Draft Code of Good Practice on Equal Pay for Work of Equal ... storage/Documents/2014/Durban/Equal Pay... · –Job Evaluation • Is there a ... Establish a Social Ethics Committee

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28 October 2014

Presented by: Lionel van SchalkwijkPE Corporate Services SA (Pty) Ltd

Tel: 031 700 1597

Draft Code of Good Practice on Equal Pay for Work of

Equal Value

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Draft Code of Good Practice on Equal Pay for Work of Equal Value

Objective

Code seeks to promote remuneration equity in the workplace by providing practical guidance

on how to apply the principle of equal remuneration for work of equal value.

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ScopeThis Code is issued in terms of section 54 of the Employment Equity Act, 1998 and applies to all employers and employees.

The Code promotes the elimination of unfair discrimination in respect of remuneration by applying the principle of equal remuneration for work of equal value.

The term "remuneration" includes any payment in money or in kind, or both, made or owing to any person in return for working for another person, including the State. Remuneration includes• deferred remuneration, • commission, and • other forms of variable compensation or pay


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Eliminating Unfair Discrimination in respect of Remuneration

An employer must take steps to eliminate differences in terms and conditions of employment, including remuneration – emphasis on identifying differences based on historical reasons.

Three key considerations when considering remuneration equity

• Are the jobs that are being compared the same, substantially the same or of equal value ITO an objective assessment? – Job Evaluation

• Is there a difference in the terms and conditions of employment, including remuneration.

• If there are differences in the terms and conditions of employment, can these be justified on fair and rational grounds?


Differences are not unfair discrimination where the employees in question do not perform the same or similar work or work of equal value.

Establish a Social Ethics Committee – monitor compliance with Employment Equity

King III recommends that all employer entities establish a Remuneration Committee which should annually review all remuneration and benefits received by employees to ascertain whether they are appropriate and competitive.



Evaluating Jobs

In order to ascertain the value of the job for the purpose of applying

the principle of equal remuneration for work of equal value, an

objective assessment in accordance with relevant and appropriate

criteria must be undertaken. Such includes

• Use of a non - discriminatory Job Evaluation system (code

discusses criteria and factors of such systems)

• Sectoral determination ( more specifically for minimum wage

jobs)

• EEA - 6 Occupational Levels

Compare and Evaluate Male and Female dominated Jobs

Employment Equity Reporting

Paterson

BandOccupational Levels

F Top management

E Senior management

DProfessionally qualified and experienced

specialists and mid-management

C

Skilled technical and academically

qualified workers, junior management,

supervisors, foremen, and

superintendents

BSemi-skilled and discretionary decision

making

A Unskilled and defined decision making


Factors Justifying Differentiation in Remuneration

Once jobs have been graded, the various jobs are allocated remuneration packages in accordance with the 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.

Act lists valid reasons for differentiations

Summary of Job Evaluation Process

Job

Analysis

Job

DescriptionJob

Grading Job worth

Hierarchy

(Grade

Map)The process of examining and documenting the content of a job, breaking it down into tasks, functions, minor functions, work methods, processes, operations and elements.

Document the job analysis by writing job descriptions/profilesThe ranking of levels of jobs or job worth hierarchy using a job grading system

The final result of the job grading process.

Illustrates where each job fits relative to other jobs.

Scope of audit

Grade MapGrade Company ABC

17 Managing Director

GradeManufacturing Finance, Cost Planning,

Commercial, PurchasingHuman Resources

Assembly Production Control Logistics16

15 Snr GM Manufacturing Snr GM Finance Snr GM HR

14Snr Prod Manager IMV

Snr Prod Manager Corrola

13Logistics Manager

12

Production Mngr - Assembly GL Production Control GL- Cost PlanningCommercial Manager

Cost & Management Accountant

11

Group Leader ogistics Supplier Development HR Generalist

Group Leader tores Expenditure Accountant IR ManagerSenior Expeditor Revenue Accountant Training Manager

IT Projects

10

Supplier Quality Assurance Occupational Health NursePurchasing / Buyer

IT Administrator

9

Group Leader Expeditor Safety Officer

- Nys & Training

- Assembly

8

Jnr Group Leader Cost Analyst HR Officer

VAVE Training Officer

7

Logistics Clerk APDP Clerk CEO - PA

Payroll Administrator

6

Costing Clerk HR Administrator

Purchasing Clerk Safety Administrator

Local Creditors

Wage Clerk

Job Evaluation Process

Job

Analysis

Job

DescriptionJob

Grading Job worth

Hierarchy

(Grade

Map)

Company

Salary

Structure

Stage twoAfter the Job Worth Hierarchy is built, a Company Salary Structure is created and used as a framework for pay decisions

Click to edit Master title styleSalary scales

1 2 3 4 5 6 7 8Internal Equity (Stage 1)

Exte

rnal C

om

petitiveness (

Sta

ge 2

) A typical Grade overlap

is 10% to 30%

Linking Grades to Market Salary Structure

0

200 000

400 000

600 000

800 000

1 000 000

1 200 000

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

Sala

ry (

Gu

ara

nte

ed

Packag

e)

Ran

ds p

er

an

nu

m.

Paterson Grades

Comparison of ABC Individual Guaranteed Package Salaries (as at December 2013) against proposed Guaranteed Package Pay-Scales as at April 2014.

Minimum Midpoint Maximum Individual Salaries

A1 A2 A3 B1 B2 B3 B4 B5 C1 C2 C3 C4 C5 D1 D2 D3 D4 D5

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