Equal Pay in Terms of the Employment Equity Act: The Role of Seniority, Collective Agreements and Good Industrial Relations: Pioneer Foods (Pty) Ltd v Workers against Regression 2016 ZALCCT 14

Abstract

Equal pay for equal work and work of equal value is recognised as a human right in international law. South Africa has introduced a specific provision in the EEA in the form of section 6(4) which sets out the causes of action in respect of equal pay claims. The causes of action are: (a) equal pay for the same work; (b) equal pay for substantially the same work; and (c) equal pay for work of equal value. In addition to the introduction of section 6(4) to the EEA, the Minister of Labour has published the Employment Equity Regulations of 2014 and a Code of Good Practice on Equal Pay for work of Equal Value. This constitutes the equal pay legal framework in terms of the EEA.

The Regulations sets out the factors which should be used to evaluate whether two different jobs are of equal value. It further provides for the methodology which must be used to determine an equal pay dispute and it sets out factors which would justify a differentiation in pay. The Code provides practical guidance to both employers and employees regarding the application of the principle of equal pay for work of equal value in the workplace, inter alia.

Regulation 7 sets 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. If a difference in pay is based on any one or more of the above factors then it is not unfair discrimination if it is fair and rational. This is spelt out in regulation 7(1).

In Pioneer Foods (Pty) Ltd v Workers Against Regression 2016 ZALCCT 14 the seniority (length of service) factor was at the fore in the Labour Court. The Labour Court, on appeal, reversed an arbitration award 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.

Pioneer Foods is noteworthy as it is one of the first reported cases from the Labour Court dealing with the relatively new equal pay legal framework. It raises the following important equal pay issues: (a) is seniority a ground of discrimination or a ground justifying pay differentiation? And (b) what is the role of a collective agreement and good industrial relations when determining an equal pay claim? The purpose of this note is to critically analyse these issues and guidance will be sought from South African Law, Foreign law and relevant ILO materials in this regard.