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Employment Equity Act, 1998 (Act No. 55 of 1998)

Code of Good Practice

Equal Pay/Remuneration for Work of Equal Value

7. Factors Justifying Differentiation in Pay/Remuneration


7.1 Once jobs have been evaluated and/or graded, the various jobs are allocated pay/remuneration packages in accordance with the pay/remuneration philosophy of the employer and the value of the jobs. Employers are required to ensure that unfair discrimination does not occur at any of these stages.


7.2 Where employees perform work that is the same or substantially the same or is work of equal value, a difference in terms and conditions of employment, including pay/remuneration, is not unfair discrimination if the differentiation is not based on a listed or on any other arbitrary ground in terms of section 6(1) of the Employment Equity Act, as amended.


7.3 Regulation 7 of the Employment Equity regulations lists a number of grounds which are commonly taken into account in determining pay/remuneration. Subject to what is stated below, it is not unfair discrimination if the difference is fair and rational and is based on any one or a combination of the following factors—
7.3.1 the individuals' respective seniority or length of service;
7.3.2 the individuals' respective qualifications, ability, competence or potential above the minimum acceptable levels required for the performance of the job;
7.3.3 the individuals' respective performance, quantity or quality of work, provided that employees are equally subject to the employer's performance evaluation system, and that the performance evaluation system is consistently applied;
7.3.4 where an employee is demoted as a result of organisational restructuring or for any other legitimate reason without a reduction in pay/remuneration and fixing the employee's salary at this level until the pay/remuneration of employees in the same job category reaches this level;
7.3.5 where an individual is employed temporarily in a position for purposes of gaining experience or training and as a result receives different pay/remuneration or enjoys different terms and conditions of employment;
7.3.6 the existence of a shortage of relevant skill in a particular job classification; and
7.3.7 any other relevant factor that is not unfairly discriminatory in terms of Section 6(1) of the Act.


7.4 These factors may not be used to determine pay/remuneration in a manner that is biased or indirectly discriminates against an employee or group of employees based on a listed or on any other arbitrary ground in terms of section 6(1) of the Act.