Tensions in the workplace often arise from employees feeling unfairly discriminated against upon the realisation that they are unequally paid for work of equal value. Employers must protect employees’ rights and dignity, while employees should be well-informed about labour legislation to prevent unnecessary conflicts regarding the terms and conditions of employment.
In the recent Labour Court matter of AMCU obo Members v Aberdare Cables (Pty) Ltd (2024) 45 ILJ 511 (LC), the Court was required to determine whether the differentiation in remunerations paid to employees constituted an act of unfair discrimination based on an arbitrary ground as listed in Section 6 of the Employment Equity Act (EEA). In this matter, the employer had to implement retrenchment processes in 2013 to curtail its depreciating economic challenges, resulting in the workforce’s shrinkage. An agreement was reached with the majority union, NUMSA, that all new employees hired after this process would be paid according to the applicable MEIBC rates. Another union, AMCU, entered the workplace after this agreement, and it referred a dispute to the CCMA, alleging that the pay disparity for equal work constituted unfair discrimination.
Section 6(1) of the EEA reads as follows, “No person may unfairly discriminate, directly or indirectly, against an employee, in any employment policy or practice, on one or more grounds, including race, gender sex, pregnancy, marital status, family responsibility, ethnic or social origin, colour, sexual orientation, age, disability, religion, HIV status, conscience, belief, political opinion, culture, language and birth.” The matter was set down at the CCMA, where AMCU, representing its members, alleged that the employer had unfairly discriminated against its members by underpaying them.
AMCU claimed there was a significant pay gap between employees performing the same tasks. However, the Commissioner dismissed the case because paying different salaries for equal work of equal value was not caused by an act of discrimination. The Commissioner clarified that differences in terms and conditions of employment for AMCU members and other employees on the same grade did not constitute unfair discrimination.
AMCU brought a review application to challenge the CCMA’s decision, as the Union maintained that the pay disparities were an act of unfair discrimination. The Labour Court’s considerations were reliant on the provisions of Section 6(4) of the EEA, which provides that “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 Section 6(1), is unfair discrimination.”
In Harksen v Lane NO and Others 997 (11) BCLR 1489 (CC), the Court, in its interpretation and application of the equality clause found in the Constitution, developed a fundamental test to be used when there is an alleged act of unfair discrimination in the workplace. The first step of the test is to determine whether the differentiation is based on prohibited arbitrary grounds. The second step is to assess whether the discrimination amounts to unfair discrimination as per the provisions of the legislation. It is important to note that differentiation among employees does not automatically equate to unfair discrimination; a rational connection must be established between the measures taken and the specific purpose for the variance. In its judgment, the Labour Court reaffirmed that the EEA does not explicitly prohibit differentiation. Still, it does prohibit unfair discrimination based on arbitrary grounds that violate human dignity, which was not the case in this instance. In essence, AMCU had failed to establish an existing arbitrary ground, which was consequent to the unequal remunerations; thus, their unfair discrimination claims also failed to meet the requirements provisioned by the EEA.
Employers must strive to eliminate unfair discrimination by implementing measures to ensure an impartial workplace regarding pay differentials. Matters of discrimination must be solution-driven and collectively addressed by both the employer and the employees. In essence, this is a call for both employers to foster fairness and for employees to have a clear understanding of the legal framework governing their employment to prevent disputes over issues of pay disparities.
Article By Keotshepile Kodisang
Dispute Resolution Official at Consolidated Employers Organisation (CEO SA)