particular requirements of persons who, for reasons such as sex, age, disablement, family responsibilities or social or cultural status, are generally recognised to require special protection or assistance, shall not be deemed to be discrimination.

Article 6

Each Member which ratifies this Convention undertakes to apply it to non-metropolitan territories in accordance with the provisions of the Constitution of the International Labour Organisation.

Article 7

The formal ratifications of this Convention shall be communicated to the Director-General of the International Labour Office for registration.

Article 8

1. This Convention shall be binding only upon those Members of the International Labour Organisation whose ratifications have been registered with the Director-General.
2. It shall come into force twelve months after the date on which the ratifications of two Members have been registered with the Director-General.
3. Thereafter, this Convention shall come into force for any Member twelve months after the date on which its ratification has been registered.

Article 9

1. A Member which has ratified this Convention may denounce it after the expiration of ten years from the date on which the Convention first comes into force, by an act communicated to the Director-General of the International Labour Office for registration. Such denunciation shall not take effect until one year after the date on which it is registered.
2. Each Member which has ratified this Convention and which does not, within the year following the expiration of the period of ten years mentioned in the preceding paragraph, exercise the right of denunciation provided for in this Article, will be bound for another period of ten years and, thereafter, may denounce this Convention at the expiration of each period of ten years under the terms provided for in this Article.

Article 10

1. The Director-General of the International Labour Office shall notify all Members of the International Labour Organisation of the registration of all ratifications and denunciations communicated to him by the Members of the Organisation.
2. When notifying the Members of the Organisation of the registration of the second ratification communicated to him, the Director-General shall draw the attention of the Members of the Organisation to the date upon which the Convention will come into force.

Article 11

The Director-General of the International Labour Office shall communicate to the Secretary-General of the United Nations for registration in accordance with Article 102 of the Charter of the United Nations full particulars of all ratifications and acts of denunciation registered by him in accordance with the provisions of the preceding Articles.

Article 12

At such times as it may consider necessary the Governing Body of the International Labour Office shall present to the General Conference a report on the working of this Convention and shall examine the desirability of placing on the agenda of the Conference the question of its revision in whole or in part.

Article 13

1. Should the Conference adopt a new Convention revising this Convention in whole or in part, then, unless the new Convention otherwise provides:

(a) the ratification by a Member of the new revising Convention shall ipso jure involve the immediate denunciation of this Convention, notwithstanding the provisions of Article 9 above, if and when the new revising Convention shall have come into force;

(b) as from the date when the new revising Convention comes into force, this Convention shall cease to be open to ratification by the Members.

2. This Convention shall in any case remain in force in its actual form and content for those Members which have ratified it but have not ratified the revising Convention.

Article 14

The English and French versions of the text of this Convention are equally authoritative.

CONSTITUTION OF THE REPUBLIC OF SOUTH AFRICA, 1996

CHAPTER 2   BILL OF RIGHTS

7. Rights.

(1)  This Bill of Rights is a cornerstone of democracy in South Africa.  It enshrines the rights of all people in our country and affirms the democratic values of human dignity, equality and freedom.

(2)  The state must respect, protect, promote and fulfil the rights in the Bill of Rights.

(3)  The rights in the Bill of Rights are subject to the limitations contained or referred to in section 36, or elsewhere in the Bill.

8. Application.

(1)  The Bill of Rights applies to all law, and binds the legislature, the executive, the judiciary and all organs of state.

(2)  A provision of the Bill of Rights binds a natural or a juristic person if, and to the extent that, it is applicable, taking into account the nature of the right and the nature of any duty imposed by the right.

(3)  When applying a provision of the Bill of Rights to a natural or juristic person in terms of subsection (2), a court—

(a)  in order to give effect to a right in the Bill, must apply, or if necessary develop, the common law to the extent that legislation does not give effect to that right; and

(b)  may develop rules of the common law to limit the right, provided that the limitation is in accordance with section 36(1).

(4)  A juristic person is entitled to the rights in the Bill of Rights to the extent required by the nature of the rights and the nature of that juristic person.

9. Equality.

(1)  Everyone is equal before the law and has the right to equal protection and benefit of the law.

(2)  Equality includes the full and equal enjoyment of all rights and freedoms.  To promote the achievement of equality, legislative and other measures designed to protect or advance persons, or categories of persons, disadvantaged by unfair discrimination may be taken.

(3)  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.

(4)  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.

(5)  Discrimination on one or more of the grounds listed in subsection (3) is unfair unless it is established that the discrimination is fair.

10. Human dignity.

Everyone has inherent dignity and the right to have their dignity respected and protected.

. . . . .

EMPLOYMENT EQUITY ACT NO 55 OF 1998

5. Elimination of unfair discrimination.

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

6. Prohibition of unfair discrimination.

(1)  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.

(2)   It is not unfair discrimination to—

(a)   take affirmative action measures consistent with the purpose of this Act; or

(b)   distinguish, exclude or prefer any person on the basis of an inherent requirement of a job.

(3)  Harassment of an employee is a form of unfair discrimination and is prohibited on any one, or a combination of grounds of unfair discrimination listed in subsection (1).

(4)  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), is unfair discrimination.

(5)  The Minister, after consultation with the Commission, may prescribe the criteria and prescribe the methodology for assessing work of equal value contemplated in subsection (4).

. . . .

10. Disputes concerning this Chapter.

(1)  In this section, the word “dispute” excludes a dispute about an unfair dismissal, which must be referred to the appropriate body for conciliation and arbitration or adjudication in terms of Chapter VIII of the Labour Relations Act.

(2)  Any party to a dispute concerning this Chapter may refer the dispute in writing to the CCMA within six months after the act or omission that allegedly constitutes unfair discrimination.

(3)  The CCMA may at any time permit a party that shows good cause to refer a dispute after the relevant time limit set out in subsection (2).

(4)  The party that refers a dispute must satisfy the CCMA that—

(a)  a copy of the referral has been served on every other party to the dispute; and

(b)  the referring party has made a reasonable attempt to resolve the dispute.

(5)  The CCMA must attempt to resolve the dispute through conciliation.

(6)  If the dispute remains unresolved after conciliation—

(a)  any party to the dispute may refer it to the Labour Court for adjudication;

(aA)  an employee may refer the dispute to the CCMA for arbitration if—

(i)  the employee alleges unfair discrimination on the grounds of sexual harassment; or

(ii)  in any other case, that employee earns less than the amount stated in the determination made by the Minister in terms of section 6(3) of the Basic Conditions of Employment Act; or

(b)  any party to the dispute may refer it to the CCMA for arbitration if all the parties to the dispute consent to arbitration of the dispute.

(7)  The relevant provisions of Parts C and D of Chapter VII of the Labour Relations Act, with the changes required by context, apply in respect of a dispute in terms of this Chapter.

(8)  A person affected by an award made by a commissioner of the CCMA pursuant to a dispute contemplated in subsection (6)(aA) may appeal to the Labour Court against that award within 14 days of the date of the award, but the Labour Court, on good cause shown, may extend the period within which that person may appeal.

11. Burden of proof.

(1)  If unfair discrimination is alleged on a ground listed in section 6(1), the employer against whom the allegation is made must prove, on a balance of probabilities, that such discrimination—

(a)   did not take place as alleged; or

(b)   is rational and not unfair, or is otherwise justifiable.

(2)  If unfair discrimination is alleged on an arbitrary ground, the complainant must prove, on a balance of probabilities, that—

(a)   the conduct complained of is not rational;

(b)   the conduct complained of amounts to discrimination; and

(c)   the discrimination is unfair.

. . . .

19. Analysis.

(1) A designated employer must collect information and conduct an analysis, as prescribed, of its employment policies, practices, procedures and the working environment, in order to identify employment barriers which adversely affect people from designated groups.

(2) An analysis conducted in terms of subsection (1) must include a profile, as prescribed, of the designated employer’s workforce within each occupational level in order to determine the degree of under representation of people from designated groups in various occupational levels in that employer’s workforce.

20. Employment equity plan.

(1) A designated employer must prepare and implement an employment equity plan which will achieve reasonable progress towards employment equity in that employer’s workforce.

. . . . .

21. Report

(1) A designated employer must submit a report to the Director-General once every year, on the first working day of October or on such other date as may be prescribed.

(2) . . . . . .

(3) Despite subsection (1), an employer that becomes a designated employer on or after the first working day of April but before the first working day of October, must only submit its first report on the first working day of October in the following year or on such other date contemplated in subsection (1).

(4) The report referred to in subsection (1) must contain the prescribed information and must be signed by the chief executive officer of the designated employer.

(4A) An employer that is not able to submit a report to the Director-General by the first working day of October in terms of subsection (1) must notify the Director-General in writing before the last working day of August in the same year giving reasons for its inability to do so.

(4B) The Director-General may apply to the Labour Court to impose a fine in accordance with Schedule 1, if an employer—

(a)   fails to submit a report in terms of this section;
(b)   fails to notify and give reasons to the Director-General in terms of subsection (4A); or
(c)   has notified the Director-General in terms of subsection (4A) but the reasons are false or invalid.

(5) . . . . . .

(6) Every report prepared in terms of this section is a public document.

. . . . .

27. Income differentials and discrimination.

(1) Every designated employer, when reporting in terms of section 21(1), must submit a statement, as prescribed, to the Employment Conditions Commission established by section 59 of the Basic Conditions of Employment Act, on the remuneration and benefits received in each occupational level of that employer’s workforce.

(2) Where disproportionate income differentials, or unfair discrimination by virtue of a difference in terms and conditions of employment contemplated in section 6(4), are reflected in the statement contemplated in subsection (1), a designated employer must take measures to progressively reduce such differentials subject to such guidance as may be given by the Minister as contemplated in subsection (4).

(3) The measures referred to in subsection (2) may include—

(a)   collective bargaining;
(b)   compliance with sectoral determinations made by the Minister in terms of section 51 of the Basic Conditions of Employment Act;
(c)   applying the norms and benchmarks set by the Employment Conditions Commission;
(d)   relevant measures contained in skills development legislation;

(4) The Employment Conditions Commission must research and investigate norms and benchmarks for proportionate income differentials and advise the Minister on appropriate measures for reducing disproportional differentials.

(5) The Employment Conditions Commission may not disclose any information pertaining to individual employees or employers.

(6) Parties to a collective bargaining process may request the information contained in the statement contemplated in subsection (1) for the collective bargaining purposes subject to section 16(4) and (5) of the Labour Relations Act.

. . . . .

REGULATIONS

GNR.595 of 1 August 2014:  Employment Equity Regulations, 2014 (Government Gazette No.  37873)

2. Equal Pay for Work of Equal Value Criteria.

These Regulations are published to prescribe the criteria and methodology for assessing work of equal value contemplated in section 6(4) of the Act.

3. Eliminating unfair discrimination.

(1)  An employer must, in order to eliminate unfair discrimination, take steps to eliminate differences in terms and conditions of employment, including remuneration of employees who perform work of equal value if those differences are directly or indirectly based on a listed ground or any arbitrary ground that is prohibited by section 6(1) of the Act.

(2)  Without limiting sub-regulation (1), an employer must ensure that employees are not paid different remuneration for work of equal value based on race, gender or disability.

4. Meaning of work of equal value.

For the purpose of these Regulations, the work performed by an employee—

(1)  is the same as the work of another employee of the same employer, if their work is identical or interchangeable;

(2)  is substantially the same as the work of another employee employed by that employer, if the work performed by the employees is sufficiently similar that they can reasonably be considered to be performing the same job, even if their work is not identical or interchangeable;

(3)  is of the same value as the work of another employee of the same employer in a different job, if their respective occupations are accorded the same value in accordance with regulations 5 to 7.

5. Methodology.

When, applying section 6(4) of the Act—

(1)  it must first be established—

(a)  whether the work concerned is of equal value in accordance with regulation 6; and

(b)  whether there is a difference in terms and conditions of employment, including remuneration.

(2)  it must then be established whether any difference in terms of sub-regulation (1)(b) constitutes unfair discrimination, applying the provisions of section 11 of the Act.

6. Assessing whether work is of equal value.

(1)  In considering whether work is of equal value, the relevant jobs must be objectively assessed taking into account the following criteria—

(a)  the responsibility demanded of the work, including responsibility for people, finances and material;

(b)  the skills, qualifications, including prior learning and experience required to perform the work, whether formal or informal;

(c)  physical, mental and emotional effort required to perform the work; and

(d)  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.

(2)  In addition to the criteria specified in sub-regulation (1) any other factor indicating the value of the work may be taken into account in evaluating work, provided the employer shows that the factor is relevant to assessing the value of the work.

(3)  The assessment undertaken in terms of sub-regulations (1) and (2) must be conducted in a manner that is free from bias on grounds of race, gender or disability, any other listed ground or any arbitrary ground that is prohibited in terms of section 6 (1) of the Act.

(4)  Despite sub-regulations (1) and (2), an employer may justify the value assigned to an employee’s work by reference to the classification of a relevant job in terms of a sectoral determination made by the Minister of Labour in terms of section 55 of the Basic Conditions of Employment Act, 1997 (Act No.  75 of 1997) which applies to the employer.

7. Factors justifying differentiation in terms and conditions of employment.

(1)  If employees perform work that is of equal value, a difference in terms and conditions of employment, including remuneration, is not unfair discrimination if the difference is fair and rational and is based on any one or a combination of the following grounds—

(a)  the individuals’ respective seniority or length of service;

(b)  the individuals’ respective qualifications, ability, competence or potential above the minimum acceptable levels required for the performance of the job;

(c)  the individuals’ respective 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;

(d)  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;

(e)  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;

( f )  the existence of a shortage of relevant skill, or the market value in a particular job classification; and

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

(2)  A differentiation in terms and conditions of employment based on one or more grounds listed in sub-regulation (1) will be fair and rational if it is established, in accordance with section 11 of the Act, that—

(a)  its application is not biased against an employee or group of employees based on race, gender or disability or any other ground listed in section 6 (1) of the Act; and

(b)  it is applied in a proportionate manner.

Duties of a designated employer

8. Collecting information and conducting an analysis.

(1) When a designated employer collects information contemplated in section 19 of the Act, the employer must request each employee in the workforce to complete a declaration using the EEA1 form.

(2) An employee may add information to the EEA1 form.

(3) Where an employee refuses to complete the EEA1 form or provides inaccurate information, the employer may establish the designation of an employee by using reliable historical and existing data. People with disabilities have the right not to declare their disability, unless it is in line with the inherent requirements of the job.

(4) A designated employer must conduct an analysis as required by section 19 of the Act by reviewing its workforce profile and employment policies, practices, procedures and the working environment in order to identify employment barriers which adversely affect people from designated groups from being equitably represented across all occupational levels. The outcome of the analysis should be reported using the EEA12 in these Regulations.

(5) A designated employer must refer to the relevant Codes of Good Practice issued in terms of section 54 of the Act as a guide when collecting information and conducting the analysis required by section 19 of the Act.

(6) When a designated employer conducts the analysis as required by section 19 of the Act, the employer may refer to—

(a)   EEA8, a guide on the applicable national and regional economically active population (EAP); and
(b)   EEA9, which contains a description of occupational levels.

9. Duty to prepare and implement an Employment Equity Plan.

(1) A designated employer must refer to the relevant Codes of Good Practice issued in terms of section 54 of the Act when preparing an Employment Equity Plan contemplated in section 20 of the Act.

(2) The Employment Equity Plan must contain, at a minimum, all the elements contained in the EEA13 template of these Regulations.

(3) A designated employer must retain their Employment Equity Plan for a period of five years after the expiry of the plan.

(4) A designated employer must refer to the EEA9 in the regulations for guidance on how to differentiate between the various occupational levels.

10. Duty to report.

(1) A designated employer must submit a report to the Director-General in terms of section 21 of the Act annually on the first working day of October or by 15 January of the following year only in the case of electronic reporting using the EEA2 form.

(2) Employment equity reports must be addressed to the Employment Equity Registry, Department of Labour, Private Bag X117, Pretoria, 0001 or submitted electronically using the online reporting system available on the departmental website, www.labour.gov.za.

(3) An employer who becomes designated on or after the first working day of April, but before the first working day of October, must only submit its first report on the first working day of October of the following year.

(4) A designated employer that is a holding company with more than one registered entity may choose to submit a consolidated report.

(5) A designated employer who chooses to submit a consolidated report contemplated in sub-regulation 10 (4) must have a consolidated Employment Equity Plan which is supported by individual Employment Equity Plans for each of the registered entities included in the consolidated report.

(6) The method of reporting contemplated in sub-regulation 10(4) should remain consistent for the duration of the plan.

(7) An employer must inform the Department in writing immediately of any changes to their trade name, designation status, contact details or any other major changes, including mergers, acquisitions and insolvencies.

(8) A designated employer who is unable to report must notify the Director-General in writing before the last working day of August in the same year giving reasons for its inability to do so using the EEA14 form.

(9) A designated employer must retain a copy of the report for a period of five years after it has been submitted to the Director-General.

(10) In terms of section 22, every designated employer must publish a summary of a report required by section 21 reflecting progress in their annual financial report by using the EEA10 annexure for guidance.

(11) An employment equity report (EEA2), except for the Income Differential Statement reflected in the EEA4 form, submitted to the Department of Labour is a public document and a copy may be requested by the public by completing and submitting the EEA11 form to the Department of Labour, Employment Equity Registry.

11. Duty to inform.

The notice contemplated in section 25(1) of the Act is contained as the Summary of the Act in annexure EEA3 of these Regulations and must be displayed at the workplace.

12. Income differentials and discrimination.

(1) A designated employer must submit an Income Differential Statement in terms of section 27 of the Act using the EEA4 form to the Employment Conditions Commission, which must be addressed to the Employment Equity Registry, Department of Labour, Private Bag X117, Pretoria, 0001, unless the employer is completing the prescribed forms on the Department of Labour’s EE Online Reporting System.

(2) An employer who becomes designated on or after the first working day of April, but before the first working day of October, must only submit their Income Differential Statement on the first working day of October of the following year.

(3) A designated employer must retain a copy of the statement of income differentials contemplated in sub-regulation 12(1) for a period of five years after it has been submitted.

. . . . .

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

GN 448 of 1 June 2015:  (Government Gazette No.  38837)

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 [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] 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 [Any reference to regulations in this Code refers to the Employment Equity Regulations, 2014]; and

2.1.2.  the Code of Good Practice on the Integration of Employment Equity into Human Resources Policies, Practices and Procedures (HR 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 Act, 1997 (Act No.  75 of 1997), as amended [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] 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 any one 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 any one 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 and Practices (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 objective 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 [See, for instance, Promoting Equity Gender -Neutral Job Evaluation: A Step -by -Step Guide (ILO, Geneva, 2008) and Equal Pay: An introductory guide (ILO, Geneva, 2013)].

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 [Equal Pay: An introductory guide (ILO, Geneva, 2013), Part 5].

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 any one 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 subject 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.