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SASLAW

SASLAW. Event Workshop on new Labour Law Bills. Proposed Amendments to the Employment Equity Act – January 2011 Presentation by: Shamima Gaibie. Prohibition of unfair discrimination. The proposed Amendment to section 6 of the EE Act (“EEA”) reads as follows:

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  1. SASLAW Event Workshop on new Labour Law Bills Proposed Amendments to the Employment Equity Act – January 2011 Presentation by: Shamima Gaibie

  2. Prohibition of unfair discrimination • The proposed Amendment to section 6of the EE Act(“EEA”) reads as follows: Section 6 of the principal Act is hereby amended by the addition of the following subsections: "(4) 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 is a form of unfair discrimination and is prohibited on any one, or more grounds of unfair discrimination listed in subsection (1).

  3. Prohibition of unfair discrimination (5) The Minister may, after consultation with the Commission, issue a code of good practice setting out the criteria and the methodology for assessing work of equal value in terms of subsection (4)." • Comment • Section 6 of the EEA, in its current form, prohibits unfair discrimination in any employment policy or practice, on any of the grounds listed in section 6(1) or on any analogous ground.

  4. Prohibition of unfair discrimination • The amendment seeks to clarify the application of the current anti-discrimination provisions to claims concerning unfair discrimination in respect of remunerations and other conditions of employment. This concept is referred to in other jurisdictions as the principle of equal pay. • At face value, the proposed new subsection 4 (“performing the same or substantially the same work or work of equal value”) suggests that the only criteria for determining whether one of two employees has been discriminated against – in this context - is at the point of the performance or delivery of the work rather than at the level of the individual’s qualifications, skills, expertise or experience.

  5. Prohibition of unfair discrimination • In the UK, the principle of equal pay is articulated in the Equal Pay Act and the terminology used by that Act is similar to the proposed amendment: ‘like work’, ‘work rated as equivalent’ or ‘work of equal value’. Like work • The principle of equal pay is an essential element of anti discrimination law in a society in which occupational segregation between races and genders exist. • However, the concept of ‘like’ or ‘same’ work or ‘work of equal value’ is extremely complex and a scan of case law in the UK reveals that the central issue in such litigation is the following: what are the factors that should be considered in determining whether 2 individuals perform the ‘same work ’, ‘substantially the same work’ or ‘work of equal value’.

  6. Prohibition of unfair discrimination • The importance of such factors can be demonstrated in the following example: suppose 2 bookkeepers working side by side doing, so far as actions are concerned almost identical work. However, on closer examination it becomes clear that one is a senior bookkeeper and another a junior bookkeeper. Such distinctions may be easy to spot in practice but difficult to distinguish in terms of what each of them does or in terms of the work they produce. Implicit in the performance of such work is the role of the senior bookkeeper as someone who is more qualified, more experienced and carries more responsibility. • In Shields v Coomes [1978] ICR 1159, Lord Denning adopted a holistic approach to a determination of such claims in the context of sex discrimination. He established the following test:

  7. Prohibition of unfair discrimination “When a woman claims equal pay with a man in the same employment, she has first to show that she is employed on ‘like work’ with him … her work and that of the men must be ‘of the same or a broadly similar nature’; Instances of the ‘same nature’ are men and women bank cashiers at the same counter, or men and women serving meals in the same restaurant; Instances of a ‘broadly similar nature’ are men and women shop assistants in different sections of the same department store; or a woman cook who prepares lunches for the directors, and the men chefs who cook breakfast, lunch and teas for the employees in the canteen;

  8. Prohibition of unfair discrimination Second, there must be an enquiry in to (i) the ‘differences … between the things that the woman does and the things that the men do, and (ii) a comparison of them so as to see ‘the nature and extent of the differences’ and ‘frequency or otherwise with which such differences occur in practice’ and (iii) a decision as to whether these differences are or are not ‘of practical importance in regard to terms and conditions of employment.’ • Lord Denning accepted that the concept of ‘like work’ must be dealt with holistically taking into account the parties qualifications, experience, skills, and responsibilities, and that any difference in jobs contended for by the employer must be ‘real and existing and of practical importance’.

  9. Prohibition of unfair discrimination • In cases of the ‘same’ or ‘substantially the same’ work in the more common job categories, the task of deciding whether the claimant has established her case (subject to the employer’s defence) may be a fairly straightforward exercise. Work of equal value • The concept of ‘work of equal value’, on the other hand, requires a consideration of the relative value of a woman’s job and that of her male comparator. In the UK, the question as to whether or not a claimant’s job is regarded as work of equal value to that of her comparator turns to a large extent on the reliability, criteria and method of evaluation undertaken or adopted by job evaluation experts. Such litigation is almost entirely dependent on expert evidence.

  10. Prohibition of unfair discrimination • In SA, and in order to ensure consistency between experts on the criteria and methodology of the evaluation of work performed by two individuals, it will be crucial for the minister to publish a Code setting out the criteria and methodology for assessing ‘work of equal value’. • Profs Bhorat & Benjamin quote the Canadian Human Rights Act on this point. That Act provides that: “In assessing the value of work performed by employees employed in the same establishment, the criterion to be applied is the composite of the skill, effort and responsibility required in the performance of the work and the conditions under which the work is performed”. Precisely how these factors will be assessed for the purposes of determining whether two jobs are of equal value is difficult to say.

  11. Prohibition of unfair discrimination The comparator – ‘employees of the same employer’ • The principle of equal pay raises other complex issues, such as, whether the claimant’s comparator must be based at the same workplace or can be chosen from the within the confines of the same employer but from other establishments (‘cross establishment comparisons’), or indeed whether the comparator can be chosen from within the confines of the same employer but in different industries (‘cross industry comparisons’) or indeed in the same industry but in different locations (‘cross location comparisons’). • It is clear from the proposed amendment that the comparator must be limited to someone who is employed by the same employer. Is this appropriate in the context of the following examples:

  12. Prohibition of unfair discrimination • employees of different employers who, though not associated companies, are all under the direct or indirect control of a third party and have common terms and conditions of employment? • employees of different companies who are subsidiaries of the same holding company, who operate in the same industry, and are governed by the same collective agreement? • It is clear from the aforegoing that the ‘work of equal value’ claim is not an easy one to bring. Having said that, the proposed subsection 4 is capable – at least in theory – of permitting challenge to that part of the gender or race pay gap which has resulted from occupational sex or race segregation. Its effect is however limited: it seeks to redress pay differentials, it does not seek to address the reversal of industrial and workplace segregation that has resulted in the employment of women and persons of colour in certain categories of work.

  13. Psychological testing and other similar assessments • The proposed Amendment to section 8of theEEA reads as follows: • Section 8 of the principal Act is hereby amended by the deletionof the word "and" at the end of paragraph (b), the insertion of the word "and" at the end of paragraph (c) and the addition of the following paragraph: • "(d) has been certified by the Health Professions Council of South Africa established in terms of the Health Professions Act, 1974 (Act No. 56 of 1974).".

  14. Psychological testing and other similar assessments • Comment • In its current form, the EEA prohibits “psychological and other similar assessments” of an employee unless the test or assessment has been scientifically shown to be valid and reliable; the test or assessment can be applied fairly to all employees; and the test or assessment is not biased against any employee or group. • Psychological or selection tests can potentially constitute both direct and indirect discrimination. For instance, direct discrimination could occur if the tests of members of certain groups were scored differently from those of other groups, or for instance where an employer decided not to employ a particular applicant because the test indicated a particular disability.

  15. Psychological testing and other similar assessments • Indirect discrimination could occur for instance where a test which purported to measure a neutral aspect or attribute which was more difficult for women to perform than for men. • Insofar as the actual psychological or psychometric test is concerned, a developer of a test in South Africa, or the importer of an international test, has to apply to the Health Professions Council of South Africa’s Professional Board of Psychology to have such tests classified and certified [1]. • The purpose of such application will presumably be to prove that the test in question is “reliable”, “valid” and “fair” and that it is appropriate for local conditions. [1] Marilyn Christiansen: “The testing of employees” (1999) contemporary Labour Law 11 at pages 14-15

  16. Psychological testing and other similar assessments • In addition, in terms of the Health Professions Act 56 of 1974, only qualified psychologists who are registered with the Health Professions Council of South Africa are entitled to use psychological and psychometric tests and to charge for such testing. • Accordingly, the proposed amendment to section 8 clarifies the issue of psychological (and other) testing in conformity with the Health Professions Act.

  17. Disputes concerning this chapter • The proposed Amendment to section 10of the EEA reads as follows: • Section 10 of the principal Act is hereby amended by the substitution in sub-section 6 for paragraphs (a) and (b) of the following paragraphs: “(a) any party to the dispute may refer [it]the dispute to the Labour Court for adjudication; or (b) an employee earning less than the amount prescribed by the Minister in terms of section 6(3) of the Basic Conditions of Employment Act may refer the dispute to the CCMA for arbitration.”

  18. Disputes concerning this chapter • Comment • The proposed amendment seeks to facilitate the ability of lower paid employees to bring discrimination claims in the CCMA rather than the Labour Court which is currently the case. This applies to employees who earn below the prescribed earnings set down in the BCEA. • This provision is commendable and will certainly enhance access to justice for employees. It will presumably result in a small decrease in the number of discrimination claims that are brought to the Labour Court.

  19. Burden of Proof • The proposed Amendment to section 11of theEEA reads as follows: The following section is hereby substituted for section 11 of the Principal Act: (1) If the employee makes out a prima facie case of unfair discrimination, the respondent must prove that- (a) the discrimination did not take place as alleged; or (b) the conduct is not based on one or more of the prohibited grounds listed in section 6(1).

  20. Burden of Proof (2) Discrimination is unfair, unless the respondent proves that the discrimination is fair, if the discrimination did take place- (a) on a prohibited ground listed in section 6(1); (b) on a ground not listed in section 6(1), and the discrimination- (i) causes or perpetuates systematic disadvantage in the workplace; (ii) undermines human dignity; or (iii) adversely affects the equal enjoyment of a person's right and freedom in a manner that is comparable to discrimination on a ground listed in section 6(1).

  21. Burden of Proof (3) For the purposes of this section, a respondent includes an employer of the employee or any other person contemplated in section 6(1).” • Comment: • The proposed amendment to section 11 not only deals with issues concerning “burden of proof”, it also attempts to establish a test for determining whether any employment policy or practice constitutes “unfair discrimination”. • In order to assess the proposed amendment, it is necessary to make a comparison with the Harksen test.

  22. Burden of Proof The Harksen test • The Harksen test involves three inquiries. It is the second inquiry that is often referred to as the ‘two stage analysis’. • The first inquiry is whether the impugned provision or conduct differentiates between people or categories of people. If it does so differentiate, it is necessary to enquire whether “there is a rational connection between the differentiation in question and the legitimate … purpose … it is designed to achieve”[2]. If there is no rational relationship, then the differentiation amounts to discrimination. However, if there is a rational relationship, it is still necessary to determine whether, despite such rationality, the differentiation nevertheless amounts to discrimination. [2] Harksen para 43

  23. Burden of Proof • The second inquiry, also known as the ‘fairness inquiry’ is whether the differentiation amounts to unfair discrimination. This process involves a two stage analysis: (1) The first stage: Does the “differentiation” amount to discrimination? and (2) The second stage: If so, does it amount to “unfair discrimination”?

  24. Burden of Proof • The first stage • If the “differentiation” is on the basis of one or more of the specified grounds, then the “differentiation” constitutes discrimination. If the “differentiation” is not on a specified ground, then “whether or not there is discrimination will depend on whether, objectively, the ground is 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” [3]. [3] Harksen para 54

  25. Burden of Proof • The second stage • If the “differentiation” amounts to “discrimination”, does it in fact amount to “unfair discrimination”? If the discrimination is on a specified ground, then it is presumed to be unfair. If the discrimination is on an unspecified ground, then the onus is on the complainant to establish the “unfairness”. In order to determine the “unfairness”, if any, of discrimination on an unspecified ground, various factors must be considered, including: • the position of the complainants in society and whether they have suffered historically from patterns of disadvantage;

  26. Burden of Proof • the nature of the provision or power and the purpose sought to be achieved by it; • any other relevant factors including the extent to which the provision or conduct has limited the rights of the complainants or whether it has impaired their fundamental human dignity or constitutes impairment of a comparably serious manner.[4] • The third and final leg of the inquiry essentially involves the justification inquiry which will not be dealt with here. Suffice to say that this provision is not the subject of any proposed amendment. [4] Harksen para 52

  27. Burden of Proof The onus in terms of the proposed amendment • In terms of section 11 of the Act, an applicant is required to ‘allege’ unfair discrimination, and thereafter the onus shifts to the employer for the purposes of establishing that the discrimination is fair. Section 11 does not distinguish between discrimination on a specified or unspecified ground for the purposes of onus. • In contrast, the Harksen test makes that distinction: • if the differentiation is based on one of the specified grounds, not only will discrimination have been established, but the unfairness thereof will be presumed. It is here that the Harksen test requires the complainant to establish a prima facie case of discrimination before the presumption is triggered;

  28. Burden of Proof • if the differentiation is on an unspecified ground, it is left to the complainant to establish that the differentiation amounts to discrimination, and to prove the ‘unfairness’ thereof (taking into account the factors listed above). • In contrast, the proposed amendment to section 11 seems to require the complainant to establish a ‘prima facie’ case (rather than a mere allegation) of unfair discrimination in respect of discrimination on a specified or unspecified ground. Thereafter the onus shifts to the respondent.

  29. Burden of Proof When does the onus shift and, how strong must the link be between the differentiation and the discrimination before the shift occurs ? • Case law [5]suggests that a mere allegation of discrimination is not enough to shift the onus. What is required is some link between the conduct (discrimination) and an unacceptable ground (specified or unspecified) of discrimination. Precisely how strong this link must be is unclear. What one must bear in mind however, is that the concept of a shifting onus is an immensely difficult issue to determine, but it is a concept that is necessary for the purposes of discrimination law precisely because: [5] TGWU v Bayete Security Holdings (1999) 20 ILJ 1117 (LC); Louw v Golden Arrow Bus Services (Pty) Ltd 2000 (21) ILJ 188 (LC)

  30. Burden of Proof • It is the employer’s conduct that is the subject of the judicial scrutiny; • Only the employer knows the real reason for its conduct; • It would be unfair to expect the complainant (who is an employee) to establish the reason for the discrimination even though this aspect arguably constitutes a necessary part of the prima facie case.

  31. Burden of Proof What is the difference between Harksen and the proposed amendment in respect of onus • The proposed amendment: • accepts the onus in respect of discrimination on a specified ground; • establishes a less onerous onus in respect of discrimination on an unspecified ground. • Does the ‘fairness inquiry’ in the proposed amendment model that of the Harksen test? • A comparison of the Harksen test and that indicated in the proposed amendment is more easily demonstrated in the following table:

  32. Burden of Proof

  33. Burden of Proof • The only difference of substance is that the proposed amendment seeks to make discrimination unfair in the event that it “causes or perpetuates systematic disadvantage in the workplace”. The requirement that a complainant must, for the purposes of an unfair discrimination claim, establish that the employer’s policy or practice necessarily results in “systematic disadvantage”, is a requirement that not only goes beyond that required by the Harksen test, but it is a requirement that is extremely onerous and will be difficult to meet precisely because it suggests something more profound than a once off act of discrimination. • It is unfortunate the proposed amendment does not mirror the requirements set out in the Harksen test, for the purposes of consistency.

  34. Range of Measures to tighten compliance with Employment Equity or Affirmative Action measures • The proposed Amendment to section 20of the Act allows the Director-General to apply to the Labour Court to impose a fine on a designated employer who fails to prepare and implement an Employment Equity Plan. Under the current provisions of the EEA, the Labour Court may impose fines that are set out in Schedule 1 to the Act. The fines are in the form of a graduated increase based on the principal of progressive contravention. The fines range from R500.000,00 to R900.000,00. • The proposed Bill also repeals Schedule 1 and replaces it with a new schedule which increases penalties dramatically for any contraventions of the Act by linking penalties to the annual turn-over of the employer. The Bill provides that fines will range from 2% to 10% of the employer’s turn-over, an approach that follows the penalty structure of the Competition Commission.

  35. Range of Measures to tighten compliance with Employment Equity or Affirmative Action measures • The proposed Amendment to section 21 of the Act increases the frequency of the reporting obligations by designated employers (the distinction between employers that employ fewer than 150 employees and those that employ more than that number has been deleted) and in the absence of an employer’s explanation for any inability to comply with the reporting obligations, the Director-General may apply to the Labour Court to impose a fine contemplated in the proposed new Schedule 1 of the Act.

  36. Income Differentials • The proposed Amendment to section 27(2) of the EEA reads as follows: “(2) Where disproportionate income differentials or unfair discrimination in terms and conditions of employment as contemplated by section 6(4) are reflected in the statement contemplated in subsection (1), a designated employer must take measures to progressively reduce such differentials subject to guidance as may be given by the Minister as contemplated in subsection (4).”

  37. Income Differentials • Comment: • There is conceptual contradiction between section 6 of the Act and that contained in the proposed amendment to section 27(2). The first prohibits discrimination in any form. The second suggests that unfair discrimination in the terms and conditions of employment may be dealt with by an employer in its Employment Equity Plan with a view to progressively reducing such differentials.

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