IMPORTANT ISSUES AND QUESTIONS?
The South African Employment Equity Amendment Act, 47 of 2013 [EEA] and the Employment Equity Regulations, 2014 [EER] came into effect on 01 August 2014, ‘with barely a ripple in the human resources community…surprising, since this was the date on which still harsher human resources legislation came into effect in the form of amendments to the Employment Equity Act. [Tony Pace, ‘Amendments to the Act make Job Grading Vital – Remuneration Nightmare Begins’ (2014) Workinfo.com, Newsletter August 2014].
Reference in the title of the article supra namely, ‘Remuneration Nightmare Begins’ and ‘Job Grading Vital’ may be regarded as a stratagem designed to ‘scare’ the person who may come across the article out of a state, what is commonly known as ‘REM – sleep to that of a ‘rude awakening’ or a state of acute awareness of the enactment of the extensive amendments to South African Employment Equity Legislation and the important issues and questions that may arise from the ‘new laws’.
After all, prior to the enactment of the amended legislation many articles on the subject matter have been published by well known and respected authorities as well as labor law practitioners of leading attorney firms. Furthermore, the Department of Labor held numerous ‘Road Shows’ some in all the major cities within the provinces of SA where the amendments to the legislation and the possible effects thereof were explained to all who took the time to attend. For example, at a ‘Road Show’ held at the Sandton Convention Centre in Johannesburg, Gauteng Province on 13 August 2014, the Department of Labour Director for Employment Equity (EE) Director Ntsoaki Mamashela has confirmed that the principle of ‘equal pay for work of equal value’ applies 'irrespective of the status of employment'.
The Director referred to employees 'hired on a contract basis', whose 'rights' under the new regulations are evidently the same as those of 'full-time' employees. Specific reference was made to EER - Regulation 3 (Eliminating unfair discrimination) that requires that an employer [must] to take steps ‘to eliminate differences in the terms and conditions of employment of employees performing work of equal value if those differences are directly or indirectly based on a listed ground or any arbitrary ground ... prohibited by section 6(1) of the Act'.
In a paper presented by Talita Laubscher et al, ‘Equal pay for equal work’ (2014) Bowman Gilfillan Attorneys the learned author advised employers ‘to carefully scrutinize their pay practices in order to ensure that any disparity [remuneration – including employment benefits, terms and conditions of employment] is objectively justifiable and does not give rise to an attack based on any of the listed grounds, or other arbitrary grounds’.
A possible reason for the perceived inactivity on the part of employers, as referred to in the article by Tony Pace supra, may be that employers and to a lesser extent employees [trade unions] are in the process of analysing the amendments with the purpose of eliminating unfair discrimination by taking corrective measures in order to eliminate differences in terms and conditions of employment, benefits and remuneration. [See: Section 5 of EEA & Regulation 3 EER].
One hopes that employers are not adopting a ‘wait and see’ approach as to compliance with the legislation, for example to await a ‘test case’ or legal precedent to be set by the Courts or even the CCMA.
Equal Pay for Work of Equal Value: How do We Get There?
[See: ILO – UN Global Compact Webinar ‘Equal Pay of Equal Value: How do We Get There?’ March 2011].
Having perused the introductory part to this article various questions and problems come to mind such as:
- What is an ‘arbitrary ground’? [See: excerpt article by Talita Laubscher – Section 6(1) EEA & Regulation 3 EER];
- The definition and meaning of ‘equal pay for work of equal value’? [See: Section 6(4) EEA & Regulation 4 EER];
- The methodology for determining ‘equal value claims’? [See: Section (6)(4) EEA & Regulation 4 to 6 EER];
- The assessment whether work is of ‘equal value’? [See: Regulation 4, 6 EER & excerpt article by Tony Pace];
- ‘Equal pay claims’ v. ‘equal benefits, terms and conditions of employment’? [See: Section 6(4) EEA & Regulation 6 & 7 EER];and
- Grounds or ‘Factors justifying differentiation in terms and conditions of employment’? [See: Section 11 EEA & Regulation 7 EER].
Due to the extent of, and legal technicalities/questions arising from the amendments to the former EEA, 55 of 1998, now the EEA, 47 of 2013 as well as the Regulations, EER, 2014 it was deemed appropriate to submit brief comments, as to the questions and problems, to (vi) supra. Some of the issues listed above have been analyzed and addressed by Professor PAK le Roux in a recent article published in the authoritive publication Contemporary Labor Law. [See: PAK le Roux, ‘The Employment Equity Act: New amendments set problems and posers’ (2014) Contemporary Labor Law Vol. 24 No. 1].
Section 6 (1) of the EEA includes “Prohibition of Unfair Discrimination, direct and indirect…race, gender… [Listed grounds] ‘or any other arbitrary ground’. The ‘Listed grounds’ contained in Section 6(1) are not a closed list by virtue of the wording ‘on one or more grounds, including…’. Therefore, in addition to the listed grounds as ‘codified’ in Section 6(1) ‘other [analogous] grounds’ as well as ‘any arbitrary ground’ may constitute unfair discrimination.
According to Le Roux supra, the EEA contains three sets of grounds whereupon a claim of unfair discrimination may be brought, to wit listed grounds; (ii) unlisted analogous grounds; (iii) arbitrary grounds. Therefore, the traditional grounds for potential litigation are extended and include inequality in benefits, terms and conditions of employment and remuneration, as is addressed more fully hereunder.
As to the burden of proof another interesting distinction is to be found in the EEA in that if unfair discrimination is alleged on a ground listed in section 6(1) supra the employer against whom a claim is brought must prove, on a balance of probabilities, that:
discrimination did not take place; or
(ii) discrimination is rational, not unfair or is justifiable.
If discrimination is alleged on an arbitrary ground the claimant [employee(s)] must proof, on a balance of probabilities, that:
conduct complained of is not rational;
(ii) conduct amounts to discrimination; and
(iii) discrimination is unfair.
‘EQUAL PAY FOR WORK OF EQUAL VALUE’?
Regulation 1 of the EER defines - "work of equal value" includes works that is the same, substantially the same or of the same value as other work, as contemplated in regulation 4 of these Regulations.
Regulation 4 – “Meaning of work of equal value”:
Regulation 4(1) – Performing the same work, that is identical or interchangeable;
Regulation 4(3) - Job title not determinative, an objective assessment of the actual duties performed required.
Therefore, it could be deduced:
- The test is not whether the same or similar work is performed; rather it involves an objective analysis or assessment of equal value. The work performed may in nature be entirely different, however intrinsically of equal value;
- Job evaluation systems or methods would be scrutinized as to objectivityin that the criteria for evaluation would in all probability be subject to challenge as discriminatory or subjective in substance and nature.
According to Le Roux supra, it is of importance to keep in mind that in general reference is made to ‘equal pay’ claims, however, discrimination claims are not limited to salaries or wages and will cover all benefits, terms and conditions of employment, for example leave and pension/provident fund arrangements. These claims also include a cause of action where ‘indirect discrimination’ is alleged.
DETERMINING EQUAL VALUE CLAIMS?
This question has to a large extent been addressed above. This notwithstanding, Regulations 4 to 6 of EER provide guidance as to how two different jobs should be accorded the same value. Regulation 6 sets out, in peremptory terms the criteria for value assessment:
Regulation 6(1)(a) – Responsibility for, people, finances and materials;
Regulation 6(1)(b) - Skills, qualifications and prior learning required to perform the work;
Regulation 6(1)(c) – Effort, physical, mental and emotional effort required to perform the work;
Regulation 6(1)(d) - Work context, i.e. conditions under which the work is performed, physical environment, psychological conditions, time when and geographic location where work is performed.
According to Le Roux supra the stipulations contained in Regulation (6)(3) are of specific importance in that the assessment process of the value of work must be conducted in a manner devoid from bias on the grounds of race, gender or disability or any other listed or arbitrary ground.
Regulation 6(4) makes allowance for justification of value assigned on the ground of the provisions contained in a sectoral determination pertaining to classification of a specific job.
At first glance Regulation 6(3) opens the way for judicial innovation in that the employer’s pay structures, job evaluation or job grading schemes, performance appraisals and collective agreements may be challenged as subjective, scientifically unreliable or invalid, and biased against an employee or group albeit on the grounds of [unfair] direct or indirect discrimination.
FACTORS JUSTIFYING DISCRIMINATION IN TERMS AND CONDITIONS OF EMPLOYMENT
Regulation 7(1) contains a list of factors that justify differentiation in terms and conditions of employment, including remuneration notwithstanding that the work performed is of equal value, with the proviso that the differentiation does not constitute unfair discrimination and that the difference is rational and based on any of the grounds such as seniority, length of service, qualifications and performance.
In the first instance the above factors may give rise to an inconsistency or objectivity challenge.
In the second instance some of the factors prima facie justify discrimination, however upon closer scrutiny may constitute indirect discrimination, for example seniority and length of service.
The employee may contend that seniority as a factor in justification of discrimination is inherently unfair in that the employee, due to an earlier discriminatory practice, has been excluded from certain positions and therefore not had the same opportunity to accrue seniority or experience.
In conclusion the observation by Le Roux supra is apposite in that preparation for any litigation, including CCMA arbitration would have to be thorough and detailed.
It is envisaged that the testimony of expert witnesses may on occasion be necessary in order to be successful in litigation.