Is Differences in Renumeration Discrimination?

Recently, in the matter of AMCU obo Members v Aberdare Cables [2023] ZALCPE 26, the Labour Court was tasked with a similar question and Judgment was handed down on 20 December 2023.  I thought it prudent to share this case with you since it is interesting to see what the Labour Court requires from an employee who complains of unfair discrimination due to differences in remuneration. 

AMCU was acting on behalf of its members and they approached the CCMA with the provisions of Section 10 (2) of the Employment Equity Act (EEA), with the contemplation of Section (4), read with Section (1) of the EEA. 

The CCMA issued an arbitration award on 19 December 2021 where the Arbitrator found that AMCU had failed to prove that the differences in terms and conditions of employment between its members and other employees performing the same or substantially the same work of equal value, amounted to unfair discrimination and the application was dismissed. 

AMCU filed a Notice of Appeal against the Arbitration Award. 

The matter was taken on review to the Labour Court and Judge Prinsloo was tasked to hear the matter and deliver Judgment.

1. In his Judgement, the Judge dealt with the general principles applicable to a claim for equal pay for equal work, where it is alleged to be unfair discrimination based on an arbitrary ground: 

• The EEA does not prohibit differentiation, it prohibits discrimination; 

• More specifically, Section 6 (1) of the EEA does not prohibit differentiation or arbitrariness it prohibits unfair discrimination on an “arbitrary ground”; 

• “Arbitrary ground” as provided in Section 6 (1) makes it clear that the irrationality of differentiation per se will not win a discrimination case based on an arbitrary ground. The conduct complained of must amount to unfair discrimination in that it must cause an injury to human dignity. Irrationality does not win a case, the irrationality of discrimination does. 

• Differentiation per se does not constitute discrimination. 

• Differentiation on a specific ground of discrimination is presumed to constitute unfair discrimination, which presumption is rebuttable. 

2. The test for whether discrimination is established, is that set inHarksen v Lane NO and others (Harksen)case, – if there is differentiation based on an unspecified ground, then whether or not there is discrimination will depend upon whether, objectively, the ground is based on attributes or characteristics which have the potential to impair the fundamental dignity of persons or to affect them adversely in a comparably serious manner. 

3. In short it is not sufficient to simply allege differentiation or that the differentiation is arbitrary or an employee’s dignity has been impaired. 

4. An applicant must allege a specific ground of discrimination, must prove that the pleaded ground of discrimination is the basis for differentiation and that is unfair. 

5. There is a distinction to be drawn between differentiation and discriminating and differentiation per se does not constitute discrimination on an arbitrary ground. 

6. The Harksen test applies in this case and AMCU had to plead an identifiable ground of arbitrary discrimination. 

7. Not every differentiation is discrimination and to qualify as such, the ground(s) for discrimination relied upon must, objectively, constitute a ground(s) based on attributes and characteristics which have the potential to impair the fundamental human dignity of persons as human beings or to affect them adversely in a comparably serious manner to a listed ground. The unequal treatment must be based on attributes and characteristics attaching to a person before it will fall within the meaning of ‘discrimination’. 

8. The difficulty in the AMCU case was that the arbitrary ground of discrimination was not identified or pleaded – it is not sufficient to allege differentiation or that the differentiation is arbitrary and that an employee’s dignity has been impaired – AMCU should have alleged a specific ground of discrimination. 

9. The further difficulty in AMCU’S case, was that AMCU called the employees during the arbitration process  – the employees did not give evidence to prove that the basis for them being paid less is because of discrimination by the employer based on a specific arbitrary ground of discrimination.  The employees testified about the fact that they have less spending power than the comparator employees, that they are unhappy about their level of earnings and that they feel that their dignity has suffered as a result of their lower level of earnings.  They further explained that they were adversely affected by the wage differentiation and how they feel prejudiced by that, but the reality is that an arbitrary ground for discrimination cannot be established by the existence of prejudice, or put differently, by the mere fact that an employee testifies that his or her dignity has suffered. The fact that an employee may profess to have suffered an insult to his or her dignity is not sufficient to establish discrimination, as outlined by the EEA – more is indeed required. 

10. AMCU’S case on appeal was that the arbitrator was wrong and erred in making the determination that the employers conduct was unfairly discriminatory against the employees. 

11. The crux of AMCU’S appeal was firstly the arbitrator’s failure to identify the correct legal test, that being the entirety of the test per Harksen and secondly her failure to apply the correct legal test to the question of whether the employers conduct constitutes unfair discrimination on an arbitrary ground in terms of the EEA. 

12. Judge Prinsloo held that the Harksen test applied and for AMCU to show that they pleaded in ground of arbitrary discrimination qualifies, they must show that the grounds they rely on constitute grounds based on attributes and characteristics which have the potential to impair their fundamental human dignity or to affect them aversely in a comparably serios manor listed ground. AMCU failed to do so.  AMCU cases was – there is differentiation, it impacts the employee’s dignity therefore it is unfair discrimination. AMCU did not identify the arbitrary ground of discrimination. 

13. Arbitrary conduct is not, per se a ground of discrimination – only conduct based on a ground of discrimination that is arbitrary is actionable and to be actionable, the ground must be analogist to a listed ground. 

14. The employers conduct in paying different wages for the same or similar work, however unfair it may be, is not unfair discrimination within the purview of Section 61 of the EEA. More than mere discrimination or unfairness is required in terms of the EEA. 

15. The appeal was therefore dismissed.

My opinion on the above case, which is a recent judgement, is that if an employee finds him or herself in a situation where there is differentiation on payment between themselves and other employees doing exactly the same work, is to firstly to ensure that the matter is taken up with the employer, in the event that there is a process to be allowed for that, and furthermore, should you elect to proceed to Court (with legal assistance), to ensure Harksen test is applied “if there is differentiation based on an unspecified ground, then whether or not there is discrimination will depend on whether, objectively, the ground is attributes or characteristics which have the potential to impair the fundamental dignity of persons as human beings or to affect them adversely in a comparably serious manner”. 

In my view, should an employee him or herself in the above situation, it is important to establish whether the differences in the numeration is based on a discrimination ground (as set out in the constitution – race, sexual orientation, religion and so forth) alternatively this is a differentiation that is rational (for example years of experience).  The mere fact that there is a difference in numeration does not automatically mean that such differences are discriminatory and will lead to unfair discrimination.

The content does not constitute legal advice, are not intended to be a substitute for legal advice and should not be relied upon as such. Kindly contact us on info@cklaw.co.za or 021 556 9864 to speak to one of our attorneys.