The principle of “Equal pay” is rooted in the avoidance and alleviation of unfair discrimination as stipulated in Section 6(1) of the Employment Equity Act No 55 of 1998.
To ensure compliance with the principle “Equal pay for Work of Equal Value”, employers should consider the following:
- Implement a sound job evaluation process and adopt an objective system to ensure proper evaluation of jobs on the basis of the work to be performed in accordance with relevant and appropriate criteria/factors. The basic criteria/factors commonly used to evaluate the relative worth of a jobs are responsibility, skills, qualifications, experience, effort and working conditions;
- Ensure HR and Remuneration policies and practices are fair, objective, transparent and can be consistently applied for all employees. Any provisions in the Remuneration Policy which excludes an employee group, may illicit scrutiny from an Equal Pay perspective. It is important that eligibility for the receipt of certain allowances or benefits be fairly determined and is clearly defined in company policy.
- The same holds true for the standard terms and conditions of employment. 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) or on any other arbitrary ground, is unfair discrimination.
Below we provide a practical example of how policy and standard terms and conditions may be scrutinized for compliance purposes with the principle of “Equal Pay”.
- A company pays a Cellphone Allowance to specific employees due to the nature of their role, in order to perform their there an exposure with regards to unfair discrimination? On face value it would appear not, as the provision of the allowance supports operational requirements, however, this is not correct.
- The term “remuneration” as defined in the Basic Conditions of Employment Act3, 1997 (Act No. 75 of 1997), as amended and other labour legislation includes any payment in money or in kind, or both, made or owing to any person in return for working for another person, including the State.
- The provision of a Cellphone Allowance, where the employee receives the actual cash thereof, will constitute as part of remuneration as per the definition in the BCEA. This definition is referred to in the Code of Good Practice on Equal Pay/Remuneration.
- It may therefore create an “Equal Pay” exposure if there are employees receiving a Cellphone Allowance (remuneration) and other employees who do not receive the same allowance. There is no defensible justification (see section 7 in the Code) from an Equal Pay perspective and it creates, whether direct or indirect, a perceived ground for unfair discrimination.
- The only scenario pertaining to the provision of a Cellphone Allowance, which will not create an Equal Pay exposure, is if a Cellphone Allowance is offered to all employees, where the amount may vary according to grade/level, and where it is provided on a use-it-or-loose-it basis, as it then becomes elective and those who use it and those who do not, is based on employee choice and not company policy.
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