Equal pay – Length of service

2022/09

By Nicolene Erasmus

Case law alert – September 2022

‘Length of service’ is not an arbitrary ground as contemplated in section 6(1) of the Employment Equity Act. Discrimination based thereupon does not amount to unfair discrimination. Premier FMCG (PTY) Ltd t/a Blue Ribbon Bakery v Food and Allied Workers Union obo Members and Others (C530/2019) [2022]

Case summary

Blue Ribbon appealed in terms of section 10(8) of the Employment Equity Act against a finding that its pay discrimination was based on an arbitrary ground and, therefore, amounted to unfair discrimination.

During arbitration, the Food and Allied Workers Union (FAWU) alleged on behalf of the employees that there were wage discrepancies between employees who performed the same or substantially the same work, or work of equal value. Blue Ribbon claimed that these discrepancies were justified on the basis that some employees were part of an incentive scheme known as the ‘mobility incentive process’, which meant having additional responsibilities and, therefore, receiving additional pay.

The arbitrator concluded that the jobs appeared to be substantially the same or of equal value, that there was a difference in the pay of these employees, and that Blue Ribbon could not explain or justify the differentiation in rates.

The Labour Court (LC) held, however, that when an applicant alleges that the ‘equal pay for work of equal value’ principle has been breached and that this amounts to unfair discrimination based on an arbitrary ground, the applicant must prove that the conduct complained of is not rational, amounts to discrimination, and that the discrimination is unfair.

Referring to the legal definition of ‘arbitrary’ as something that is ‘without reason given; capricious; whimsical; random or erratic’, the arbitrator concluded that the decisions made by the employer were indeed arbitrary and that the human dignity of the individual employees had been impaired. The arbitrary ground that the arbitrator relied on appeared to be ‘length of service’.

This ground, the LC held, cannot be likened to an attribute akin to an immutable human characteristic, sexual or social identity, cultural or organisational association, or deeply held moral, political or religious convictions. Furthermore, the Employment Equity Regulations specifically state that length of service is a fair basis for differential remuneration of individuals performing work of equal value.

The unfair discrimination claim was dismissed.

If you found this alert informative, you may also be interested in our Short course on implementing practical aspects of four key Employment Equity Act forms and the new amendments to the Act. This half day interactive online course is presented by Nerine Khan from ERX (Employment Relations Exchange) and aims to give practical advice on completing the forms associated with the Employment Equity Act, and an update on the soon-to-be-implemented amendments thereto. Click here for more information.

Nicolene Erasmus is a Director at Labour Guide.

This article does not constitute legal advice. For an informed opinion and/or assistance with a labour-related matter, you are encouraged to arrange a formal consultation with the author.

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