Proposed introduction of legislation in the form of a Fair Remuneration Draft Bill: Department briefing

Meeting report

The Chairperson said that she, along with other Members, had received an e-mail from Mr Phathuxolo Maqavana about pay discrimination that she believed was important to consider. In the meeting, the Department would be given a chance to respond to Mr Maqavana’s proposal to dismantle pay discrimination, following which the Committee would engage the Department and would, in due course, announce what steps would be taken regarding the proposal. She reminded the Committee that any person in the Republic of South Africa had a right to submit a proposal to Parliament that they would engage with following the necessary processes, hence the importance of the meeting.

DEL's response on pay discrimination

Mr Thembinkosi Mkhaliphi, Chief Director: Labour Relations, Department of Employment and Labour (DEL), said the presentation would consider Mr Maqavana’s pay discrimination experience and proposal and respond accordingly, including going through the legal framework on equal pay. 

In November 2016, Mr Maqavana referred a dispute over unfair discrimination to the Commissioner for Conciliation, Mediation and Arbitration (CCMA) in which he alleged that he did not receive equal pay for work of equal value when compared with colleagues or former colleagues -- in particular, a white female, Ms Melles, who was also a merchandise controller (Case no. GAJB24760-16 MAQAVANA/MASSBUILD). An arbitration award was issued on 31 August 2017, dismissing the case on the basis that:
There was no evidence whatsoever of race playing a role (e.g., there were other merchandise controllers that were black males, one black male that earned more than Mr Maqavana, and one black male that earned less than he did.)
The respondent (Massbuild) had shown on the balance of probabilities that no discrimination had taken place.
Massbuild had shown a rational, legitimate, fair and/or genuine reason for the disparity, which was not discriminatory.

On 20 November 2017, Mr Maqavana made another referral of dispute to the CCMA for unfair discrimination in pay, based on an arbitrary ground (Case no. GAJB25304-17 MAQAVANA/MASSBUILD). Upon receipt of the referral, Massbuild raised a jurisdictional point of res judicata, which was enrolled for argument by the CCMA on 10 January 2018.

On 18 January 2018, the CCMA declined jurisdiction since the CCMA did not have jurisdiction to entertain the applicant’s dispute, as the same dispute had been arbitrated and the matter was accordingly res judicata.

On 6 March 2018, Mr Maqavana launched a review application with the Labour Court, mainly on the basis that the CCMA had misconstrued the nature and cause of action of the first dispute on equal pay for work of equal value based on race; misconstrued the nature and cause of action of the present dispute; applied incorrect test for res judicata; etc.

On 3 April 2019, the Labour Court ruled that the application for review was dismissed on the basis that:
A legal right that Mr Maqavana had was not being unfairly discriminated against. Listed grounds such as race or any arbitrary ground were enablers of unfairness and not a separate and distinct cause of action, and as such, the second dispute was the same as the first one; and
The ruling that the CCMA lacked jurisdiction was correct, and was being upheld by this Court.

Mr Maqavana alleged in his papers to this Committee that “this culminated in unsuccessful litigation up to and including the Constitutional Court of South Africa.” The DEL, however, had not found any Labour Court or Constitutional Court judgments on this matter. Mr Maqavana then decided to launch a Bill requesting Parliament to enact a law prohibiting the employment practice of requesting past pay slips prior to making an offer and level the ‘paying’ field through the promotion of pay transparency and objective job evaluation, as that would be key to dismantling systemic pay discrimination.

The DEL’s response highlighted that the Employment Equity Act (EEA), as amended in 2013, included specific provisions on eliminating unfair discriminatory employment policies and practices in terms and conditions of employment, including pay. In addition, the Code of Good Practice on Equal Pay/Remuneration for work of equal value provided practical guidelines and best practice to employers and employees on how to implement the principle of equal pay, encourage employers to utilise a job evaluation and/or grading system that was fair and transparent and did not have the effect of discriminating unfairly on any listed or arbitrary ground (i.e., paragraph 8.1.4 of the Code). Section 5 of the EEA was also explicit that employers had a legal obligation to take steps to promote equal opportunities by eliminating unfair discrimination in their workplace. This included ensuring that pay/remuneration policies and practices were applied consistently without unfair discrimination based on any combination of the listed or on any other arbitrary grounds.

Considering the above, if employers were using ‘past salary slips/salary history’ to perpetuate unfair pay discrimination contradictory to the existing equal pay laws – the legal recourse provided must be followed to address non-compliance.

Ms Ntsoaki Mamashela, Director: Employment Equity, DEL, went through the legal framework on equal pay, which included the following:
International Obligations (ILO Convention 100)
s9 of the Constitution Equality clause
Employment Equity Amendment Act 47 of 2013 ss 6(1), 6(4) & 6(5). 
EE Regulation – 3 (Eliminating unfair discrimination)
EE Regulation – 4 (Meaning of work of equal value)
EE Regulation – 5 (Methodology)
EE Regulation – 6 (Assessing whether work was of equal value)
EE Regulation – 7 (Factors justifying differentiation in terms and conditions of employment)
Code of Good Practice on Equal Pay (June 2015)

(Please refer to the presentation slides for the points of discussion above)

She compared and evaluated male and female-dominated jobs, factors justifying differentiation of pay/remuneration, and job evaluation processes to ensure equal pay/remuneration for work of equal value.

Mr Mkhaliphi concluded the presentation by stating that the proposed Bill benefited only employed persons and would not benefit the unemployed, as they were likely to accept any remuneration offered by a prospective employer. There were unintended negative consequences for the beneficiaries of the Bill when moving from one employer to another, as previous payslips may be necessary to negotiate remuneration with new employers. That also brought the enforceability of the Bill into question.

Discussion 
Mr M Bagraim (DA) said that the presentation was effectively a lecture on law, and he did not understand why the Committee needed to be taken through it. He prefaced his statement by saying that the EEA itself was bad legislation due to the unintended consequences that had already presented themselves. For example, South Africa faced an unemployment rate of almost 40%, and of those employed, 40% were not receiving the minimum wage. The feedback from the Department did not address the case presented by Mr Maqavana, which was to define arbitrary grounds and explain why the burden of proof lay with the employer to prove that unfair discrimination did not occur. Enforcing the Bill would require employers to reduce all salaries to the lowest level, which would be absurd.

Ms C Mkhonto (EFF) said that it was clear from the presentation that there was enough legislation to deal with the matter. However, the complainant had not been able to put forth facts that would prove his allegations due to the limitations of being an employee without full access to the necessary information in the company. How did the Department assist him in getting to the bottom of the matter, and what assistance did they typically provide in such cases? Were the black employees earning more than the white female employee doing the same job as she, and was she not being discriminated against based on her gender? 

Mr G Hendricks (Al Jama-ah) commended the Chairperson for putting the matter on the agenda of the meeting. Equal pay for work of equal value was as important as “one man, one vote”. There were problems with the Regulations and the Code of Good Practice, which Judge Steenkamp had unpacked in a Labour Court case with Pioneer Foods, where he had overturned a decision that was taken in the CCMA by Senior Commissioner Johnson, thereby showing the defects in the law. He asked the Department to look at the case and report back to the Committee with the anomalies found by Judge Steenkamp in the case, where two drivers were earning different wages. Reviewing the judgment would give the Committee guidance on what changes to make to the EEA, and the Regulations and Code of Good Practice. It was important for employers to verify what employees had been earning from previous payslips, but that should not affect the decision of pay parity. 

DEL’s response
Mr Mkhaliphi said that when there were allegations of discrimination by employees due to being paid differently to their colleagues, the onus was on the employer to prove that the discrimination was fair and reasonable. This was stated in the legislation, and had not been challenged in any court.
The courts had defined arbitrary grounds as anything that differentiated one person from another and was used to discriminate against them. It was discussed at the National Economic Development and Labour Council (NEDLAC) about whether to define it further. A consensus was reached that the definition was sufficient as it was.

Responding to Ms Mkhonto’s question about the Department providing support to complainants, he said that workplace discrimination matters were reported directly to the CCMA, and not to the Department. Therefore, it was not possible to offer support to complainants on their cases because they became aware of them only after the CCMA had heard and made rulings on the cases. 

All the merchandise controllers mentioned in the case did the same job. Discrimination, in and of itself, was not against the law, but it was a matter of whether the discrimination was fair or not. To determine whether the white female was being unfairly discriminated against, consideration would need to be given to the surrounding circumstances. For example, if the black male employees earned more than she had been in the company’s employ for a longer period, then the pay discrimination would be fair. Therefore, if she wanted to lay a case of unfair discrimination, she would need to show that, all other things being equal, she was being treated unfairly.

Mr Mkhaliphi asked Mr Hendricks for the specific case citation, as searching for it would be difficult. The Department would then look at the case from the perspective of the CCMA and the judgments in the Labour Court, and deliberate on the results.

The Chairperson concluded the meeting by saying that the [Committeeee] Secretariat would contact Mr Maqavana to submit his proposed amendment to the Committee, following which the relevant procedures would be undertaken. It was important to first hear from the Department due to the allegation that the matter had been taken to the Constitutional Court, so clarity on the case was required to ensure that the Committee did not get involved in a matter that another component of the state had already dealt with.

The meeting was adjourned.