Equal pay for equal value judgment

Equal pay for equal value judgment

One of the most eye-catching amendments to recent amendments to labour legislation was the enactment of section 6(4) of the Employment Equity Act, which provides for equal pay for equal value.

The Draft Code of Good Practice on Equal Pay for Equal Value states that “Section 6(4) of the Act, which came into effect on 1 August 2014, 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, that is directly or indirectly based on any one or more of the grounds listed in sub-section(1) or on any other arbitrary ground, is unfair discrimination”.

The recent Labour Court case of Pioneer Foods (Pty) Ltd v Workers Against Regression & 2 others [C687/15] dealt with the question of whether, or not, employers were entitled, or indeed permitted in law, toremunerate drivers differently based upon their length of service.  Perhaps more particularly, this case addressed the question of whether length of service was prohibited, arbitrary, unfair discrimination in the context of equal pay for work of equal value.

The Court was clear in finding that “Nothing in the EEA precludes an employer from adopting and applying a rule in terms of which newly appointed employees start at a rate lower than existing long-serving employees.  This applies whether or not the newly appointed employee had previous substantial experience, whether with the employer concerned or some other employer”.

Interestingly, the judgment continues that “It also applies whether or not the employee had, in the past, rendered services to the employer concerned via a labour broker”.

In this vein, the judgment referred to the Constitutional Court, which has held previously that “it is impossible to regulate a modern country without differentiation and without classifications which treat people differently and which impact on people differently”.

So, the Labour Court has confirmed that equal pay for equal work of value legislation does not preclude employers from discriminating, fairly between employees of various lengths of service, by remunerating longer serving employees at a higher rate than their peers with shorter service.

Even greater emphasis was placed on this by the Labour Court in this judgment when the judgment continued that “Differentiation in respect of terms and conditions of employment on the basis of length of service with the employer concerned is … a classic example of a ground for differentiation which is rational and legitimate and, indeed, exceedingly common … there is quite manifestly a rational connection between using length of service and loyalty of existing employees”.

Interestingly, in conclusion, the judgment noted that “Equal pay for work of equal value is a different concept from equal pay for the same work”.

Besides, the Code of Good Practice on Equal Pay for Equal Value itself “recognises length of service as a factor justifying differentiation in pay”.

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