Reviewing the Suitability of Affirmative Action and the Inherent Requirements of the Job as Grounds of Justification to Equal Pay Claims in Terms Of the Employment Equity Act 55 of 1998

S Ebrahim*

Abstract

Keywords

Equal pay; Employment Equity Act; Equality Act; International Labour Organisation; Equal Pay Guide; Equal Remuneration Convention; grounds of justification to equal pay; affirmative action; inherent requirements of the job.

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1 Introduction

The Employment Equity Act1 has been amended to include a specific provision dealing with equal pay claims in the form of section 6(4). Section 6(4) of the EEA prohibits unfair discrimination in terms and conditions of employment between employees performing the same or substantially the same work or work of equal value. The Minister of Labour has issued Regulations and a Code to assist with the implementation of the principle of equal pay.2 Both the Regulations and the Code set out the criteria for assessing work of equal value as well as the grounds of justification to a claim of equal pay for work of equal value (factors justifying differentiation in terms and conditions of employment). The EEA refers to two grounds of justification in respect of unfair discrimination claims, namely affirmative action and the inherent requirements of the job.3 There is support for the view that these grounds of justification are not suitable to equal pay claims.4 There is a contrary view that these grounds of justification can apply to equal pay claims.5 The Labour Courts have not had the opportunity to analyse these grounds of justification in the context of equal pay claims. It is thus necessary to analyse these grounds of justification in order to ascertain whether they provide justifications proper to equal pay claims.

The purpose of this article is to analyse the grounds of justification to pay discrimination as contained in South African law, the Conventions and Materials of the International Labour Organisation ("ILO") and the equal pay

laws of the United Kingdom. Lastly, an analysis will be undertaken to determine whether affirmative action and the inherent requirements of the job provide justifications proper to equal pay claims.

2 The Employment Equity Act and the Employment Equity Regulations

Section 6(2) of the EEA provides that it is not unfair discrimination to take affirmative action measures consistent with the purpose of the Act or to distinguish, exclude or prefer any person on the basis of an inherent requirement of a job. The grounds of justification are thus affirmative action and the inherent requirements of the job. Section 6(4) of the EEA now provides for an explicit provision upon which an equal pay claim can be based. The section introduces three causes of action in this regard; (a) equal pay for the same work, (b) equal pay for substantially the same work and (c) equal pay for work of equal value. There is no section in the EEA which specifically sets out the grounds of justification to equal pay claims. The legislature has thus found it important to include a specific provision in the EEA to deal with equal pay claims but has not found it important to include a section which sets out the specific grounds of justification relevant to an equal pay claim. There is also no section which states that affirmative action and the inherent requirements of the job do not apply to equal pay claims. In the absence thereof, affirmative action and the inherent requirements of the job apply to equal pay claims. The Regulations then goes on to set out factors which would justify pay differentiation. These factors are: (a) seniority (length of service); (b) qualifications, ability and competence; (c) performance (quality of work); (d) where an employee is demoted as a result of organisational restructuring (or any other legitimate reason) without a reduction in pay and his salary remains the same until the remuneration of his co-employees in the same job category reaches his level (red-circling); (e) where a person is employed temporarily for the purpose of gaining experience (training) and as a result thereof receives different remuneration; (f) skills scarcity; and (g) any other relevant factor.6

The cardinal question which arises is: do affirmative action and the inherent requirements of the job apply to equal pay claims in the light of the fact that the grounds justifying pay differentiation are specifically set out in the Regulations and the Code? It cannot be assumed that affirmative action and the inherent requirements of the job do not apply to equal pay claims

because the factors justifying pay differentiation are set out in the Regulations and the Code, as these grounds of justification are set out in the EEA, which is primary legislation and not subordinate legislation, as is the case with the Regulations and the Code.

3 South African case law

In SA Chemical Workers Union v Sentrachem Ltd7 the applicants alleged that the respondent discriminated against its black employees by paying them less than their white counterparts who were employed on the same grade or engaged in the same work. The Industrial Court held that wage discrimination based on race or any other difference other than skills and experience8 was an unfair labour practice. The Industrial Court found that the respondent acknowledged the wage discrimination as alleged and committed itself to remove it. As a result thereof, the Industrial Court ordered the respondent to remove the wage discrimination based on race within a period of six months.9 It is clear that the principle of equal remuneration for equal work was recognised in this case.10 It is further clear that the Industrial Court considered skills and experience to be objective and fair factors upon which to pay black employees less than their white counterparts.11

In National Union of Mineworkers v Henry Gould (Pty) Ltd12 the applicant alleged that the respondent's refusal to implement wage increases to union members retrospectively constituted an unfair labour practice. The Industrial Court remarked that as an abstract principle, it is self-evident that equals should be treated equally. It further remarked that employees having the same seniority and in the same job category should receive the same terms and conditions of employment unless there are good and compelling reasons to differentiate between them. The Industrial Court ordered the

respondent to pay the union members the relevant amount of wages.13 It regarded seniority as a fair and objective factor to pay different wages.14

In Sentrachem Ltd v John,15 the High Court noted that it was common cause between the parties that a practice in which a black employee is paid a lesser wage than his white counterpart who is engaged in the same work whilst both have the same length of service, qualifications and skills constitutes an unfair labour practice based on unfair wage discrimination. The High Court remarked that this was the correct exposition of the law.16 This was a review application against the award made in Sentrachem I regarding the wage discrimination based on race. This award was set aside by the High Court for lack of an evidential basis to make the award.17 The High Court regarded length of service, qualifications and skills as fair and objective factors in law to pay different wages.18

In Mthembu v Claude Neon Lights,19 the respondent instructed its local management to evaluate each employee and make recommendations as to whether the employee should receive an increase in pay based on merit. Local management decided that two employees should not receive a merit increase. This decision gave rise to the application. The Industrial Court held that discrimination was absent and that it would not be in the interests of employers or employees to order that an employer is not entitled to differentiate between employees based on their productivity. It further held that an employer is entitled to reward an employee with a merit increase as that increases productivity.20 It is clear from this case that the Industrial Court regarded productivity as a fair and objective factor for paying different wages.21

In TGWU v Bayete Security Holdings22 the applicant admitted that he was not aware of the nature of the work performed by his comparator; neither was he aware of his comparator's educational qualifications or experience. The Labour Court remarked that the applicant expected it to infer that he was discriminated against on the ground of race on the basis that he was black and earned R1 500 whilst his white comparator earned R4 500. The Labour Court held that the applicant had not succeeded in proving that he had been discriminated against. It further held that the mere difference in pay between employees does not in itself amount to discrimination. The Labour Court remarked that discrimination takes place when two similarly circumstanced employees are treated differently on the prohibited grounds. It further remarked that responsibility, expertise, experience, skills and the like could justify pay differentials. The application was consequently dismissed.23 The Labour Court regarded responsibility, expertise, experience, skills and the like as fair and objective factors for paying different wages.24

In Heynsen v Armstrong Hydraulics (Pty) Ltd25 the applicant (a quality control inspector) alleged that he was discriminated against on the basis of race in that he earned less than his co-employees (quality control inspectors) who were part of the bargaining unit and who were weekly paid. The applicant did not belong to the bargaining unit and was monthly paid but the work performed was the same as that of his co-employees. The applicant sought an order directing the respondent to remunerate him on an equal pay for equal work basis. The Labour Court noted that there were differences in the terms and conditions of employment with regard to weekly paid and monthly paid employees.26 It further noted that monthly paid employees were entitled to certain benefits which hourly paid employees did not enjoy. The Labour Court held that it would not be fair if employees who were not part of the bargaining unit were to benefit from that unit while they still enjoyed benefits which were not shared by the bargaining unit. The Labour Court noted that according to the ILO, collective bargaining is not a

justification for pay discrimination.27 It cautioned that this rule was compelling in an ideal society and should not apply rigidly in South African labour relations due to the fact that collective bargaining was a hard-fought right for employees. The Labour Court characterised the applicant's complaint as wanting to have his cake and eat it. It found that insofar as their might be discrimination, it was not unfair, based on the facts. The application was consequently dismissed.28 The Labour Court regarded collective bargaining as a possible fair and objective factor for paying different wages.29

In Ntai v SA Breweries Ltd30 the applicants, black people, alleged that their employer committed unfair discrimination based on race in that it paid them a lower salary than their white counterparts whilst all of them were engaged in the same work or work of equal value. The applicants sought an order that their employer pay them a salary equal to that of their white counterparts. The respondent admitted that there was a difference in the salaries but denied that the cause of the difference was based on race. The respondent attributed the difference in pay to a series of performance-based pay increments, the greater experience of the comparators, and their seniority. The Labour Court accepted that the applicants had made out a prima facie case but noted that they still bore the overall onus of proving that the difference in pay was based on race. It found that the applicants had failed to prove on a balance of probabilities that the reason for the different salaries was based on race. The application was consequently dismissed.31 The Labour Court remarked that the respondent had no legal duty to apply affirmative action measures and somehow increase the salaries of the applicants. It further remarked that the application of an affirmative action measure was a defence which could be relied upon by an employer and did not constitute a right which an employee could use. The Labour Court noted that indirect discrimination exists when an ostensibly

neutral requirement adversely affects a disproportionate number of people from a protected group and it may also arise in the case of equal pay for work of equal value.32 It further noted that the use of ostensibly neutral requirements such as seniority and experience in the computation of pay could have an adverse impact on employees from the protected group if it was proved that such factors affected the employees as a group disproportionately when compared with their white counterparts who performed the same work.33

In Co-operative Worker Association v Petroleum Oil and Gas Co-operative of SA34 the second applicant alleged that the respondent committed unfair discrimination based on the absence of family responsibility in that employees with family responsibility (dependent spouses and children) received a higher total guaranteed remuneration than employees without family responsibility and this violated the principle of the right to equal pay for equal work or work of equal value. The Labour Court noted that the international community acknowledged the fact that workers with family responsibilities constituted a vulnerable group and are deserving of protection. Additional remuneration for these employees was endorsed and encouraged in terms of both national and international law.35 The Labour Court agreed with the respondent's submission that the definition of family responsibility made it clear that only those employees with dependants may utilise section 6(1) on the ground of family responsibility. The applicants could therefore not claim unfair discrimination on the basis of the absence of family responsibility, which is the corollary of the listed ground of family responsibility. The claim was consequently dismissed.36 The Labour Court regarded the absence of family responsibility as a justification for paying different wages.37

In Mangena v Fila South Africa (Pty) Ltd38 the applicant, a black male, alleged that the respondent discriminated against him on the ground of race in that it paid his chosen comparator, a white female, a higher salary even though the work performed by both of them was the same or alternatively

of equal value.39 The Labour Court found that the applicant had an exaggerated view of the nature of the work performed by him and it rejected his evidence as to the nature of the work performed by both him and the comparator and instead accepted the respondent's version in this regard. It found that the applicant had failed to establish that the work performed by him and the comparator was the same/similar.40 The Labour Court then noted that the applicant had not pleaded a claim of equal pay for work of equal value. The applicant argued that the Court could take a view on the facts before it as to the relative value of the respective work. The Labour Court remarked that to the extent that the issue of relative value was self-evident, the work which the applicant was engaged in was of considerably less value than that performed by the comparator taking into account the demands made, levels of responsibility and skills in relation to both jobs. It stated that an applicant claiming equal pay for work of equal value must lay a proper factual foundation of the work performed by himself and that of his chosen comparator to enable the court to make an assessment as to what value should be attributed to the work. This factual foundation might include evidence of skill, effort, responsibility and the like in relation to the work of both the claimant and the comparator.41

In Duma v Minister of Correctional Services42 the applicant (Duma) launched her claim for equal pay for the same work in the Labour Court. The matter was eventually set down for decision before the Labour Court in terms of a stated case. She was appointed to the post of Senior Correctional Officer: Manager: Legal Services at Voorberg in the Western Cape. This position was advertised at salary level 8 and Duma filled this post with effect from 1 August 2006. According to the stated case, it was agreed that the Manager: Legal Services positions in Limpopo, Mpumalanga, North-West and Kwazulu-Natal, inter alia, were on salary level 9. It was further agreed that this position should be at salary level 9 in terms of the Department's organisational structure, job description and title. It was agreed that there were disparities between various employees performing work with the same job description at different levels of pay. Duma brought this disparity to the attention of the Department, in particular, that her salary level be moved

from level 8 to level 9, but no action was taken by the Department to correct it.43

The Labour Court noted that Duma relied on section 6(1) of the EEA for her claim of unfair discrimination relating to equal pay. She relied upon the unlisted ground of "geographical location". The Court held that the basis for the differentiation which was the fact that Duma was employed by the Department in one province and not another, appeared to be entirely arbitrary. The Labour Court noted that the amended section 6(1) of the EEA, which was not applicable in this case, was amended to prohibit unfair discrimination on any other arbitrary ground. It held further that the use of the ground of geographical location as a basis for paying employees in one province less than employees in another province for the same work has the ability to impair the dignity of those employees in a manner comparable to the listed grounds and amounts to discrimination. The Labour Court stated that the respondents' baldly denied that it unfairly discriminated against Duma. They failed to explain the reason as to why Senior Correctional Officers in the Western Cape were on a lower salary level than their counterparts in other provinces. The Court held that the respondents were more concerned with the remedy that the applicant sought and whether it was competent for the Court to grant same.44

The Labour Court held that Duma had successfully proved that she was unfairly discriminated against with regard to her pay. It made the following compensation orders: (a) the respondents were ordered to pay Duma an amount equivalent to the difference between the remuneration she had received from August 2009 to the date of the order and the remuneration she would have received during that period had she been graded on level 9; and (b) to adjust her monthly salary to align with the current remuneration entitlement of an employee who had her job description and who was on salary level 9.45

In Pioneer Foods (Pty) Ltd v Workers Against Regression46 the Labour Court heard an appeal in terms of section 10(8) of the EEA against an arbitration award of the Commission for Conciliation, Mediation and Arbitration (CCMA) in which the Commissioner found that paying newly appointed drivers at an 80% rate for the first two years of employment as

opposed to the 100% rate paid to drivers working longer than two years in terms of a collective agreement amounted to unfair discrimination in pay. The CCMA in essence regarded the factor of seniority as a ground of discrimination as opposed to a ground justifying pay differentiation. The issue before the court was the interpretation of section 6(4) of the EEA, and in particular the issue of the factor of seniority operating as a ground of discrimination. The Workers against Regression ("union") wanted their members to be remunerated at the same rate as those employees who had been working for longer than two years at the appellant. They thus sought a 20% increase in their members' remuneration to bring it in line with the comparator employees' rate.47

The appellant, in accordance with a collective agreement concluded with the Food and Allied Workers Union ("FAWU"), pays newly appointed employees for the first two years of their employment at 80% of the rate paid to its longer serving employees, after which the rate would be increased to 100%. The Commissioner found that by applying this to its employees, the appellant had unfairly discriminated against them. He ordered that the rate of remuneration be changed to 100% for newly appointed employees and that damages be paid to the members of the union. The Labour Court found that the equal pay framework regards the factor of seniority as a ground which justifies pay differentiation and the Commissioner had misconceived the law by regarding it as a ground upon which pay discrimination was committed. The Labour Court found that the Commissioner determined the arbitration unfairly and he had made an award that was contrary to the case argued by the union.48

The Labour Court found that the Commissioner's approach was that it amounts to unfair discrimination for the appellant to pay a newly appointed employee who was previously employed by a labour broker at a lower rate than the rate paid to existing long-service employees, irrespective of how short the period of previous employment with the labour broker was. The lower rate of remuneration for newly appointed employees as contained in the collective agreement between FAWU and the appellant came about as a result of FAWU's persuading the appellant to reduce the extent to which it was using the services of various forms of precarious employees, including employees supplied by labour brokers. FAWU also proposed the implementation of a scale that showed the difference between employees who had newly started working and long-serving employees. The 80%

scale/rate was applied to all new employees from outside the company and it ceased to operate after two years of service. The Labour Court found that the differentiation complained of was not irrational, was not based on an arbitrary unlisted ground, and was not unfair. The appeal was thus upheld.49

3.1 The factors emerging from the South African case law

It is clear from the aforementioned analysis of the case law that the following factors have been regarded as fair and objective (neutral) for justifying pay differentials: (a) skills;50 (b) experience;51 (c) seniority;52 (d) length of service;53 (e) qualifications;54 (f) productivity;55 (g) responsibility;56 (h) collective bargaining (agreements);57 (i) absence of family responsibility;58 and (j) objective job evaluation methods.59

4 Grounds of Justification from the ILO

The Equal Remuneration Convention60 does not set out the defences/grounds of justification to equal pay claims, but states that differential rates between workers that are determined by an objective appraisal which is free from discrimination based on sex shall not be

considered to be contrary to the principle of equal pay for equal work or work of equal value.61 The Equal Remuneration Convention does not set out the defences/grounds of justification which may be raised in an equal remuneration claim, neither does the Equal Pay Guide62 set it out. What is clear from the ILO, however, is that the use of objective appraisals (job evaluation methods) or objective factors to determine the value of the work can (successfully) be raised as a defence to an equal pay claim, as it is not contrary to the principle of equal pay.

5 Equality Act of the United Kingdom

In the United Kingdom, a claimant may approach the employment tribunal with an equal pay claim.63 The tribunal must then determine whether there has been unequal pay in the particular case. An employer faced with a prima facie case of unequal pay may raise the genuine material factor defence. The employer has the onus of proving the defence on a balance of probabilities. The successful raising of the defence means that the difference in the terms and conditions of employment is due to a material factor which is not the difference of sex.64 Section 69 of the Equality Act65 sets out the genuine material factor defence in the following subsections as follows:

It is clear from subsection (1)(a) of section 69 that if the reason for treating A (the aggrieved employee) and B (the comparator) differently in relation to their terms of employment is not based on sex, then this is a complete defence to an equal pay claim. Subsection (1)(b) of section 69 permits discrimination in terms and conditions of employment based on sex if the reason for doing so constitutes a proportionate means of achieving a legitimate aim. At first blush this section seems to be counterproductive to what the EA seeks to achieve, but this is clarified in subsection (3) of section 69, which states that:

[f]or the purposes of subsection (1), the long-term objective of reducing inequality between men's and women's terms of work is always to be regarded as a legitimate aim.

Section 131(6)(a)-(b) of the EA provides that a job evaluation study that is not based on a system that discriminates on the ground of sex and that is reliable constitutes a defence to an equal pay claim. Item 42 of the Equal Pay Code67 states that:

[i]f a job evaluation study has assessed the woman's job as being of lower value than her male comparator's job, then an equal value claim will fail unless the Employment Tribunal has reasonable grounds for suspecting that the evaluation was tainted by discrimination or was in some other way unreliable.

5.1 Grounds of justification

It is clear from the above analysis of the EA that the following are regarded as defences to an equal pay claim:

(a) the genuine material factor defence68 and;

(b) a job evaluation study that is not based on a system that discriminates on the ground of sex and that is reliable.69

5.2 The case law

It should be noted that the case law decided under the repealed Equal Pay Act,70 which provided for the right to equal pay for work of equal value, and the defences thereto will be analysed below, in addition to the case law decided under the EA. These cases, whilst decided under repealed legislation, are instructive and provide an invaluable insight as to how the courts have (previously) dealt with the specific issues relating to equal pay claims and how they might (possibly) deal with these issues in future litigation. Case law decided under the repealed EPA cannot be disregarded as it forms part of the jurisprudence relating to equal pay claims. It should further be noted that the case law decided by the European Court of Justice and the Northern Ireland Court of Appeal will be referred to, but only to a limited extent. Reference to these cases under the analysis of the case law in the United Kingdom should not be surprising, as the tribunals and courts in the United Kingdom readily make reference to the decisions of these courts in their judgments.

5.2.1 Case law dealing with the grounds of justification to equal pay claims

In Secretary of State for Justice v Bowling71 the respondent was employed by the Prison Service, which fell under the appellant, as a service desk user support team customer service adviser. The respondent claimed in the Employment Tribunal that she was doing like work to that of her chosen male comparator, but was paid less than him. The male comparator held the same post as the respondent but started on a salary of £15, 567 as opposed to the respondent who started on £14, 762. The difference between the starting salaries was due to the comparator being appointed on spinal point 3 in terms of the appellant's salary scale and the respondent's being appointed on spinal point 1. The appellant argued that the reason for this difference was due to the fact that the comparator had more background and experience than the respondent. The Employment Tribunal accepted this explanation in respect of the difference in pay that had existed at the time of appointment. The Employment Tribunal, however, held that this explanation could not apply to the period where the respondent and the comparator had achieved the same appraisal rating, because at that stage the reason of skill and experience had ceased to be a material factor which could be relied on for paying different wages for like work. It

therefore allowed the respondent's claim in part.72 On appeal, the Employment Appeal Tribunal accepted the appellant's argument that "it is in the nature of an incremental scale that where an employee starts on the scale will impact on his pay, relative to his colleagues', in each subsequent year until they reach the top". The Employment Appeal Tribunal accepted that a differential was built into the pay of the respondent once the comparator had been appointed two points above the respondent in terms of the salary scale and if the original differential was free from sex discrimination then it follows that the differentials in later years too were free from sex discrimination. The appeal was consequently allowed.73 Where two employees doing like work are appointed on different levels of a salary scale due to skill and experience which is free from unfair discrimination, then the difference in pay in later years will not amount to unfair discrimination. This is only logical. If one employee is appointed on a higher scale than the other and both employees perform well, then the one employee will almost always receive higher wages than the other. It is

submitted that this case may apply mutatis mutandis to a claim of equal pay for work of equal value and is not confined to equal pay for like work only.

In Council of the City of Sunderland v Brennan74 female employees (caterers, cleaners, carers, school support staff) of the appellant claimed that their work was rated as equivalent or was of equal value to that of their male comparators (gardeners, road sweepers, drivers and refuse collectors) but they had not received bonus payments which had been received by their comparators. The appellant argued in the Employment Tribunal that the reason for non-payment was linked to productivity. The Tribunal held that "the bonus schemes enjoyed by the predominantly male groups "had long ceased to have anything to do with productivity." The appellant aggrieved by this finding unsuccessfully appealed the same to the Employment Appeal Tribunal. The England and Wales Court of Appeal held that the fact that the ultimate withdrawal of the bonus system had not impacted on productivity in the sense of its being decreased led to a "permissible inference that the bonus system had long since ceased to relate to productivity". The Appeal was accordingly dismissed.75 Pay differentials between the sexes cannot be justified in terms of a bonus system which has no bearing on productivity, which was the factor which it sought to reward. There must be a link between productivity and the bonus system.

In Redcar & Cleveland Borough Council v Bainbridge (No 2)76 the England and Wales Court of Appeal dealt with three consolidated appeals concerning questions of law relating to claims of equal pay and the scope of the defences. Only the law relating to the scope of collective agreements as a defence to equal pay claims will be considered. The Court of Appeal held that the fact that different jobs have been subject to separate collective bargaining processes can be a complete defence to an equal pay claim. It

qualified this, however, by stating that collective bargaining can be a defence only where the reason for the pay differential is the separate collective bargaining and not the difference of sex. It held that where separate bargaining has the effect that group of a particular sex (females) of similar proportions earns less than another group of a particular sex (males) of similar proportions, this could constitute a complete defence to an equal pay claim which is not sex-tainted. It further held that this would not apply where there is a marked difference between the two groups, because the difference would constitute evidence from which a Tribunal could infer that the process of the separate bargaining was tainted by sex unless the employer furnishes a different explanation. It concluded by stating that "the fact of separate collective bargaining would not, of itself, be likely to disprove the possibility of sex discrimination".77 Where separate collective bargaining is raised by the employer as a justification to pay differentials between the sexes, the employer has to show that it was not sex-tainted. This applies to a scenario where there is a marked difference in the sex of the groups because a Tribunal will be entitled to infer that the process was sex-tainted. It is further clear from this case that where the pay differentials apply to two different groups of similar proportions then there is no inference to be drawn that the process was or is sex tainted.

In Benveniste v University of Southampton78 the appellant had taken up employment with the respondent in 1981. It was common cause that the salary offered to the appellant was less than what she would have been offered had there been no financial constraints on the respondent in 1981. The appellant accepted the offer of employment on the understanding that she would be paid the salary that she would have been entitled to had there been no financial constraints on the respondent, once the constraints ceased to exist. The respondent's financial constraints came to an end in 1982. The respondent undertook to increase the appellant's salary slightly by means of pay increments but the appellant found this to be unsatisfactory. There were several correspondences between the appellant

and the respondent regarding her low salary as compared with that of her four male comparators. This resulted in the appellant being dismissed by the respondent. The appellant claimed equal pay for like work in the Industrial Tribunal. This claim was dismissed. The appellant then appealed to the Employment Appeal Tribunal, which appeal was also dismissed. The Court of Appeal held that once the financial constraints on the respondent came to an end in 1982, the reason for paying the appellant a lower salary disappeared. It further held that "… [it was] not persuaded that it can be right that the appellant should continue to be paid on a lower scale once the reason for payment at the lower scale has been removed". It reasoned that the material difference between the rate of pay between the appellant and that of her comparators had evaporated. It noted that there was no evidence to the effect that the respondent was under continuing financial constraints. The Court of Appeal allowed the appeal and remitted the case to the Industrial Tribunal for the determination of a suitable remedy.79 Financial constraints can justify pay differentials. This, however, is limited to the existence or continuation of the financial constraints. Once the financial constraints have ceased to exist then they lose their status as grounds to justify pay differentials. Where the financial constraints are of a continuing nature, then this can operate as a justification to pay differentials. The existence or continuation of the financial constraints must, however, be genuine.

In Fearnon v Smurfit Corrugated Cases Lurgan (Limited)80 the Northern Ireland Court of Appeal heard an appeal from the Industrial Tribunal by way of a stated case. The following question was posed in the stated case: "[w]as the tribunal correct in law to hold that the protection afforded by the material difference of red-circling81 is not time limited?" The Court of Appeal held that the length of time in respect of which pay differentials had endured due to red-circling is not irrelevant to the issue of whether it can continue to be a general material factor. It explained that in order for red-circling to qualify as a general material factor defence to pay differentials, the reason for its existence or continuation at the time the pay differential is being challenged is of cardinal importance and must be examined. It further held that "[i]t is wrong to assume that because it was right to institute the system,

that it will remain right to maintain it indefinitely". The Court of Appeal answered the above question in the negative and allowed the appeal.82 A defence to an equal pay claim cannot be valid in perpetuity without its validity being examined at the time when a claim of equal pay is made. It may be that the application is valid in perpetuity, but this must be proved at the stage when it is raised as a defence. Allowing the defence of red-circling to be valid in perpetuity because the reason for its initial implementation was justified would allow unscrupulous employers to rely on the defence even where the reason for the initial implementation of the red-circling had ceased to exist.83

In Rainey v Greater Glasgow Health Board84 the appellant female was employed by the respondent as a prosthetist. She claimed equal pay to that of her chosen male comparator, who was also employed by the respondent as a prosthetist. The respondent had offered the comparator a higher starting salary (£6,680) than that offered to the appellant (£4,733). The respondent alleged that the higher starting salary was to attract the

comparator to work for it. Unlike the comparator, the appellant was not offered employment whilst employed for a private company. The appellant's claim was dismissed by both the Industrial Tribunal and the Employment Appeal Tribunal. The main question before the House of Lords was whether the explanation furnished by the respondent for the pay differential constituted a general material factor defence which excluded the difference of sex. The House of Lords held that administrative efficiency could constitute a genuine material factor defence. It noted and agreed with the finding of the Industrial Tribunal that the new prosthetic service would not have been established timeously had it not been for the appointment of the comparator and others like him who were offered an amount of remuneration equal to that which they were receiving from the private company. It further held that the comparator was paid more because of the need of the respondent to attract him. It concluded that the respondent's explanation of the pay differential did amount to a genuine material factor defence. The appeal was accordingly dismissed.85 Where there is a need by the employer to attract an employee to its business for legitimate reasons (administrative efficiency), this will amount to a defence which would justify consequent pay differentials.

In Bilka-Kaufhaus GmbH v Weber von Hartz86 the European Court of Justice held that an employer may rely on objectively justified economic grounds for pay differentials. It further held that it is the task of the national court to determine whether the explanation furnished by the employer for the pay differentials constitutes objectively justified economic grounds. The Court noted that the measures adopted by the employer must be appropriate to achieving the economic objectives.87 This case makes it clear that an employer may rely on economic grounds as a justification to pay differentials. It is the duty of the national court to ascertain whether the economic grounds relied on are genuine and achieve the objectives sought.

In Wilson v Health & Safety Executive88 the England and Wales Court of Appeal was faced with the following questions relating to a service-related criterion which determined pay: "does the employer have to provide objective justification for the way he uses such a criterion, and, if so, in what circumstances?" The Court of Appeal noted that the use of service-related pay scales was common, and as a general rule an employer does not have to justify its decision to adopt them because the law acknowledges that experience allows an employee to produce better work. It held that an employer will have to justify the use of a service-related criterion in detail where the employee has furnished evidence which gives rise to serious doubts as to whether the use of the service-related criterion is appropriate to attain the criterion objective, which is the rendering of better work performance by employees with more years of service. In these circumstances an employer will have to justify the use of the service-related criterion by proving the general rule that an employee with experience produces better work and that this is evidenced in its workplace.89 The use of a service-related pay criterion is as a general rule legitimate and will be a complete defence to an equal pay claim. It is only when an employee furnishes evidence which casts serious doubt on whether the criterion is appropriate to attain the criterion objective, which is the rendering of better work performance by employees with more years of service, that an employer will be called upon to justify the criterion by disproving the doubt. An employee may therefore challenge a service-pay criterion on this limited ground only.

In Davies v McCartneys90 the appellant argued before the Employment Appeal Tribunal that the Industrial Tribunal committed an error by relying for its finding that the respondent had proved a material factor defence on factors which were also used in the assessment of the value of the work. The Employment Appeal Tribunal held that there is no limitation to the factors which an employer may rely on in proving a material factor defence. It stated that the important part of the defence was that it was based on a material factor which was genuine and not based on the difference of sex. It further held that:

[h]owever, it is our view that an employer should not be allowed simply to say, 'I value one demand factor so highly that I pay more', unless his true reason for doing so is one which is found by the Tribunal to be reasonable and genuine and not attributable to sex.91

An employer may rely on the factors for assessing the value of work as a defence to a pay differential. In this instance, the factors for assessing the value of the work are capable of justifying the pay differential for genuine reasons which are not sex-tainted.

5.2.2 Grounds of justification

It is clear from the above analysis of the case law that the following are regarded as defences/grounds of justification to an equal pay claim: (a) the comparator was employed on a higher salary scale due to skill and experience;92 (b) productivity is rewarded in terms of a bonus system;93 (c) collective bargaining;94 (d) financial constraints;95 e) red-circling;96 (f) administrative efficiency;97 (g) economic grounds (reasons);98 (h) service-pay criterion;99 and (i) factors used for assessing the value of work in an equal value claim.100

6 The Statutory Grounds of Justification in terms of the Employment Equity Act

The EEA refers to two grounds of justification to a claim of unfair discrimination, namely affirmative action and the inherent requirements of the job.101 It should be noted that neither ground of justification in the context of equal pay claims has come before the South African courts. It is thus apposite to analyse the grounds of justification in the context of equal pay claims. It is prudent to deal first with the authorities which have differing views regarding the suitability of affirmative action and the inherent requirements of the job to operate as grounds of justification to an equal pay claim. Thereafter, affirmative action and the inherent requirements of the job will be analysed in the context of equal pay claims in an attempt to ascertain whether or not they constitute suitable grounds of justification.

In Ntai the Labour Court, dealing with an equal pay claim, remarked obiter that the respondent had no legal duty to apply affirmative action measures and somehow increase the salaries of the applicants. The Labour Court further remarked that the application of an affirmative action measure was a defence which could be relied upon by an employer and does not constitute a right which an employee could utilise.102 It is clear from the obiter remarks made, that the Labour Court regarded affirmative action as a suitable defence to an equal pay claim.

Meintjes-Van der Walt has suggested that a pay differential in the context of pay discrimination should not be justified on the grounds of affirmative action as there are more constructive ways in which an affirmative action plan could be utilised to address past inequalities without implementing new differentials.103 The reason for the suggestion that affirmative action is not suitable as a ground of justification to an equal remuneration claim is based on the view that an affirmative action plan could be used more fruitfully elsewhere.

Landman has suggested that affirmative action is a suitable ground of justification to an equal pay claim. He has further suggested that when affirmative action is applied in the context of equal pay claims, it may be that designated employees are paid more than able-bodied white males, who are the only persons who do not belong to a designated group. Whether an employer may discriminate within the designated groups by applying

affirmative action measures is a vexed question. With regard to the inherent requirements of the job, Landman has suggested that the justification to equal pay claims on this ground is possible in theory.104

Du Toit et al have suggested that it is difficult to imagine circumstances where either affirmative action or the inherent requirements of the job could be applicable as grounds of justification to pay discrimination on a prohibited ground between employees performing work of equal value.105 Cohen has stated that neither the defence of affirmative action nor the inherent requirements of the job applies directly to pay discrimination.106 Pieterse has suggested that pay-equity legislation should include specific defences to pay-equity claims and that it would be beneficial if the legislation specified the interface between pay equity principles and affirmative action structures.107 Hlongwane has stated that the EEA does not expressly provide for defences to pay discrimination, and it is thus difficult to reconcile how either the defence of affirmative action or the inherent requirements of the job could justify pay discrimination committed on one of the grounds referred to in section 6(1) of the EEA.108

It is clear from the above that there are two views regarding the suitability and applicability of affirmative action and the inherent requirements of the job to equal pay claims. This results in legal uncertainty, which ultimately affects the equal pay legal framework negatively. An analysis is thus needed to determine the suitability and applicability of these grounds of justification to equal pay claims for the promotion of legal certainty. If one accepts that an equal pay claim is justiciable in terms of the EEA, then affirmative action and the inherent requirements of the job constitute the grounds of justification to an equal pay claim ex lege. A finding that neither constitutes a suitable ground of justification to an equal pay claim and that they should therefore not apply as such will of necessity have to be based on sound arguments and suggestions. Put differently, affirmative action and the inherent requirements of the job are grounds of justification to an equal pay claim until the contrary is proved.

6.1 Affirmative action

Section 9(2) of the Constitution109 provides that in order to promote the achievement of equality, legislative measures may be taken to protect or advance persons who were disadvantaged by unfair discrimination. The EEA gives effect to section 9(2) of the Constitution by regulating affirmative action in the workplace. In Minister of Finance v Van Heerden110 the Constitutional Court stated the following with regard to whether a measure falls within section 9(2) of the Constitution:

It seems to me that to determine whether a measure falls within section 9(2) the enquiry is threefold. The first yardstick relates to whether the measure targets persons or categories of persons who have been disadvantaged by unfair discrimination; the second is whether the measure is designed to protect or advance such persons or categories of persons; and the third requirement is whether the measure promotes the achievement of equality111

It is self-evident that if a measure does not pass the above enquiry then the measure is not one contemplated in section 9(2) and is not a remedial measure including an affirmative action measure.

Section 6(2)(a) of the EEA provides that the taking of affirmative action measures which are consistent with the purpose of the EEA is not unfair discrimination. The purpose of the EEA is to achieve equity in the workplace inter alia by implementing affirmative action measures to ensure that persons from the designated groups are equitably represented in all occupational categories and levels in the workforce.112 Section 15(2) of the EEA prescribes the affirmative action measures to be taken by designated employers.113 These measures are: (a) to identify and eliminate

employment barriers; (b) to diversify the workplace based on equal dignity and respect; (c) to reasonably accommodate people from designated groups in order to ensure that they enjoy equal opportunities; and (d) to ensure the equitable representation of suitably qualified people from the designated groups on all levels in the workforce.114

These measures must be reflected in the designated employers' employment equity plan.115 The measure mentioned in (d) above includes preferential treatment and numerical goals.116 The question which arises in the context of equal pay claims is whether the preferential treatment as contemplated in section 15(3) of the EEA includes paying suitably qualified persons from the designated groups more than their non-designated counterparts in the workforce in order to ensure equitable representation. On a literal reading of section 15(3) read with section 15(2)(d)(i) of the EEA, it would seem that it does. This reading is, however, not dispositive of the suitability of affirmative action as a ground of justification to equal pay claims, as it still has to be analysed in accordance with the purpose of the EEA and the matrix relating to equal pay claims. It should be noted that chapter 3 of the EEA, which deals extensively with affirmative action, does not apply to non-designated employers,117 but non-designated employers are nevertheless not exempt from the provisions of section 6(2)(a) of the EEA118 which lists affirmative action as one of the grounds of justification to an unfair discrimination claim. Therefore, a non-designated employer may raise the defence of affirmative action and by implication may take affirmative action measures within its workplace.119 The author will,

hereinafter, deal with affirmative action only as it relates to designated employers.120

It is apposite to note that affirmative action applies only to suitably qualified persons121 from the designated groups.122 The designated groups are defined as black people, women, and people with disabilities.123 As a corollary to the definition of designated groups it is clear that affirmative action may be relied upon as a ground of justification only in circumstances where the discrimination is based on race, sex, gender and/or disability. To this extent, the justification of affirmative action is of limited application. It then follows that affirmative action cannot be relied on as a ground of justification in circumstances where the discrimination is based on grounds other than, race, sex, gender and/or disability. With the aforementioned in mind, it is then prudent to analyse the suitability of this ground of justification in relation to equal pay claims.

In order to analyse affirmative action as a ground of justification to equal pay claims, the following question is postulated. Does paying an employee from a designated group a higher wage than his/her counterpart from a non-designated group in order to ensure the equitable representation of designated employees in all categories and levels of the workplace amount to an affirmative action measure? If it does, it would mean that it may be relied upon by an employer as a ground of justification to an equal pay claim based on race, sex and/or gender.

The EEA states that in order to determine whether a designated employer is implementing its employment equity plan in accordance with the EEA, one must have regard inter alia to the number of suitably qualified

employees from the designated groups from which the employer may promote or appoint.124 The EEA does not mention as an affirmative action measure the paying of a designated employee more than the employee's non-designated counterpart.125 It is submitted that the absence of mention of the higher pay as an affirmative action measure coupled with the reference to the promotion and appointment of designated employees is a strong indication that paying a designated employee more than the employee's non-designated counterparts does not fall within the ambit of an affirmative action measure. In Van Heerden the Constitutional Court stated with reference to the second requirement of the threefold enquiry, inter alia, that if the remedial measures display naked preference, are arbitrary or capricious, then they cannot amount to measures which are designed to achieve the constitutionally authorised end.126 It is further submitted, in the light of Van Heerden, that the paying of higher wages as an affirmative action measure would amount to naked preference, which would be arbitrary.

Dupper states that affirmative action is a temporary measure that should cease operating once it has achieved its goal (measures) and the duration of affirmative action programmes is intrinsically linked to the justification proffered for their existence. He further states that if the affirmative action measures continue to operate notwithstanding the achievement of the goals, then this will be regarded as discrimination.127 It is important to note that an employment equity plan cannot be shorter than 1 year or longer than

5 years.128 It is thus clear that an affirmative action measure cannot survive in perpetuity, as it will come to an end once the objective has been achieved.

The following further questions are postulated with reference to paying an employee from a designated group more than his/her counterpart from a non-designated group in order to ensure the equitable representation of designated employees in all categories and levels of the workplace. What will the lifespan of this measure be? Will the employer pay the employee from the designated group a higher salary than a non-designated employee in perpetuity? The answer to these questions will be set out in the form of an example.

For example, with regard to an affirmative action measure regarding appointments (or promotions) of designated persons, the employment equity plan refers to the target of 50% designated employees in all categories and levels of the workplace. Once the employer has reached the target of appointing (promoting) 50% of designated employees in its employ, then the target has been achieved and the affirmative action measure in that regard has come to an end. This means that the affirmative action measure can no longer apply, and if it does, this ultra vires application will be regarded as discrimination which will be unfair. It is difficult to postulate a similar example with the measure being paying a higher salary to designated employees as an affirmative action measure. The difficulty lies in determining the lifespan of the measure, and this results from the measure itself. It is submitted that paying higher wages should not be regarded as an affirmative action measure due to its impracticality and the creation of new pay differentials innate in its application.129 In Van Heerden the Constitutional Court stated with reference to the third requirement of the threefold test, inter alia, that a remedial measure must not impose substantial and undue harm or constitute an abuse of power on those who are excluded from its benefits, as this will threaten the country's long-term constitutional goal of equality.130 It is submitted that, based on this, the paying of higher wages should not be regarded as an affirmative action measure due to the potential substantial and undue harm that it would cause to those who are excluded from its benefits.

In the light of the above analysis, it is finally submitted that affirmative action is not a suitable ground of justification to equal pay claims.

6.2 Inherent requirements of the job

Inherent requirements of the job are not defined in the EEA but they have been given meaning by the Courts. Article 2 of the Discrimination Convention states that any distinction, exclusion, or preference in respect of a particular job based on its inherent requirements will not be deemed to be discrimination.131 The Discrimination Convention, however, does not provide a definition for the term "inherent requirements of the job". It is then necessary to analyse the meaning of this as developed by the case law.

In Whitehead v Woolworths (Pty) Ltd132 the Labour Court defined an inherent requirement of a job as referring to an indispensable attribute which must relate in an inescapable way to the performing of the job.133 In Woolworths (Pty) Ltd v Whitehead134 the Labour Appeal Court adopted a more flexible approach than the Labour Court by finding that rational and commercially understandable considerations constituted adequate justification to a claim of discrimination on the ground of pregnancy.135 In Ntai the Labour Court rejected mere commercial reasons as a justification and adopted a strict approach which is akin to business necessity.136 Du Toit et al suggest that a commercial rationale cannot by itself establish an inherent requirement of the job, and clear evidence regarding the nature of the requirement of the job should be led to place the court in a position to make a finding as to whether or not the employer's decision based on that requirement is reasonable.137

In Lagadien v University of Cape Town138 the Labour Court found that proven skills, experience and knowledge were indispensable requirements for the particular job and the refusal to appoint a person who lacked these qualities was permissible within the meaning of the inherent requirements

of the job as espoused in section 6(2)(b) of the EEA.139 Naidu has stated that inherent requirements of the job are requirements that cannot be removed from the job without radically changing the nature of the job, and a job that can be performed without imposing the requirements fails the test.140

Dupper and Garbers have stated that it can be inferred from the phrase "inherent requirement of a job" that "only essential job duties should be taken into account and that if the requirement is not met, the job cannot be done".141 Du Toit et al have suggested that the inherent requirements of the job should be analysed within the matrix of the following criteria: (i) they must be a permanent feature of the job; (ii) they must be essential to the job; and iii) they must be indispensable to the performance of the work.142

It is important to analyse the possibility of the ground of justification being applied to an equal pay claim by way of examples.

A and B perform equal work, but A is paid less than B and alleges that the pay discrimination is based on race as A is a black male and B is a white male. The employer will not be able to rely successfully on the inherent requirements of the job as a justification to the pay discrimination because A and B perform equal work, meaning that they both comply with the inherent requirements of the job. This example is based on the assumption that A proves the racial discrimination and the onus then shifts to the employer to justify the discrimination.

A and B perform work of equal value, but A is paid less than B and alleges that the pay discrimination is based on race as A is a black male and B is a white male. The employer will not be able to rely on the inherent requirements of the job as a justification to pay discrimination because different requirements are envisaged by the concept equal value and the requirements of the two jobs will of necessity be different but may be proven to be of equal value. This example is based on the assumption that A proves the racial discrimination and the onus then shifts to the employer to justify the discrimination.

In the light of the above analysis, it is submitted that the inherent requirements of the job is not a suitable ground of justification to equal pay claims.

7 Conclusion

It is clear from South African law that affirmative action and the inherent requirements of the job have not been used as grounds of justification to equal pay claims. The equal pay laws of the United Kingdom do not refer to affirmative action and the inherent requirements of the job as grounds justifying pay differentiation. It is important to note that the factors listed in the Employment Equity Regulations are more in line with the grounds of justification to equal pay claims as found in the case law of South Africa and the United Kingdom. This substantiates the argument that affirmative action and the inherent requirements of the job are not suitable as grounds of justification to equal pay claims.143 It will thus be important to mention that section 6(2) of the EEA does not apply to equal pay claims under section 6(4) of the EEA, as this will avoid unnecessary litigation regarding this aspect and it will at the same time promote legal certainty, which will strengthen the equal pay legal framework. This should be mentioned in the form of an amendment to section 6 of the EEA as follows: "The grounds of justification listed in section 6(2)(a)-(b) are not applicable to a claim under section 6(4)."144

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List of Abbreviations