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How the Employment Equity Amendment Act will affect you

Johan Botes
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The Employment Equity Amendment Act (EEAA) took effect on 1 August 2014 and the question on most people's lips is: How will this affect employers? Any decent lawyer will tell you that it all depends! If your employment policies and practices are in order and are regularly audited to ensure these don't unfairly discriminate, the EEAA will have very little effect on your business. However, employers with more dated policies and practices may be on the receiving end of claims made by employees who seek solace in terms of the EEAA.

The Employment Equity Act (EEA) seeks to:

  • Promote equality in the workplace,
  • Eliminate unfair discrimination, and
  • Ensure the implementation of affirmative action measures to redress employment disadvantages experienced by designated groups.

The amendments to the EEA will drive the aims of this act even further

How?

The EEA now contains a new provision that outlaws differences in employment conditions that are based on any of the prohibited grounds of discrimination where the employees involved perform the same work or work of the same value. The grounds of discrimination contained in section 6(1) of the EEA now also includes "...any arbitrary ground".

Equal pay for equal work provisions are nothing new

In the United Kingdom, a whole cottage industry has blossomed to deal with the complex disputes arising from the above-mentioned type of unfair discrimination claims. Employers rely on experts who can evaluate and compare the relative worth of different positions, such as:

  • Justify why a secretary with 20 years' service should not be paid the same as another with five years' service but with better qualifications, and
  • Quantify the range of remunerations and benefits that are applicable to a number of employees working in the same job category.

It appears likely that our jurisdiction will follow suit.

Employers don't need to pay all equal-level staff the same salary

The employer's ability to differentiate on employment conditions - notably salary and other contractual benefits - are not encumbered by the EEAA. However, employers must be able to prove that the differentiation falls in the grounds provided in Item 7 of the new regulations published in terms of the EEA on 1 August 2014. Let me explain by way of example:

An employer will still be able to pay one personal assistant more than another based on differences in:

  • Experience,
  • Qualifications,
  • Job performance,
  • Competence, and/or
  • Scarcity of skills.

While employers should ensure that their employment and remuneration practices are free from arbitrary discrimination, this does not mean that employers are now prevented from:

  • Rewarding employees for performance,
  • Recognising long service, or
  • Paying a premium for scarce skills.

Arbitrary preferential treatment will more likely come under scrutiny and face sanction. Employers are urged to consider the regulations when assessing if work is of equal value (item 6) and those factors justifying differentiation in terms and conditions of employment (item 7).

Employees can now refer sexual harassment disputes to the CCMA

This type of discrimination need not be adjudicated by the Labour Court anymore. This should relieve some pressure from the Labour Court roll and allow these disputes to be resolved more efficiently. Employees will be affected by this in two ways:

  • They may benefit from the less formal process at the CCMA and feel more at ease in representing themselves in such disputes, and
  • Employees earning less than the earnings threshold may now refer other discrimination disputes to the CCMA for arbitration. Those earning above the threshold must still obtain the employer's consent to have the dispute resolved through arbitration at the CCMA instead of adjudication by the Labour Court.

The EEAA ushered in increases in the penalties payable due to non-compliance

Interestingly, this sees some of the penalties following the structure of penalties created in the Competitions Act where the penalty amount for non-compliance is based on a percentage of annual turnover. This should get the attention of delinquent companies who were willing to pay the notional penalties under the EEA until 31 July 2014 instead of complying with the provisions. Greater compliance with the EEA and its provisions should be encouraged and any step taken to achieve this deserves special mention. Hopefully this will give those employers on the periphery the motivation they need to join the road to compliance.

The EEAA has received its fair share of negative press in the period leading up to its implementation. On the whole, though, the amendments appear to be reasonable and aimed at streamlining dispute resolution, clarifying or extending the scope of unfair discrimination and focusing attention on the effects of non-compliance. It is in our national interest that this important piece of legislation operates effectively and commands compliance. The amendments to the EEA can assist us in effectively managing this critical aspect of workplace law in our country.


Johan Botes is a partner and heads Baker McKenzie’s Employment & Compensation Law Practice Group in Johannesburg. He focuses on employment law and labour relations and advises clients on industrial relations, employment negotiations, labour dispute resolution and change management.

He also advises companies on organizational restructuring. Mr. Botes' focus is on South African and sub-Saharan African employment law and employee relations.


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