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10/07/2017

Chris Haralambous Partner, Cox Yeats Attorneys – Pay Disparity In The Workplace does Not Necessarily Contravene The Law

Before employers get caught up in the hype surrounding “pay parity” issues, it must be understood that there are two very distinct pieces of amended legislation that have an impact on the so called “pay equity” developments in SA Employment Law.

a.) Firstly, Sections 198B (Fixed Term Contracts) and 198C (Part-Time Employment) of the LRA (as amended) seek to, on the whole, foster the equal treatment of both temporary (fixed-term) staff and part-time staff, in comparison with permanent staff. That in itself does not by any means translate into a blind legal obligation, imposed upon employers to actually pay temps / part-timers the same rate of pay as fulltimers (taking into account the justifications recognized by Section 198D of the LRA).

b.) Secondly, the amendment to Section 6 of the Employment Equity Act, as introduced by the Employment Equity Amendment Act of 2013 (which took effect on 1 August 2014) now simply expands the definition of “unfair discrimination” to include situations where differences in terms and conditions of employment are directly or indirectly the result of a listed or unlisted ground of (unfair discrimination).

A good example of how the concept of “pay parity” can be misunderstood, is reflected in a recent important decision of the Labour Court in Pioneer Foods (Pty) Ltd v Workers Against Regression (WAR) and Others (C687/15)[2016] ZALCCT14 (19 April 2016). In essence, the union’s (WAR) complaint before the CCMA (before it went on to the Labour Court) was that it was unfairly discriminatory for the employer (Pioneer Foods) to apply differential pay levels to staff who had less years of service, where they are performing work of a similar value to longerserving staff, despite such an arrangement forming part of a collective agreement, concluded with FAWU.

Significantly, the Labour Court pointed out that:
• A mere difference in pay levels does not amount to “discrimination”, but is merely a “differentiation”;
• It is only when a differentiation is triggered by a listed ground (for example, race) that discrimination is established, which is then presumed to be unfair;
• It is common practice for employers to apply different salary levels to staff with shorter service, which is not only recognised by law as a justifiable ground for the disparity, but also cannot amount to a form of discrimination, let alone unfair discrimination;
• For purposes of the Labour Relations Act, it is incorrect for the CCMA to have focused only on pay-level disparity, when the amendments to Section 198 refer to an assessment of whether certain categories of staff are treated “on the whole less favourably”;
• Not every “distinction, exclusion or preference” in the workplace is a form of discrimination, but simply amounts to “mere differentiation”, which is not something which is actionable by law.

In short, distinguishing conduct or differential treatment is a common facet of human relations, particularly in the workplace and unless the conduct complained of satisfies the requirements of what the law considers to be discrimination, there is nothing for employers to answer for.

CHRIS HARALAMBOUS is a Partner at Cox Yeats Attorneys and Head of the Labour Law Team. He can be contacted on 031-536 8500 or via email charalambous@coxyeats.co.za

 Chris Haralambous Pay Disparity.JPG
 Chris Haralambous Pay Disparity.pdf


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