By lvan lsraelstam, chief executive of Labour Law Management Consulting
A crucial amendment to section to 6(4) of the Employment Equity Act (EEA) 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 the unfair discrimination grounds listed in the EEA and
• the employees affected are doing work of equal value.
The EEA’s requirement is fleshed out in a Code of Good Practice (the Code) which, read together with the EEA, requires all employers to implement very specific measures to achieve fairness in employment conditions, including job grading, pay comparison and explanation of pay differentials.
It is stressed that this EEA amendment has already been in effect for several years, and non-compliant employers are currently liable for prosecution at the CCMA.
What does the EEA mean by ‘work of equal value’?
This 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 rep. and that of a machine operator could be at the same grade level in terms of job evaluation criteria that cut across different jobs.
How must remuneration fairness be monitored?
“Remuneration” is payment in money or in kind, or both, made or owing to any person in return for working for another person, including the State.
Employers must examine all their policies, procedures and practices relating to remuneration, benefits and other employment conditions so as to ensure compliance with the principle of equal remuneration for work of equal value.
The steps necessary to determine compliance with Section 6(4) are:
- A determination of whether the jobs being compared are the same, substantially the same or of equal value in terms of an objective assessment. The Code does not prescribe which job grading system must be used but only that it must be objective.
The following criteria must be used to assess and compare the value of different jobs:
• the responsibility demanded by the work
• the skills and qualifications required and
• the physical, mental and emotional effort required to perform the work.
- 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.
- A determination by the employer to determine whether the differences identified are justifiable on fair and rational grounds. Differences are justifiable if they are based on any of the following grounds:
• 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;
• where an individual is temporarily in a position for the purpose of gaining experience or training;
• 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.