CODE OF GOOD PRACTICE: ‘EQUAL PAY FOR WORK OF EQUAL VALUE’ – GLOSSARY OF LEGAL TERMS, WORDS & PHRASES [PART ONE]

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INTRODUCTORY COMMENTS

As readers of this posting would in all probability be aware the first of the amendments to South African labour legislation namely, the The Employment Equity Amendment Act, 47 of 2013 [EEA] and the Employment Equity Regulations, 2014 [EER] came into effect on 01 August 2014.

Following thereon, the Minister of Labour, in terms of Section 54(1) of the Employment Equity Act, 1998 (Act No 55 of 1998 as amended), and on the advice of the Commission for Employment Equity, published a draft Code of Good Practice on Equal Pay for Work of Equal Value (‘the Code’) for public comment.

The dates for submission of comment have come and gone and insofar as public comment in the media and other relevant publications on labour issues are concerned, nothing of note was reported as to the contents of the draft Code.

Shortly before the festive season dawned upon us the President of the RSA, by means of proclamation declared that the Labour Relations Amendment Act, 2014 (Act No 6 of 2014) (‘the LRAA’) shall come into operation on 01 January 2015.

Therefore and as from New Years day, to wit, 01 January 2015 all the legislative amendments would be of full legal force and effect. This will bring into fruition the proposed legislative reforms that formed the subject matter of extensive consultations held over a period of almost four years at NEDLAC whereupon ‘consensus’ was reached as to most of the amendments to labour laws.

One of the more important and regarded by some as controversial is the codification as part of SA Employment Equity Law namely the internationally recognized principle of ‘EQUAL PAY FOR WORK OF EQUAL VALUE’. This was done in compliance with South Africa’s public international law obligations and more specifically the Conventions of The International Labour Organisation (the ILO) – Convention 100 dated 06 June 1951, adopted at its 34th Session as proposals in the form of ‘Articles’ and duly incorporated as part of the ‘Equal Remuneration Convention, 1951 (No. 100).

From an interpretive perspective and also included as part of SA Employment Equity Law are those international law obligations as contained in the ILO Convention (111)…’Discrimination in Respect of Employment and Occupation.’  

In an attempt at providing clarity and practical guidance the draft Code of Good Practice on Equal Pay for Work of Equal Value (‘the Code’) was published as referred to supra.

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 their workplaces. This Code seeks to promote the implementation of remuneration equity in the workplace by employers, including the State, employees and trade unions through human resources policies, procedures, practices and job evaluation processes.” [See: EMPLOYMENT EQUITY ACT, 1998 (ACT 55 OF 1998 AS AMENDED) DRAFT CODE OF GOOD PRACTICE ON EQUAL PAY FOR WORK OF EQUAL VALUE, GOVERNMENT GAZETTE, 29 SEPTEMBER 2014, No. 38031 at 4].

Pursuant to a posting in LinkedIn by SA Labour Guide (Labour Law) and in particular with reference to  an interesting publication by Griessel Consulting “EQUAL PAY CLAIMS – PRACTICAL GUIDELINES” (2014) info@griesselconsulting.co.za; including the Code supra, it was deemed appropriate and in the interests of clarity and legal compliance to conceptualize and draft this ‘article’ or posting.

PURPOSE OF THE ‘ARTICLE’ CUM ‘POSTING’

The purpose hereof is to provide the reader with a ‘Glossary of Legal Terms, Words & Phrases’ in edification of terminology used in the Code and referred to in the publication by Griessel supra. Most if not all of the terms, words and phrases contained herein are interchangeably contained in the Code as well as in Griessel.

The readers hereof would find it of considerable benefit to obtain a copy of the publication by Griessel as well as the Code in that it would prove to be of assistance in ensuring compliance with the law as it pertains to the principle of Equal Pay for Work of Equal Value.

At the outset it should not be recorded that postings on the LinkedIn network should preferably be brief and not created; nor should it be perceived by the reader as if a comprehensive or an authoritative work of reference on the subject matter. The objective is to edify, within the confines of the medium and to generate interest and possible debate on the subject matter.

GLOSSARY OF LEGAL TERMS, WORDS & PHRASES – ‘EQUAL PAY FOR WORK OF EQUAL VALUE’

‘DISCRIMINATION’ OR ‘TO DISCRIMINATE’

The term ‘discrimination’ or ‘to discriminate’ is widely used, by all and sundry, not only within the sphere of employment law. The use of the term or notion is to be found within almost all areas of human interaction albeit socially, politically or wherever it finds appeal. For the purpose of this article it would be analysed from an employment law perspective.

In Woolworths (Pty) Ltd v Whitehead [2000] 6 BLLR 640 (LAC) at [70] – [71] the SA Labour Appeal Court observed in a matter that pertained to “unfair discriminationon the ground of pregnancy, at [71] that “[Traditionally]…the use of the word “discrimination” in its modern sense was, if not unheard of, considered to be a serious solecism. One has only to compare the current Oxford Dictionary with fairly recent past editions to understand that “discrimination” in the sense of being some kind of concrete act that impacts unjustly, prejudicially and negatively upon another is a modern concept…” [Emphasis added].

Grogan, J “Dismissal” Juta 2014 ed. at 137 observes that “discrimination”, in its neutral sense, arises when an employee is treated differently from his or her colleagues in circumstances, which on the face of it; indicate that the employee should not be treated differently.” [Emphasis added].

ILO Convention no 111,”The Convention Concerning Discrimination in respect of Employment and Occupation of 1958 read together with the Recommendation of the same number. Article 1 of the Convention defines the term “discrimination”.

It provides:

“1.For the purposes of this Convention, ‘discrimination’ includes–

(a) any distinction, exclusion or preference made on the basis of race, colour, sex, religion, political opinion, national extraction or social origin, which has the effect of nullifying or impairing equality of opportunity or treatment in employment or occupation;

(b) such other distinction, exclusion or preference which has the effect of nullifying or impairing equality of opportunity or treatment in employment or occupation as may be determined by the Member concerned after consultation with ‘representative employers’ and ‘workers’ organisations, where such exist, and with other appropriate bodies.

 

  1. Any distinction, exclusion or preference in respect of a particular job based on the inherent requirements thereof shall not be deemed to be discrimination. [Emphasis added].

 

  1. For the purpose of this Convention the terms ‘employment’ and ‘occupation’ include access to vocational training, access to employment and to particular occupations, and terms and conditions of employment.” [Emphasis added].

Article 5(2) of the Convention provides that:

“Any member may, after consultation with ‘representative employers’ and workers’ organisations, where such exist, determine that other special measures designed to meet the particular requirements of persons who, for reasons such as sex, age disablement, family responsibilities or social or cultural status, are generally recognised to require special protection or assistance, shall not be deemed to be discrimination.”

It is generally accepted that ‘discrimination’ should be interpreted as implying a ‘pejorative meaning’ relating to the ‘unequal treatment of people based on attributes or characteristics attaching to them’. [See: Grogan at 137].

The requirement that discrimination must involve some detrimental impact is also found in the SA Equality Act, 4 of 2000, in which discrimination is defined as ‘any act or omission which imposes burdens, obligations or disadvantage on . . . or withholds benefits, opportunities or advantages from any person on one or more of the prohibited grounds’.

These complexities were largely avoided in the employment context with the enactment of the EEA. The interpretation clause of the EEA expressly states that the Act must be interpreted ‘in compliance with ILO Convention 111 Concerning Discrimination in Respect of Employment and Occupation’ [s 3(d) of Act 55 of 1998] which, in turn, defines ‘discrimination’ as including: [See: ILO Convention 111 (a) – (b) supra. [Emphasis added].

It will be noted that, in terms of South African Employment Equity legislation, the notion of ‘discrimination’ is separated as a form of conduct from the grounds which render it ‘unfair’, the Convention combines these two aspects into a single concept. There is, however, no difficulty in reconciling the two stages of the South African test to establish discrimination with the equivalent aspects of the ILO definition. [Emphasis added].

Measured against this definition, the South African concept of ‘discrimination’ (i.e., the ‘first stage’ of the inquiry) must be understood as meaning ‘any distinction, exclusion or preference. . . which has the effect of nullifying or impairing equality of opportunity in treatment in employment or occupation’. [Emphasis added].

This, it will be noted, offers a criterion which, in the employment context, is more precise and, arguably, more encompassing than the Constitutional test [See: Section 9 “Equality”, Constitution of RSA, 1996].

Rather than requiring a broad inquiry as to whether the employer’s conduct amounts to unequal treatment of a ‘pejorative’ nature, the question is rather whether it falls within the terms of the definition without necessarily making reference to a comparator or to its impact on the complainant’s dignity. [See: Gorgan at 137; Du Toit, D et al “Labour Relations Law – A Comprehensive Guide”, 2007 at Chapter XI 2.4. – “Discrimination”]. 

The second stage’ of the South African test – that is, the inquiry into ‘unfairness’ (discussed below) – corresponds to ascertaining whether discrimination is on a prohibited ground equivalent to those proscribed by the Convention. [Emphasis added].

The importance of Convention 111 as a point of reference in defining the meaning of ‘discrimination’ was accepted even prior to its ratification by South Africa in 1997. With the enactment of the EEA its status as a codified source of law was formally established.

‘DIRECT’ OR ‘INDIRECT DISCRIMINATION’

Direct discrimination:

In the authoritative publication by Pretorius, JL et al, “Employment Equity Law” LexisNexis 2012 (Service 12) [3-3] – [3-4], the learned authors refer to Lewis v Media 24 Ltd (2010) 31 ILJ 2416 (LC) at par 38: “[Discrimination] would be ‘direct’ if the employer ‘treats’ the employee differently from others because of the ‘prohibited ground’ – for example sexual harassment or a policy that provided housing subsidies for male teachers but not for female ones.” [The equivalent term in North America is “disparate treatment”]. 

Indirect discrimination:

In Lewis supra at par 38, the SA Labour Court observed that ‘indirect discrimination’ occurs when an employment policy or practice is based on a ‘non-prohibited ground’ (example, appearance or work experience), but its effect is that a category or group of persons, protected under a ‘prohibited ground’ of discrimination, is adversely effected. [The equivalent term in North America is “disparate impact discrimination” – see: Player “Employment discrimination law. Cases and materials (1988) 244 et seq; Hunter “Indirect discrimination in the workplace (1992) 3 – in re: Title VII of the USA Civil Rights Act 1964; also see: Pretoruis supra at 3-3].

For instance, basing an adverse employment decision on a physical requirement such as strength or height, does not fall directly under any of the ‘specified’ or rather ‘listed grounds’ or ‘analogous grounds’, but may in specific circumstances indirectly affect one of the specified grounds (e.g., gender, ethnicity or race), or may well constitute a form of discrimination that ‘indirectly’ impinges on the dignity of the individual. [Emphasis added].

For example, in IMATU & another v City of Cape Town [2005] 11 BLLR 1084 (LC) the Labour Court found that an Applicant for the job of a fire fighter who had been refused an appointment to this post because he was an insulin dependent diabetic (Type One diabetes) had been ‘unfairly discriminated’ against on a ground ‘analogous’ to that of the ‘listed grounds’ of disability, HIV Status or perhaps even birth. The test of whether a ground is analogous to the ‘listed grounds’ was whether the alleged discrimination had; ‘… the potential to impair the fundamental human dignity of persons as human beings or to affect them adversely in a comparably serious manner.’

Explanatory notes:

The use of the legal terms and phrases by reference to the authorities cited supra namely, ‘specified grounds’ or rather ‘listed grounds’, ‘analogous grounds’, ‘prohibited grounds’ and ‘non-prohibited grounds’ may be rather confusing to the reader in that they denote to the same or similar sections referred to in the Code, in Griessel, the EEA and EER.

It was therefore deemed appropriate and in clarification to quote the ‘new’ or amended section 6(1) of the EEA that deals with the Prohibition of ‘Unfair’ Discrimination:

‘‘(1) No person may unfairly discriminate, directly or indirectly, against an employee, in any employment policy or practice, on one or more grounds [listed grounds], including race, gender, sex, pregnancy, marital status, family responsibility, ethnic or social origin, colour, sexual orientation, age, disability, religion, HIV status, conscience, belief, political opinion, culture, language, birth or on any other arbitrary ground.’’; and

(2)…;

(3)…;

‘‘(4) 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), is unfair discrimination.” [Emphasis added].

‘UNFAIR DISCRIMINATION’

According to Pretoruis supra at 2-22, in which the learned authors referred to the judgment by the Constitutional Court in Harksen v Lane NO infra, that even though a differentiation in treatment does not necessarily constitutes a violation of Section 9(1) of the SA Constitution [‘The Equality’ clause], it may amount to ‘unfair discrimination’ for the purposes of Section 9(3) or (4) of the SA Constitution.

A distinct and separate two stage analysis is required, namely:

  • The question whether differentiation amounts to ‘discrimination’?; and if it does
  • The question whether the differentiation amounts to ‘unfair discrimination’?

In Harksen v Lane NO & others 1998 (1) SA 300 (CC) when interpreting and applying section 8 of the Interim Constitution, the Equality Clause the SA Constitutional Court commented as follows –

‘What the specified grounds have in common is that they have been used (or misused) in the past (both in South Africa and elsewhere) to categorise, marginalise and often oppress persons who have had, or who have been associated with, these attributes or characteristics. These grounds have the potential, when manipulated, to demean persons in their inherent humanity and dignity… [See: IMATU v City of Cape Town supra].

In New Way Motor & Diesel Engineering (Pty) Ltd v Marsland [2009] 12 BLLR 1181 (LAC) a similar approach was adopted in the interpretation of s 187(1)(f) of the Labour Relations Act, 66 of 1995 which provides that discriminatory dismissals are automatically unfair. Section 6 of the EEA has now been amended to insert the words “and any other arbitrary ground” at the end of the section. The reason given in the explanatory memorandum for the amendment is –

‘… that it seeks to clarify that discrimination is not only permitted on a ground listed in that section but also on any other arbitrary ground.[See: Le Roux, PAK “The Employment Equity Act – New amendments set problems and posers” Contemporary Labour Law vol 24 2014, 1-2].

Suffice it to record that that the Code and the EER includes factors justifying differentiation in terms and conditions of employment [inclusive of remuneration] with the proviso that the differentiation does not constitute unfair discrimination in that the difference is fair and rational and based on those grounds as set out in regulation 7 of the EER and in item 7 the Code “Factors Justifying Differentiation In Remuneration”.

‘OTHER ARBITRARY GROUNDS’

Regulation 3(1) of the regulations published in terms of Section 55 read with s 6(5) of EEA distinguishes between a listed ground and an arbitrary ground. Regulation 3(1) stipulates:

“Eliminating unfair discrimination:

(1) An employer must, in order to eliminate unfair discrimination, take steps to eliminate differences in

terms and conditions of employment, including remuneration of employees who perform work of

equal value if those differences are directly or indirectly based on a listed ground or any arbitrary

ground that is prohibited by section 6(1) of the Act.

(2) Without limiting sub-regulation (1), an employer must ensure that employees are not paid different

remuneration for work of equal value based on race, gender or disability.”

According to Le Roux supra 3, Section 6(4) of the EEA does not state that a difference in terms and conditions of employment in the circumstances envisaged therein constitutes discrimination but rather that it constitutes unfair discrimination. At first sight this therefore means that once a difference as envisaged in Section 6(4) is established this will be regarded as unfair discrimination.

But this must be read with s 6(2) which states that it is not unfair discrimination to take affirmative action measures or to distinguish, exclude or prefer on the basis an inherent requirement of the job.

According to Grogan supra 158, not every arbitrary dismissal [reference to Section 187(1)(f) of the LRA ‘automatically unfair – arbitrary grounds’] is necessarily discriminatory. ‘Arbitrary’ means, in its generally accepted sense, an action that is capricious, or not based on reason.

In Woolworths (Pty) Ltd v Whitehead [2000] 6 BLLR 640 (LAC) ‘arbitrary’ was defined as denoting ‘the absence of a justifiable reason’ [at para 128]; also see: Louw v Golden Arrow Bus Services (Pty) Ltd [2000] 3 BLLR 311 (LC).

Therefore, the defence or as some termed them ‘the escape clauses’ as stipulated in Section 6 (2) of the EEA remain of relevance. Section (6)(2) stipulates:

“(2) It is not unfair discrimination to—

(a) take affirmative action measures consistent with the purpose of this Act; or

(b) distinguish, exclude or prefer any person on the basis of an inherent requirement of a job.”

One will have to adopt a ‘wait and see approach’, so to speak as to the interpretation by the Courts as to the interpretation and application of the term ‘an arbitrary ground.’

The listed grounds contained in Section 6(1) of the EEA referred to supra is not a closed list and ‘arbitrary grounds’ are not listed. The importance of the basis of a cause of claim albeit on an allegation of unfair discrimination on the ‘listed grounds’ or ‘arbitrary grounds’ would be revealed hereunder when the meaning of the onus or burden of proof are clarified.

‘REMUNERATION, BENEFITS & TERMS AND CONDITIONS OF EMPLOYMENT’

The Code stipulates under the heading “SCOPE”: that this Code must be read in conjunction with –

2.1.1. the regulations [EER] made by the Minister of Labour in terms of section 6(5) of the Employment Equity Amendment Act on the criteria and methodology for assessing work of equal value; and

2.1.2. the Code of Good Practice on the Integration of Employment Equity into Human Resources Policies and Practices (the HR Code), in particular Part B dealing with Terms and Conditions of Employment.”

Remuneration:

“remuneration” means any payment in money or in kind, or both in money and in kind, made or owing to any person in return for that person working for any other person, including the State; [See: EEA section 1 “Definitions”].

 

Benefits: [Not defined – see: Apollo Tyres judgment infra].

The Labour Appeal Court in Apollo Tyres SA (Pty) Ltd v Commission for Conciliation, Mediation & Arbitration and others (2013) 34 ILJ 1120 (LAC) [also reported at [2013] 5 BLLR 434 (LAC) – Ed], extended the meaning of the word “benefit”. The Court at 1136 (paragraph 50) held as follows:

“In my judgment ‘benefit’ in section 186(2)(a) of the Act [the LRA] means existing advantages or privileges to which an employee is entitled as a right or granted in terms of a policy or practice subject to the employer’s discretion.”

The Court first considered the approach that a distinction should be drawn between a ‘benefit’ and ‘remuneration’. It came to the conclusion that this distinction was untenable. It did so in the following

terms –

“[25] The distinction that the Courts sought to draw between salaries or wages as remuneration and benefits is not laudable but artificial and unsustainable. The definition of remuneration in the Act [the LRA – section 213 “Definitions”] is wide enough to include wages, salaries and most, if not all extras or benefits.

Remuneration [the LRA – section 213 “Definitions”] is defined as:-

‘Remuneration means any payment in money or in kind made or owing to any person in return for that person working for any other person, including the State, and remunerate has a corresponding meaning.” [Emphasis added].

It is noteworthy that the definition of ‘Remuneration’ as defined in the EEA and the Labour Relations Act, 66 of 1995 (as amended) (the LRA) is exactly the same.

 

Terms & conditions of employment:

Terms and conditions are not defined, however referred to in the EEA, EER & the Code as is recorded hereunder.

Item 4 of the Code, “Eliminating Unfair Discrimination In Respect Of Remuneration” reads as is set out hereunder:

“4.1. An employer must, in order to eliminate unfair discrimination, take steps to eliminate differences in terms and conditions of employment, including remuneration, of employees who perform the same or substantially the same work or work of equal value that are directly or indirectly based on a listed ground or any other arbitrary ground”.

Regulation 7(1) of the EER stipulates as is set out hereunder:

“Factors justifying differentiation in terms and conditions of employment

(1) If employees perform work that is of equal value, a difference in terms and conditions of employment, including remuneration, is not unfair discrimination if the difference is fair and rational and is based on any one or a combination of the following grounds”…

Furthermore and of importance is that Section 6(4) of the EEA stipulates: ‘‘(4) 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), is unfair discrimination.” [Emphasis added].

It should be noted that in the EEA – Code of Good Practice: Human Resources Policies and Practices (the HR Code) Part B – dealing with Terms and Conditions Of Employment – Item 11 ‘Terms and conditions of employment’ reference is made to issues such as, working time, rest periods, leave, rates of pay, overtime rates, allowances, retirement schemes, medical aid and other benefits.

It should be noted further that in Section 2.1.2 of the draft Code specific reference was made to the HR Code supra and that the draft Code should be read in conjunction with the HR Code as contained in the EEA.

CONCLUDING REMARKS

This posting cum article constitutes the first part of a two part posting on the subject matter. As may be gleaned an attempt was made to address some of the terminology and legal concepts that are more broadly used and referred to in the draft Code, the EER, the EEA as well as in the other reference works referred to herein.

In the second part specific reference would be made to the terminology and phraseology arising from Equal Pay Claims based on the legal principle of Equal Remuneration for Work of Equal Value.

Johann Scheepers

30/12/2014

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