Since the amendments to the Employment Equity Act took effect on 1 August 2014, an increasing number of disputes have been referred to the CCMA. These disputes are often about money.
In the 2016 matter of Pioneer Foods (Pty) Ltd v Workers Against Regression & others (2016) 37 ILJ 2872 (LC)(C 687-15) the union argued that Pioneer discriminated against their members who were “newer employees” by paying them less than those employees who had much longer service.
A complainant must prove differentiation on a listed or other arbitrary ground, and to establish pay discrimination in particular, a complainant must show that:
i. the work performed by the complainant is equal or of equal value to that of a more highly remunerated comparator; and
ii. such difference in pay is based on a prohibited ground of discrimination.
The complainant must identify the listed or unlisted arbitrary ground of discrimination relied upon, establish that that ground is an “other arbitrary ground”; and prove that that ground is the reason for the disparate treatment complained of.
The court per Steenkamp J, said the following:
• If there is a collective agreement in place stipulating different pay levels for employees with different lengths of service, such an agreement does not amount to arbitrary differentiation;
• Length of service (or being a new employee) does not constitute an unlisted ground in terms of s 6 (1) of the EEA;
• Differentiation in respect of terms and conditions of employment is rational and legitimate as envisaged by:
o Regulation 7 (1)(a) of the Employment Equity Regulations 2014 which includes “length of service” as one of the “factors justifying differentiation in terms and conditions of employment”;
o Section 198D(2)(a) of the LRA, which includes “length of service” as a “justifiable reason” for differential treatment; and
o Clause 7.3.1 of the Code of Good Practice on Equal Pay / Remuneration for Work of Equal Value.
The court made it very clear that if the party relying on the alleged unfair discrimination is not able to provide evidence of such unfair discrimination on the arbitrary grounds, or “any arbitrary ground” listed in s 6(1), there is no basis for a case of unfair discrimination.
THE IMPORTANCE OF THIS JUDGMENT
If the differentiation complained of is not irrational and is not based on an arbitrary, unlisted ground, it is not unfair. Therefore, the employer may pay employees who have longer service more than new employees.