The Department of Labour’s Code of Good Practice on Equal Pay/Remuneration for Work of Equal Value provides practical guidance to employers and employees on how to apply the principle of equal pay/remuneration for work of equal value in their workplaces. The Code seeks to promote the implementation of pay/remuneration equity by eliminating unfair discrimination in any employment policy or practice on the basis of any one or combination of the listed or on any other arbitrary grounds.
The Code is issued in terms of the Employment Equity Act, 1998 (the EEA), which prohibits unfair discrimination in terms and conditions of employment, including pay/remuneration, of employees who perform the same or substantially the same work or work of equal value.
The EEA also requires designated employers to report on the pay/remuneration and benefits received by employees in each occupational level of their workforce, and to take steps to progressively reduce disproportionate income differentials or unfair discrimination.
Employers who fail to comply with the EEA and the Code may face legal consequences, such as complaints to the Commission for Conciliation, Mediation, and Arbitration (CCMA) or the Labour Court, fines, penalties, or orders to rectify their pay/remuneration policies and practices. In addition, employers who do business with the State may be required to obtain a certificate from the Minister of Labour confirming their compliance with the EEA and the Code, in terms of the pending section 53 of the EEA. Without such a certificate, employers may not be able to enter into contracts or obtain licenses, concessions, or authorisations from the State.
Furthermore, the Companies Amendment Bill, 2020, which is currently before Parliament, proposes to amend the Companies Act, by requiring greater governance around remuneration policies, practices, and committees. It will also require certain companies to disclose their highest and lowest-earning employee remuneration to be a catalyst for social partner debates.
Therefore, employers are advised to review their pay/remuneration policies and practices to ensure that they are consistent with the principle of equal pay/remuneration for work of equal value and that they can justify any differentiation on fair and rational grounds, as set out in the Code which includes:
seniority,
qualifications,
performance,
experience,
scarcity of skills,
or any other relevant factor that is not unfairly discriminatory.
Employers should also conduct regular audits to identify and address any inequalities or disparities in pay/remuneration and to monitor and report on their progress. By doing so, employers can avoid legal risks and promote a culture of diversity, equality, and inclusion in their workplaces.
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