Understanding and applying the principle of equal pay for work of equal value
Equal pay of equal work or value (The EEA):
Section 6 of the Employment Equity Act 55 of 1998 is amended1 to include a new sub section 4 which brings in the principle of equal pay for work of equal value”. According to the amendment, direct or indirect unfair discrimination will also include a differentiation in terms and conditions of employment of employees doing the same or similar work (substantially) or work of equal value. The employer will have to show that the differentiation in conditions of work is for a fair reasons such as seniority, years of service, experience, skill or responsibility. Should the reason for differentiation relate to any discriminatory ground, it will be unfair discrimination.
The 2014 Regulations2 defines Equal pay for work of equal value and prescribes the criteria and methodology for assessing work of equal value as contemplated in section 6(4).
Employer’s bears the duty to eliminate unfair discrimination (historically caused by undervaluing of work performed by females, Blacks and disabled employees) and take steps to eliminate differences in terms of employment and remuneration where work of equal value is performed and such differences are directly or indirectly caused by a discriminatory ground such as race, gender or disability (or any other ground as listed in section 6). It should be noted that not all differences will be unfair. Employers are not required to pay all employees the same amount of remuneration.
On 29 September 2014 the DOL published a draft code of good practice3 on equal pay for work of equal value. The objective of the code is to provide practical guidance to employers and employees on how to apply the principle of equal remuneration for work of equal value in the workplace. Employers must implement fair remuneration practices through its codes, policies, procedures, practices and job evaluation processes.
First step: Key issues to scrutinise:
When determining whether equity in payment of remuneration is being complied with, three key issues must be scrutinised:
- Are the jobs that are being compared the same, substantially the same or of equal value (objectively assessed)?
- If they are, then ask whether there are differences in terms and conditions of employment, including remuneration?
- If yes, can these differences be justified on fair and rational grounds (nor related to unfair discriminatory grounds)?
Second step: Ask what does work of equal value mean?
Work of equal value can be defined as follows:
- Identical or interchangeable work or work that is substantially the same to the extent that they are doing the same job; or
- Work of the same/equal value, even if it is a different job, where the jobs are objectively (free of discrimination) assessed, taking into consideration:
- Responsibility demanded of the job; relating to responsibility for people, finances and material. The employer must also consider who is responsible for delivering the goals of the organisation and the various types of responsibilities independently from the hierarchical level of the job.
- Skill, qualification, prior learning and experience required to perform the job (formal or informal) qualifications and skill can be acquired in various ways and the skill and qualifications must be relevant for the job;
- Physical, mental and emotional effort. This includes the fatigue and tension caused. Not only physical efforts but also mental and psychological effort ;
- The conditions under which the work is performed such as physical environment, psychological conditions, geographical location (this may be addressed through paying an allowance and may not always be relevant to determine the value of a job);
- Any other relevant factor relating to the jobs.
The following factors may be relevant in determining the value of a job (as determined above):
- Responsibility (output) – Impact, decision making, accountability, internal and external contacts, directing the work of others and size or turnover.
- Skill (input) – knowledge/skill, analytical ability, communication, planning of work, influence, job complexity, recognition of prior learning and qualifications.
- Effort (process) – Physical demands, pressure and mental exertion, planning of work, problem solving, complexity of services and products.
- Conditions of work (if taken into account) – Geographical location, size, time of work, safety conditions, environmental factors.
An employer may refer to classifications of relevant jobs in terms of sectoral determinations in terms of section 55 of the BCEA. Complaints about unequal benefits in terms of sectoral determinations should be directed to the relevant Bargaining Council or the unions.
Employers are not required to use job evaluation systems, but if they do, it must be discrimination free. The employer may also elect to use the 6 occupational levels in the EEA9 as a basis for grading their jobs.
Step 3: Determining the factors justifying differentiation:
Once there are grounds to believe that there is differentiation then the differentiation must be fair and rational and based on the following:
- Seniority and/or length of service;
- Qualifications, ability, competence, or potential above the minimum acceptable levels of performance;
- Performance, quality of work, (depending on consistent application of performance evaluation);
- In the case of a valid and legal demotion and the employee’s remuneration is fixed until the other employee reaches the same level;
- Temporary appointment in a position for training or experience purposes which enjoys different terms and remuneration;
- Shortage of relevant skill or market value in a particular job classification; or
- Any other relevant factor which does not amount to unfair discrimination.
Differentiation must be proven in terms of section 11 not to be unfair discrimination based on race, gender or disability or any ground set out in section 6.
Employers should also heed against indirect discrimination or perpetual discrimination against females based on stereotyping of positions. For instance:- the use of length of service or seniority may be indirectly discriminatory as females interrupt their service for family responsibility purposes.
Employers must follow a sequential audit process for evaluating jobs. Where differentiation is unjustified, the employer must determine how to address the inequalities without reducing the remuneration of employees to bring in equal remunerations. This process must be evaluated annually.
Director: Johanette Rheeder Inc.
 Employment Equity Amendment Act no 47 of 2013.
 R 595 of GG 37873 of 1 August 2014>
 R 746 of GG 38031 OF 29 September 2014. This is a draft code and comment should be submitted within 30 days of publication. This document may change after comment of the public.