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Ivan Israelstam | 29 October 2023

The law defines what constitutes unfair discrimination in differentiating between the terms and conditions of employment of employees.

The amended section to 6(4) of the Employment Equity Act provides that it is unfair discrimination for an employer to differentiate between the terms and conditions of employment of its employees if these differences are based on unfair discrimination grounds listed in the act and the employees affected are doing work of equal value.

The act’s requirement is fleshed out in a code of good practice that, read with section 6(4) of the act, requires all employers including the state to implement specific measures to achieve fairness in employment conditions, including job grading, pay comparison and explanation of pay differentials.

The act amendment has been in effect for several years, and noncompliant employers are liable for prosecution at the CCMA.

What does the act mean by “work of equal value”?

It refers to two or more jobs that may be entirely different but have the same rating value as each other. For example, it is possible that the job of a sales representative and that of a machine operator could be at the same grade level in terms of job evaluation criteria that cut across different jobs. It is the job and not the incumbent that is graded.

What is remuneration and how must its fairness be monitored?

“Remuneration” as defined in the act 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 statutory concept of remuneration includes deferred remuneration, commission and other forms of variable compensation or pay.

Employers must therefore, examine all their policies, procedures and practices relating to remuneration, benefits and other employment conditions to ensure compliance with the principle of equal remuneration for work of equal value. Practical necessity requires that, to satisfy these requirements, all employers establish remuneration committees that should annually review all remuneration and benefits received by employees to ascertain whether they are legally compliant, appropriate and competitive. The committees should also assist senior management in setting up and administering a remuneration policy.

What are the necessary steps to determine compliance with section 6(4)?

The first step requires a determination of whether the jobs being compared are the same, substantially the same or of equal value in terms of an objective assessment. This means that the code does not prescribe which job grading system is used but only that an objective measure is required.

The code provides for the following criteria to be used to assess and compare the value of different jobs: The responsibility demanded by the work; the skills and qualifications required for the work; and the physical, mental and emotional effort required to perform the work.

The weighting attached to each of these criteria may vary depending on the sector, employer and the job concerned.

The second step requires a determination of whether there are any differences in terms and conditions of employment, including remuneration of the employees in the jobs that have to be graded and compared.

The final step requires the employer to determine whether the differences identified are justifiable on fair and rational grounds. Differences are justifiable if they are based on the individual’s seniority or length of service; the individual’s qualifications, ability or competence; the individual’s performance or quality of work; whether the employee has been demoted for any legitimate reason but draws a salary still fixed at a higher level than employees in his/her new job category until their remuneration reaches that level, where an individual is temporarily in a position for the purpose of gaining experience or training or a difference in terms and conditions due to the existence of a shortage of relevant skill in a particular job classification.

It is essential for every employer to appreciate the size and complexity of the task at hand. Success in completing this major change in a practical, operationally effective and legally compliant manner will therefore require the use of an expert who is versed in labour law and, at the same time, skilled in the implementation of job grading systems.

‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’.


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