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Employers advised to guard against pay discrimination claims

Employers should scrutinise their pay practices to ensure that differences in remuneration are justifiable and aren't grounds for claims of unfair discrimination. This follows the inclusion of section 6(4) in the Employment Equity Act, which now expressly accommodates claims of equal pay for work of equal value in the general prohibition against unfair employment discrimination.

The date on which this amendment will take effect is to be determined by the president. While we don't know when this will be, the Employment Equity Amendment Act 2013 was approved by parliament and it is just a matter of time before section 6(4) takes effect.

Section 6(4) provides that the following is unfair discrimination:

  • A difference in the employment terms between employees, who work for the same employer and perform substantially the same work or work of equal value, which is based on any of the grounds listed in section 6 (1) of the act (e.g. race, gender, age, language and sexual orientation), or
  • Any other arbitrary ground, which isn't allowed.

To assess if an employer has broken the legislation, it must be established that the work is the same or similar, or of equal value. Factors to be considered include:

  • The responsibility demanded of the work,
  • The skills and qualifications required, and
  • The physical, mental and emotional effort required to perform the work.

The conditions under which work is performed may also be relevant

If a difference in remuneration is based on a ground listed in section 6(1), or any arbitrary ground that isn't allowed or justified, you - the employer - will be at risk of a finding of unfair discrimination.

In these circumstances, the Labour Court has wide ranging powers about the relief it might order. This relief includes:

  • Eliminating unfair discrimination,
  • Paying damages, and
  • Giving compensation to the employee.

However, there are various factors that could justify a difference in pay, including the individuals':

  • Seniority, length of service, qualifications, ability, competence or potential above the minimum acceptable levels required for the performance of the job, and
  • Performance, quantity or quality of work can also be taken into account, provided they are subject to the same evaluation system.

Sanet de Lange of Hay Group said: "Work measurement, or job evaluation, uses job analysis to enable organisational effectiveness by matching people and jobs, and by knowing what work is worth.

"The job evaluation system should be logical, systematic and objective. It needs to be updated to remain valid and should be able to evaluate all types of jobs, catering to the uniqueness of professional and specialist positions. Fundamental to managing equal pay risk, job evaluation reduces the risk of time consuming, damaging and expensive discrimination claims," said De Lange.

Equal pay needs to be seen in the context of a more holistic analysis of HR practices if equal pay defences are to succeed. Companies need to audit their HR systems to ensure compliance with new legislation on equal pay for work of equal value.