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Since the Employment Equity Act was amended three years ago to expand on the principle of “equal pay for equal work”, the application of the law has been regularly tested, mostly at the Commission for Conciliation, Mediation and Arbitration (CCMA).
When the Act was amended on 1 August 2014, three important additions were included in section 6, which deals with the prohibition of unfair discrimination.

First, the phrase “or any other arbitrary ground” was included in section 6(1) at the end of the list of grounds on which unfair discrimination is prohibited.

Next, section 6(4) was added. It 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 is unfair discrimination if the difference is directly or indirectly based on any one or more of the grounds listed in 6(1).

And section 6(5) was added, empowering the Minister of Labour to prescribe the criteria and methodology for assessing work of equal value. The Minister has done this in the form of the Employment Equity Regulations, 2014.

Over the past three years, the CCMA and Labour Court have considered these amendments and established a number of noteworthy principles.

One such principle centres on who has the jurisdiction to arbitrate equal pay cases - the CCMA or the Labour Court.

Earnings threshold is the deciding factor

In terms of section 10(6)(aA) of the Act, the CCMA only has jurisdiction to arbitrate equal pay cases where the complainant earns below the prescribed earnings threshold, currently R205,433.30 per annum. If the complainant earns above this amount, the matter must be heard by the Labour Court, unless all the parties to the dispute consent to the CCMA’s jurisdiction. This principle was confirmed in Health and Other Services Personnel Trade Union of South Africa obo Rayners v Uitenhage Hospital (Department of Health) [2016] 6 BALR 630 (CCMA).

Similarly, the CCMA has jurisdiction to arbitrate the dispute where there is one or more complainant (earning below the prescribed threshold). Therefore, although “employee” is referred to in the singular in section 10(6)(aA), this does not preclude the CCMA from determining disputes where there is more than one complainant. The Labour Court accordingly confirmed that the CCMA had jurisdiction in the dispute between Famous Brands Management Company (Pty) Ltd and SCMAWU, who acted on behalf of 633 individual employees.

A comparator must be identified

Another important principle is that the complainant must identify a comparator - a yardstick for comparison. In the context of equal pay, the comparator should be a person in the same organisation, doing the same or similar work, or work of equal value.

In the absence of a comparator, the case will fail, as happened in Mzobe & Others v Fencerite (Pty) Ltd (2016) 37 (CCMA) where the third applicant, Ms Mshololo, failed to identify a comparator.

Claims based on ‘arbitrary’ grounds

Where claims are lodged on the ground that pay differentiation is “arbitrary”, complainants are expected to be specific.

First, it must be the listed or arbitrary ground that causes the difference. Where the difference results from a different reason, the case will fail. For example, in Abanqobi Workers Union obo Mali v Trojan Security (Pty) Ltd [2016] 9 BALR 935 (CCMA), Mr Mali’s comparator, Mr Van der Merwe, was paid his increase one month early because he was experiencing financial difficulties and had asked the employer for assistance. Accelerating his increase by a month was accordingly a gesture of good will – not because he is white. Further, it is not sufficient for a complainant just to state that the differentiation is “irrational” or “arbitrary”. The complainant must identify the ground that is alleged to be arbitrary, and differentiation on this ground must affect the complainant in a comparably serious manner than would differentiation on one of the listed grounds.

For example, in NEHAWU obo Totyi v ACSA [2016] 9 BALRD 1017 (CCMA), the comparator was employed at a higher rate than Mr Totyi. Mr Totyi simply contended that this was arbitrary and therefore amounted to unfair pay discrimination. However, in evidence it appeared that the comparator had previously worked for ACSA in Cape Town and relocated to Port Elizabeth for family reasons. He successfully applied for a vacancy in Port Elizabeth and, in determining his rate of pay, ACSA took into account his previous experience and the fact that he did not require any additional training in order to perform his work. These reasons were not arbitrary or unfair and Mr Totyi’s claim accordingly failed.

Similarly, in Govender v Umgungundlovu District Municipality (2016) 37 (ILC)724 (CCMA), the complainant simply alleged that the difference in pay between her and a colleague on a similar level was “arbitrary”, but she did not identify the ground. Her claim accordingly failed. And in IMATU obo Nengovela & Another v Tshwane Metropolitan Municipality [2016] 4 BALR 336 (CCMA), the claim failed because Mr Nengovela failed to identify the ground that allegedly caused the difference in pay between him and a comparator who had 15 years’ experience in a different municipality.

Relevant experience and seniority

From Nengovela and Totyi, it is now established that relevant experience may justify differences in pay.

Similarly, seniority may justify differences in pay. This was the case in Pioneer Foods (Pty) Ltd v Workers Against Regression and Others (Case Number C687/15), where the employer paid new hires at 80% of the applicable rate for the first two years of employment in accordance with a collective agreement.

The Labour Court held, among other things, that treating people differently in the workplace in accordance with their length of service does not impair their human dignity or affect them adversely in a comparably serious manner. Even if it did amount to “discrimination”, this was not “unfair”, particularly considering the rationale for the collective agreement, which was to enable Pioneer Foods to directly employ the employees rather than engage them through labour brokers. Relying on seniority to justify differences in pay is also in accordance with Regulation 7.

Qualifications and pay differentiation

Superior qualifications may justify differences in pay. In NEHAWU obo Nquma v Department of Justice and Constitutional Development [2017] 1 BALR 76 (CCMA), the employer justified the difference in pay on the basis that the comparator was in possession of a Code 11 licence in addition to the Code 8 licence of the complainants. He could therefore perform additional tasks which the complainants could not perform and this justified the difference in pay. This principle is also acknowledged in Regulation 7(1)(b).

Doing the same or similar work

In order for a claim to succeed, the complainant and the comparator must perform the same or similar work, or work of equal value. In Mzobe & Others v Fencerite (Pty) Ltd (2016) 37 ILJ 1767 (CCMA), the complainants’ job, that of general labourer loading and off-loading trucks, was menial and unskilled, while the comparators’ jobs were skilled. The comparators did precision cutting and welding. The complainants’ tasks were repetitive, monotonous and largely stress-free. The comparators’ jobs, on the other hand, were complex and stressful – they required emotional and mental effort; they had to be meticulous and at times had to work at speed; and errors would directly affect the income stream of the business.  The jobs were accordingly not of equal value and the claim failed on this basis.

Employer errors

What if an employer makes a mistake in paying the comparators more than the complainants? Or what if no-one really knows why there are differences in pay between the employees concerned?

In SAMWU and Another v Nelson Mandela Bay Municipality (Case Number P483/11), the complainant was paid differently from her male colleagues, but the reason for the differentiation was unclear. What was clear was that the difference was not because of race or gender. Rather, it had transpired during the trial that the reason for the difference was “administrative chaos”. This was not pleaded as the alleged “arbitrary reason” for the differentiation – the complainant had simply alleged that the difference was “arbitrary”. In the circumstances, the case failed.

In Ndudula & Others v Metrorail PRASA (Western Cape) [2017] ZALCCT 12 (30 March 2017), the difference in pay between the complainants and the comparators occurred because of a mistake. This was subsequently corrected and the comparators’ pay was adjusted downwards. Again, the complainants simply alleged that the differentiation was “arbitrary” and they failed to identify the ground complained about. The court held that “arbitrary” in itself is not a ground – section 6(4) requires the ground alleged to be formulated and pleaded. The claim accordingly failed on this basis.

Categories of grounds: two not three

Ndudula & Others v Metrorail PRASA (Western Cape) [2017] ZALCCT 12 (30 March 2017) put to rest the (somewhat academic) debate about whether there are three grounds for alleged discrimination: the listed grounds, grounds that are analogous to the listed grounds, and arbitrary grounds, or whether there are just two categories, the listed grounds and arbitrary/analogous grounds.

With reference to the provisions of section 11, which sets out the burden of proof in discrimination cases, the court held that there are not three categories of grounds, but only two, the listed grounds and arbitrary/analogous grounds.

In the case of listed grounds, the burden is on the employer to prove that the differentiation is rational, is not unfair, or is otherwise justifiable. In the case of arbitrary/analogous grounds, the complainant must prove that the conduct is not rational, that it amounts to unfair discrimination (and thus adversely affects the complainant in a comparably serious manner than differentiation on a listed ground) and that it is unfair.

Talita Laubscher is a partner, employment and benefits at Bowmans.

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