EQUAL PAY FOR WORK
OF EQUAL VALUE

We have designed analytic tools and dashboards that will assist companies to measure, identify and analyse potential risks with regard to maintaining internal equity, which complies with the promulgated Employment Equity Amendment Act, number 47 of 2013 requirements, within their organisations. Our tools will enable companies to monitor their internal equity over a period of time to facilitate the necessary information to identify and highlight inequalities between employees doing the same or similar job within the organisation and monitor and report on corrective action taken.

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◦ equal pay for work of equal value ◦ equal pay for work of equal value ◦ equal pay for work of equal value

The principle of “Equal pay” is rooted in the avoidance and alleviation of unfair discrimination as stipulated in Section 6(1) of the Employment Equity Act No 55 of 1998.

The Code provides 3 key issues (Sub section 4.4, page 10) which require scrutiny when examining whether the employer is complying with its obligation to apply equal pay in the workplace, as depicted below:

1

Are the jobs that are being compared the same, substantially the same or of equal value in terms of an objective assessment?

2

Is there a difference in the Terms and Conditions of Employment of the employees whose jobs are the comparison?

3

If there is a difference, are the differences justified on fair and rational grounds in terms of Regulation 7 of the EEA (Section 7, page 13)?

The schematic below highlights the main areas where the employer will be obligated to ensure compliance by conducting internal reviews, analysis, reporting and corrective action.

EQUALITY IN THE WORKPLACE

Eliminate unfair discrimination in Pay/Remuneration/Human Resources Policies, Practices and Procedures (Sub section 3.5, Page 9).

Apply remuneration policies and practices consistently without unfair discrimination on basis of listed grounds or any other arbitary ground (Sub section 3.6, Page 9).

Select a fair and rational method of comparison i.e. average / median values. 

Report on pay/remuneration and benefits received by employees in each occupational level (Section 3, Page 9).

Based on work performed and 4 criteria (Sub section 5.4, Page 11) to prevent discrimination. 

  1. Responsibility demanded of the work.
  2. Skills, qualifications, experience required. 
  3. Physical , mental and emotional effort. 
  4. Working conditions. 

Ensure no gender discrimination (Section 6, Page 12).

Are the reasons justifiable, fair and rational? 

Develop solutions and an action plan to address unjustified differentiation. 

Address disproportionate income differentials (without reduction of pay) to establish equal pay (Sub section 3.8, page 9).

  • Implement a sound job evaluation process and adopt an objective system to ensure proper evaluation of jobs on the basis of the work to be performed in accordance with relevant and appropriate criteria/factors. The basic criteria/factors commonly used to evaluate the relative worth of a jobs are responsibility, skills, qualifications, experience, effort and working conditions;
  • Ensure HR and Remuneration policies and practices are fair, objective, transparent and can be consistently applied for all employees. Any provisions in the Remuneration Policy which excludes an employee group, may illicit scrutiny from an Equal Pay perspective. It is important that eligibility for the receipt of certain allowances or benefits be fairly determined and is clearly defined in company policy.
  • The same holds true for the standard terms and conditions of employment. 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, that is directly or indirectly based on any one or more of the grounds listed in subsection (1) or on any other arbitrary ground, is unfair discrimination.

A company pays a Cellphone Allowance to specific employees due to the nature of their role, in order to perform their duties.

The term “remuneration” as defined in the Basic Conditions of Employment Act3, 1997 (Act No. 75 of 1997), as amended and other labour legislation includes any payment in money or in kind, or both, made or owing to any person in return for working for another person, including the State.

  • The provision of a Cellphone Allowance, where the employee receives the actual cash thereof, will constitute as part of remuneration as per the definition in the BCEA. This definition is referred to in the Code of Good Practice on Equal Pay/Remuneration.
  • It may therefore create an “Equal Pay” exposure if there are employees receiving a Cellphone Allowance (remuneration) and other employees who do not receive the same allowance. There is no defensible justification (see section 7 in the Code) from an Equal Pay perspective and it creates, whether direct or indirect, a perceived ground for unfair discrimination.
  • The only scenario pertaining to the provision of a Cellphone Allowance, which will not create an Equal Pay exposure, is if a Cellphone Allowance is offered to all employees, where the amount may vary according to grade/level, and where it is provided on a use-it-or-loose-it basis, as it then becomes elective and those who use it and those who do not, is based on employee choice and not company policy.
  • Design a “Pay Diagnostic and Assessment Tool” to proactively measure and analyse your pay/remuneration internal equity and highlight possible risks of non-compliance.
  • Job Evaluation – We have extensive experience in Job Evaluation having used numerous Job Evaluation Systems, provided training on conducting Job Evaluation and attended Job Evaluation Committees as external advisors to companies.
  • Review your Remuneration Policy and Employment Contracts to ensure alignment to the principle of equal pay and ensuring good corporate governance thereon.
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