Picture this: One of your valued employees resigns at a time when it will be difficult and expensive to replace her. You offer her a raise to stay with the company, which she accepts. Crisis averted! Until her colleagues allege unfair discrimination…

The CCMA recently considered this situation in the matter of Independent Municipal & Allied Trade Union obo Mphela v. Aganang Local Municipality. The municipality had commenced a disestablishment process when certain traffic officers resigned to join another municipality. The municipality offered the traffic officers increases and car allowances, and they chose to remain. However, the other traffic officers (comparators) complained that they were unfairly discriminated against on an arbitrary ground.

Unfair discrimination

Section 6(4) of the Employment Equity Act provides that a difference in terms and conditions of employment between employees who perform the same or substantially the same work or work of equal value, which is based on a listed or arbitrary ground, is unfair discrimination.

Section 11(2) of the EEA provides that where unfair discrimination is alleged on an arbitrary ground (as in this case), the complainant is required to prove, on a balance of probabilities, that:

  • the conduct complained of is not rational;
  • the conduct complained of amounts to discrimination; and
  • the discrimination is unfair.

The Commissioner was satisfied that the traffic officers and comparators were doing the same job, and there was a differentiation. The key question was whether the differentiation was irrational and unfair.

The municipality denied that it had acted irrationally and unfairly for the following reasons:

  • The municipality complied with its retention policy by offering higher salaries to employees with so-called "valued skills", per the terms of the policy.
  • There were operational reasons underpinning the conduct, such as it would be difficult to recruit new traffic officers due to the disestablishment process; and failure to retain the traffic officers would negatively affect law enforcement, revenue within the municipality, and the community.

The CCMA Commissioner was of the opinion that the municipality may have painted itself into a corner - employees resigning under similar circumstances may expect the same counter-offers. However, the CCMA Commissioner found that there was no unfair discrimination because the municipality's conduct was not arbitrary but justified in that it was informed by operational reasons, such as the loss of the employees would have adversely affected the operation of the municipality.

CCMA awards are not binding. However, this award suggests that it is permissible to offer an employee a raise if he/she resigns as long as there are genuine operational reasons to justify differentiation. Employers would be wise to implement a retention policy that ensures any decision to offer a raise in these circumstances is taken rationally and fairly.