With the introduction of legislation governing equal pay in the workplace, countless articles and publications have been circulated attempting to explain the legislation, and what is required of organisations in order to be compliant.
However, in spite of the plethora of information available, we still receive frequent, panicked phone calls from our clients asking for assistance and clarity. These queries have more than doubled in recent months with the understanding and expectation that the Department of Labour will soon be carrying out compliance audits on companies whose EEA 4 forms reflect questionable discrepancies in pay. With the consequences of non-compliance including fines and possible class actions, organisations are justified in being concerned.
“Are you ready to be Audited?”
Whether or not you are well into your journey towards equal pay compliance, or you are just beginning to investigate its ramifications, these thoughts aim to demystify the legislation and provide a practical “How to” guide, for you to ensure your organisation’s compliance.
Effective 1 August 2014, the Employment Equity Act was amended to include, amongst others, the following new provision:
“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), is unfair discrimination.”
The first key point to note in this section is that this legislation is not specifically focused on remuneration. Instead, it is much broader, and refers to any difference, which will therefore include not only remuneration, but other aspects, such as leave, working environment, working hours, etc.
Thus, it now becomes incumbent on organisations, and more specifically HR Professionals, to actively manage and ensure fairness and consistency in their employment practices.
“We at Axiomatic have developed a comprehensive process to identify areas of risk, as well as a means of implementing remedial action, in a cost effective and practical manner”
The first step in your journey is to conduct a comprehensive audit of your employment conditions. We have assisted many companies with such exercises and even in cases where an organisation has been thorough in their HR practices, this audit invariably highlights areas for improvement.
Once a list of inconsistencies has been produced, it is then necessary to work through them to determine which are defensible, and which require immediate attention. The question one needs to ask at this point is, are the jobs being compared indeed the same, substantially the same or of equal value? The only way to defensibly determine this, according to the Employment Equity Acts Code of Good Practice, is to ensure roles are correctly documented by way of job descriptions, and to apply an objective evaluation system.
To meet this need, Axiomatic offers AxioJob, an electronic Job Evaluation system based on our unique and innovative methodology of measuring roles. This electronic tool guarantees both objectivity and transparency when measuring roles, which allows HR professionals to conduct their own Job Evaluation exercise and thus not have to rely on expensive consultants. Alternatively, to maintain absolute objectivity, we are able to run the entire process for you.
Once the profiling and evaluation of all roles within the organisation is complete, it is then easier to determine if an organisation is in breach of the legislation. This is done by referencing the defensible grounds for differentiation which include:
- seniority and length of service;
- qualifications, ability, competence or potential;
- performance, quantity and/or quality of work (provided that employees are subject to the same performance evaluation system which is consistently applied);
- demotion due to operational requirements;
- temporary employment for purposes of gaining experience and/or training (internships, learnerships);
- shortage of relevant skill or the market value in a particular job classification; and
- any other relevant factor that is not discriminatory.
Provided an employer can prove one or more of the grounds listed above as reasons for differentiation, it will likely be identified as justifiable.
In cases where unjust differentiation exists, organisations will be required to implement a plan to bring about equality, to avoid facing penalties.
It is understood that the remedial action in cases of non-compliance will come at a cost to organisations, and as such, it is not expected that remedial action happens overnight. However, a clear plan must be documented detailing what actions will be taken and over what time period, which should typically be as quick as possible.
Axiomatic Consultants are particularly well versed and appropriately positioned to effectively address the compliance needs of organisations in terms of the legislation governing equal pay in the workplace.
Numerous organisations consequently engage us to develop clear plans specifying what actions will be taken, including time periods and measureable outcomes.