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 Code has been issued 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 essential fact to keep in mind is that the Code’s new regulations apply to all employees and employers covered by the EEA. The new Code should 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.
What the new Code of Good Practice sets out
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.
One of the new elements refers to the fact that the tendency is for an equal payment and employers should check their policies to make sure they comply with the new regulations. Also, employers are given a positive responsibility when it comes to promoting “equal opportunity in the workplace by eliminating unfair discrimination in any employment policy or practice”. They 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 new key issues when examining whether the employer is complying with its obligation for equal payment policies:
#1: Whether the jobs that are being compared are the same, substantially the same or of equal value in terms of an objective assessment
#2: Whether there is a difference in the terms and conditions of employment of the employees whose jobs are the subject of comparison
#3: 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)
Moreover, that the ILO Convention, which is echoed in the Code, focuses on gender based discrimination in terms of job evaluation and promotes objective appraisal of jobs.
To prevent discrimination, some of these criteria include the responsibility demanded of the work, the skills qualifications (including prior learning) and experience required to perform the work, whether formal or informal, together with the physical, mental and emotional effort required to perform the work.
Other criteria consists in the assessment of working conditions (an assessment of the physical environment, psychological conditions, time pressures and geographic location of the work performed; and which may take into account the conditions under which the employees work).
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. The new Code brings South Africa in line with top global practices on equal pay for equal work.
As a final note, employers should know that the Code is framed by section 9 of the Constitution, the International Labour Organisation (ILO) Equal Remuneration Convention 1951 (No. 100) and s6(1) and 6(4) of the EEA, which prohibits unfair discrimination.
Our next article on Equal Pay for Work of Equal Value, Part 2, will deal with income differentials and steps that will ensure fair pay practices.