In a recent judgment the Labour Court dismissed the claim by five black employees that Makro had unfairly discriminated against them by paying a white female, who performed the same or substantially the same work, more. The Court held that it is not enough to merely allege that the comparator earned more because of race. Something more is required to prove discrimination.

By Nicolene Erasmus (Director, Labour Guide)

2023/03

Even before 1 August 2014, when the Employment Equity Amendment Act No 47 of 2013 (EEAA) was promulgated into law, employees had “known” that it would be unfair NOT to pay employees who perform the “same” jobs the “same” salaries. Unfortunately, equal pay is an area of labour law that is complex and not easily understood, and this blanket statement – employees who perform the same jobs should be paid the same salaries – had often led to, in many instances, unfounded allegations of unfair labour practices and unfair discrimination. Regulation 6 provides guidance in respect of Section 6(4) of the Employment Equity Act (EEA), which states 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 Subsection (1) or on any other arbitrary ground is unfair discrimination”.

In terms of Regulation 6, in assessing whether work is in fact of equal value, one needs to consider the following criteria:

• The responsibility demanded of the work, including responsibility for people, finances and material;
• The skills, qualifications, including prior learning, and experience required to perform the work, whether formal or informal;
• Physical, mental and emotional effort required to perform the work;
• To the extent that it is relevant, the conditions under which work is performed, including physical environment, psychological conditions, time when and geographic location where the work is performed.

Regulation 7 states that if there is a difference in the terms and conditions of employment, including remuneration, it is not unfair discrimination if the difference is fair and rational, and is based on any one or a combination of the following grounds:

• The individuals’ seniority or length of service;
• The individuals’ qualifications, ability, competence or potential above the minimum acceptable levels required for the performance of the job;
• The individuals’ performance, quantity or quality of work, provided that employees are equally subject to the employer’s performance evaluation system, that the performance evaluation system is consistently applied;
• Where an employee is demoted as a result of organisational restructuring or for any other legitimate reason without a reduction in pay and fixing the employee’s salary at this level until the remuneration of employees in the same job category reaches this level;
• Where an individual is employed temporarily in a position for purposes of gaining experience or training and, as a result, receives different remuneration or enjoys different terms and conditions of employment;
• The existence of a shortage of relevant skill, or the market value in a particular job classification; and
• Any other relevant factor that is not unfairly discriminatory in terms of Section 6(1) of the Act.

When, in SACCAWU obo Mabaso and Others v Masstores (Pty) Ltd t/a Makro (JS 618/19) [2023], the black applicants found the payslip of a white woman on a printer, they suspected that the employer unfairly discriminated against them. They were performing the same or substantially the same work, yet she was paid more.

The respondent denied that the differentiation in salaries was due to race. Historically, the recruitment process at the respondent included considering a candidate’s employment history as well as the salary that the candidate was earning at the time. In order to make the offer attractive, the employer would increase the candidate’s existing salary with a maximum of 15%. In 2018, the respondent introduced salary bands for all positions within the organisation, including the merchandise controller position. Subsequent to the introduction of salary bands, the respondent adjusted the salaries of employees, including the applicants, to ensure that remuneration was at least at the middle level of the respective salary band.

This was not disputed by the applicants. Their response was that this was the first time that the respondent had explained this to them, which was not true. Furthermore, the evidence suggested that there were two black employees who earned more than the white comparator. The court found the applicants’ explanation of these employees’ longer service being the reason for their higher salaries to be irrelevant. The fact of the matter, explained the court, was that there were two black employees who earned more than the comparator and if there was no dispute on the process followed by the respondent prior to 2018, that marks the end of the enquiry as the process, and not race, is the reason for the disparity.

The conclusion reached by the court was that it is not enough for the applicants to merely allege that the comparator earned more because of race. Something more is required to prove unfair discrimination. The unequal treatment must be based on attributes and characteristics attaching to a person before it can fall within the meaning of “discrimination”. The applicants failed to establish discrimination on grounds of race, whereas the respondent could prove that the applicants were remunerated in terms of the relevant legal prescripts, which justified their comparators’ higher salary. The applicants’ claim was dismissed.

Referring to the court’s conclusion that “something more is required to prove discrimination”, it needs to be pointed out that in terms of Section 11(1) of the EEA, “if unfair discrimination is alleged on a ground listed in Section 6(1), the employer against who the allegation is made must provide, on a balance of probabilities, that such discrimination (a) did not take place as alleged; or (b) is rational and not unfair or is otherwise justifiable”.

In Sasol Chemical Operations (Pty) Ltd v CCMA and Others (J2680/16) [2018] ZALCJHB 433 the following question was raised: Is a bare contention by an employee that he has been racially discriminated against – without more – sufficient to constitute an allegation of racial discrimination, as contemplated in Section 11, and thus trigger the employer’s onus to establish a defence in terms of Subsections (a) or (b), or is there an evidentiary burden on the employee to at least put up a prima facie case of discrimination? The answer is to be found in the following statement: During re-examination it became apparent that the employee failed to present “evidence which is sufficient to raise a credible possibility” that unfair discrimination based on race had taken place. The commissioner’s finding to the contrary is based on the wrong premise and is not connected to the evidence before him, the Labour Court held.

Similarly, in Mkhatshwa v Shanduka Coal (Pty) Ltd (2022) 43 ILJ 2524 (LC), the Labour Court stated that a bald claim that a distinction in remuneration constitutes unfair discrimination is inadequate for the onus to shift to the employer to prove that the discrimination was fair. The black mine manager of a decommissioned mine was of the opinion that he was discriminated against as a mine manager as his two white counterparts were paid a higher rate.

The Court referred to South African Municipal Workers Union and another v Nelson Mandela Bay Municipality, where it was held that: “What remains for the employee to demonstrate is that there is a causal nexus between the differentiation on the basis of her gender or sex and the treatment accorded to her in respect of the grading of her post and the concomitant remuneration. In other words, that being female was a sine qua non for the less remuneration she earned …”

The applicant, Mr Mkhatshwa, failed to demonstrate that his race was a sine qua non for being paid less than his white comparators. Since it was the respondent’s undisputed evidence that it was not race, but the actual functions and responsibilities of the positions they occupied, that played a role in the pay distinction between the applicant and his comparators, the Court held that the applicant failed to make a case to sustain a claim of unfair pay discrimination.

This article does not constitute legal advice and is based on the author’s interpretation of legislation and relevant case law. For an informed opinion and/or assistance with a labour-related matter, readers are encouraged to arrange a formal consultation with the author.

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