Factors Justifying Differentiation In Pay/Remuneration

As an employer, determining fair remuneration for your employees is an essential part of maintaining a positive workplace culture. Moreover, unfair discrepancies in pay could lead to legal trouble.

In South Africa, the principle of equal pay for equal work generally applies, which helps to ensure fairness in determining employee value.

However, sometimes differences in pay among your employees are necessary. How can you ensure that those differences are not unfairly discriminatory?

What Does The Law Say?

Section 7 of the Draft Code of Good Practice on Equal Pay for Work of Equal Value,

Published by the Department of Labour in 2014, lays out several factors that should be taken into account when determining pay or remuneration.

When applied correctly, discrimination in pay based on these grounds is not considered to be unfair. These factors include seniority or length of service, qualifications, aptitude, competence, potential, performance, the quantity of work, and quality of work ‒ provided that all employees are treated equally and fairly in the appraisal process.

The temporary employment of an individual for the purpose of acquiring training or experience is another aspect that should be taken into account.

If an employee is demoted as a consequence of company restructuring or for any other justifiable cause without a pay cut, fixing their income at a specific point until the earnings of workers in the same job category equalise, it is also not regarded as unfair discrimination.

Also, when determining levels of payment, it is necessary to factor in any potential shortage of pertinent skills relating to a position.

Any differences in pay must be fair and rational and should be based on one or more of the factors listed in the Act. This will help protect employees from unfair discrimination based on factors such as race, gender or age.

Evaluating Jobs Fairly

Attempting to ensure equal pay for equal work, while applying the rules of Section 7, can only be done appropriately where the job has been appraised fairly.

Section 5.3 of the Draft Code of Good Practice on Equal Pay for Work of Equal Value lays out several criteria that need to be applied when determining the value of a particular job.

The first consideration is the level of responsibility that the job entails, such as being responsible for personnel, finances and stock. Also important to consider is the level of formal and informal skills and formal qualifications that are needed in order to do the job.

The physical, mental and emotional demands of the job in question must also be given due consideration, as well as the conditions under which the work is performed, including physical and psychological conditions. Even geographic location can play a part in determining pay.