On 1 June 2015, the Minister of Labour issued a Code of Good Practice on Equal Pay for Work of Equal Value (Code) in terms of the amended Employment Equity Act (EEA).
The objective of the Code is to provide practical guidance to employers and employees on how to apply the principle of equal pay for work of equal value, in order to promote the implementation of pay equity in the workplace by all employers including the state and trade unions.
The Code applies to all employees and employers covered by the EEA and is to be read in conjunction with the Employment Equity Regulations released in 2014, as well as the Code of Good Practice on the Integration of Employment Equity into Human Resources, Practices and Procedures.
The Code is framed by s9 of the Constitution, the International Labour Organisation (ILO) Equal Remuneration Convention 1951 (No. 100) and s6(1) and s6(4) of the EEA, which prohibit unfair discrimination.
The Code seeks to implement equal pay through human resources policies, practices and job evaluation processes, as well as the management of these policies and processes within a framework of sound governance in order to ensure that the principle of equal pay is applied fairly, consistently and free from unfair discrimination.
It is important to note that the Code seeks to equalise all remuneration which includes payment in money or in kind, or both, made or owing to any person in return for working for another person. Employers should therefore examine all aspects of their remuneration policies to ensure compliance.
The Code imposes a positive duty on every employer to take steps to promote equal opportunity in the workplace by eliminating unfair discrimination in any employment policy or practice. Employers should also ensure that remuneration policies and practices are applied consistently without unfair discrimination on the basis of any one or combination of the listed grounds, or on any other arbitrary ground.
The Code provides three key issues which require scrutiny when examining whether the employer is complying with its obligation to apply equal pay in the workplace. The first is whether the jobs that are being compared are the same, substantially the same or of equal value in terms of an objective assessment. Secondly, whether there is a difference in the terms and conditions of employment of the employees whose jobs are the subject of comparison. Thirdly, if there is such a difference, whether such difference can be justified on fair and rational grounds in terms of Regulation 7 of the Employment Equity Regulations.
It is noteworthy that where there is a difference in the terms and conditions of comparable employees but such differentiation is not based on any of the listed grounds (eg gender, race, sex, age, disability, religion etc) in terms of s6(1) of the EEA, or any other arbitrary ground, then the differentiation will not amount to unfair discrimination.
The ILO Convention, which is echoed in the Code, focuses on gender based discrimination in terms of job evaluation. The Convention requires that measures should be taken in order to promote objective appraisal of jobs on the basis of the work to be performed. The Convention provides four criteria that should form part of every job evaluation in order to prevent discrimination. The first of these criteria is the responsibility demanded of the work, including responsibility for people, finances and material. The second criteria is the skills, qualifications (including prior learning) and experience required to perform the work, whether formal or informal. The third criteria is the physical, mental and emotional effort required to perform the work; and the fourth criteria is the assessment of working conditions, which may include an assessment of the physical environment, psychological conditions, time pressures and geographic location of the work performed.
Discrimination based on gender is a worldwide phenomenon, which the ILO suggests is due to gender stereotypes and the tradition of creating job evaluations on the basis of male-dominated jobs.
Employers are therefore cautioned when selecting a job evaluation method to ensure that it is equally tailored for all employees as the use of the above job evaluation tool does not in itself mean that there will be no unfair discrimination.
Where employers find that there is differentiation between employees and that such differentiation cannot be justified in terms of the reasons provided in Regulation 7, the employer should determine how to address the inequalities without reducing the remuneration of the other employees to bring about equal pay; and review and monitor the above process annually.
With the announcement of this Code, South African's stance on equal pay is now firmly in line with global best practice on equal pay for equal work.