This article explores unequal pay and the legal complexities around a case of alleged unfair discrimination based on differences in remuneration between employees of the same employer performing the same or substantially the same work or work of equal value.
Introduction
A question that features quite often in the workplace is the question about what can be done when there are remuneration differences? To further expand on the question, what happens when an employee forms the view or is of the opinion that the difference in remuneration amounts to unfair discrimination? What does the employee have to prove to substantiate that such an allegation indeed constitutes unfair discrimination in terms of the Employment Equity Act 55 of 1998 (EEA)? The Labour Court (LC) in the matter of AMCU obo Members v Aberdare Cables (Pty) Ltd was called on to answer these questions where Aberdare Cables (Pty) Ltd (the “Company”) was alleged to have discriminated unfairly against its employees.
Background
In this matter, the Association of Mineworkers and Construction Union (AMCU), acting on behalf of its members, approached the Commission for Conciliation, Mediation and Arbitration (CCMA) in terms of the EEA alleging unfair discrimination. The discrimination was alleged to be on an arbitrary ground and the dispute arose from a differentiation in remuneration.
The Company had implemented a uniform four level gradings structure which stipulated minimum wages and hourly rates per each applicable level. This meant that all employees employed on a specific level received the same minimum wage, regardless of job their description. The nature, complexity, difficulty and, as such, the value of work performed increased with each level. Therefore, the wage associated with each level increased simultaneously as the level increased.
The Company began a retrenchment process in terms of section 189 and 189A of the Labour Relations Act 66 of 1995 (LRA), which resulted in the reduction of its workforce. The Company and AMCU agreed during these consultations, that all new employees would be engaged on the Metal and Engineering Industries Bargaining Council (MEIBC) rate of pay and they would rely on natural attrition to ensure that, over a period of time, all employees would eventually be engaged on the same rates of pay. An agreement to this effect was implemented from January 2014. As a result of this agreement, all those employees who were employed on or after 1 January 2014, earned the minimum wage rate. The employees who were employed prior to 1 January 2014, retained their higher rate of salaries.
At the CCMA, AMCU stated that the Company had two rates of pay for its employees, the MEIBC rate and the Company’s own rate, and that this has created a huge gap between the employees doing the same job in the same grade. Thus, AMCU’s case was premised 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.”
Briefly, the listed grounds in section 6(1) are 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.”
AMCU pleaded that the arbitrary ground upon which the differentiation in remuneration was based was solely that the Company had elected to apply a higher rate of remuneration than the minimum wage provided for in the collective agreement, but that this election was irrational and arbitrary. The Arbitrator found that AMCU had failed to prove that the difference in terms and conditions of employment between its members and other employees performing the same or substantially the same work of equal value, amounted to unfair discrimination and the matter was dismissed. AMCU took the matter on review to the Labour
Court.
In the Labour Court
The court stated that the EEA does not prohibit differentiation, it prohibits unfair discrimination on an arbitrary ground, in that it must cause an injury to human dignity. Thus, section 6(4) of the EEA does not impose a blanket prohibition on wage differentiation. It prohibits such differentiation where it is directly or indirectly based on any one or more of the listed grounds in section 6(1) referred to hereinabove.
Therefore, an Applicant must allege a specific ground of discrimination and must prove that the pleaded ground of discrimination is the basis for differentiation, and that it is unfair. There is a distinction to be drawn between differentiation and discrimination. Differentiation does not per se constitute discrimination on an arbitrary ground, which must be clearly identified and pleaded. Having found that AMCU failed to identify an arbitrary ground for discrimination, there could be no finding that AMCU had proven discrimination. In the absence of finding discrimination existed, there was no need to consider whether the discrimination was unfair.
Conclusion
Succinctly put, the court made it clear that the perceived arbitrary conduct on the part of the employer is not per se a ground of discrimination. An Applicant alleging unfair discrimination must be able to identify a specific ground on upon which its allegation is based. The Company’s conduct in paying different wages for the same or similar work, however unfair it might be perceived to be, is not unfair discrimination within the purview of section6(1) of the EEA. More than mere differentiation is required in terms of the EEA.
Key Takeaways
i. The EEA does not prohibit differentiation, it prohibits discrimination.
ii. More specifically, section 6(1) of the EEA does not prohibit differentiation or arbitrariness it prohibits unfair discrimination on an arbitrary ground.
iii. Arbitrary ground as provided in section 6(1) makes it clear that the irrationality of differentiation per se will not win discrimination cases based on an arbitrary ground. The conduct complained of must amount to unfair discrimination in that it must cause an injury to human dignity. Irrationality does not win a case, the irrationality of discrimination does.
iv. Differentiation per se does not constitute discrimination.
v. Discrimination on a specific ground of discrimination is presumed to constitute unfair discrimination, which presumption is rebuttable.
vi. It is not sufficient to simply allege differentiation or that the differentiation is arbitrary, or an employee’s dignity has been impaired.
vii. An Applicant must allege a specific ground of discrimination, must prove that the pleaded ground of discrimination is the basis for differentiation and that it is unfair.
by Ross Simon
© Maserumule Corporate Employment Law – August 2024
