“A reading of s 12B of the Labour Act and s 175 of the Companies Act shows that the provisions are inconsistent as they are mutually exclusive. Section 175 of the Companies Act seeks to limit the dismissal of a director in accordance with the procedure set out in that section i.e., by special resolution....
“The learned judge of appeal found that there was no legitimate expectation on the part of an employee to be paid more than what he is supposed to be paid simply because other employees may be receiving greater, seemingly unjustified benefits”. Introduction This case illustrates a common challenge in the process of managing pay equity....
“Applied to the circumstances of this case, it is evident that even if this court were to find that the respondent had a legitimate expectation of his contract being renewed, his claim would fall on the basis that the second requirement was not met.” Introduction Disputes involving the doctrine of legitimate expectation of contract renewal...
“The evidence as a whole in my view leads to one logical conclusion; that the appellant was well aware of what it was doing when it entered into the contracts and the legal consequences thereof. This appeal is, therefore, nothing more than an attempt to depart from a valid and legally binding agreement. Courts frown...
“In my view, the rights of the respondent are embodied in the contract which he signed. He cannot look outside the contract to add to its terms. The act of generosity by the appellant in awarding him an increase in his allowance cannot by any stretch of imagination be deemed to be an acknowledgement that...
“Quite clearly the respondents were transferred, with the undertaking, to another employer. Their employment was not terminated. In terms of the contract and also by operation of s 16 of the Act, the respondents were transferred to Rutimba on terms not less favourable than they enjoyed in the employ of the appellant. At the very...
“The learned judge of appeal found that there was no legitimate expectation on the part of an employee to be paid more than what he is supposed to be paid simply because other employees may be receiving greater, seemingly unjustified benefits”.
This case illustrates a common challenge in the process of managing pay equity. The common perception among employees is that if they are in the same grade, they should all get the same pay. This is not correct. The Supreme Court, in Thokozile Zinonda v Cafca Limited SC 64 -17, looked at the authorities that deal with this issue and concluded that employees in the same grade may get different salaries for as long as this does not violate any Collective Bargaining Agreement (CBA).
The matter before the Supreme Court was an application for leave to appeal to it against a decision that was made by the Labour Court. We will not go into what led to this application as this is irrelevant for the purposes of this discussion. What is important to note is that:
- The employee was in grade C1 which was later upgraded to C3.
- She reached her retirement age and was given a new contract.
- She then came across a schedule of the employer’s pay schedule only to notice that she was the least paid in grade C3.
- Believing this to be a mistake she approached management hoping that the salary will be reviewed upwards. This did not happen.
- She took the legal route.
- There were legal procedure non-compliance issues that then resulted in the current application.
- We will focus on the set of facts outlined above and assess how the court concluded that she was not entitled to more salary.
In an application of this nature, the court is required to assess whether there are any prospects of success on the part of the applicant. The court was therefore invited to assess whether the fact that the applicant had a lower salary than those who were in the same grade as herself was an unfair labour practice.
The Supreme Court noted that an employee receiving a salary in terms of a CBA cannot raise a claim for unfair labour practice even when other employees in the same grade are earning more. This position was explained as follows:
“It should be noted that CBAs stipulate minimum wages for any particular grade. An employer is only guilty of an unfair labour practice if he fails to pay the minimum salaries for a particular grade provided therein. It follows therefore that employees may receive different salaries despite being in the same grade. The actual amount of the salary depends on the employee’s negotiations with the employer in forming the employment contract”.
The court also looked at the principles of the law of contract which give reference to freedom of contract. It considered the South African Constitutional Court case which dealt with this freedom and said:
In Barkhuizen v Napier 2007 (5) SA 323 (CC), at page 57, the Constitutional Court of South Africa, explaining the freedom of contract principle, stated thus:
“Self-autonomy, or the ability to regulate one’s own affairs, even to one’s own detriment, is the very essence of freedom and a vital part of dignity. The extent to which the contract was freely and voluntarily concluded is clearly a vital factor as it will determine the weight that should be afforded to the values of freedom and dignity”
The conclusion is clear-cut if an employee agrees to a contract of employment, he or she is bound by the same, failure to do so would amount to a breach of contract. Our courts are not empowered to rewrite contracts of employment as this is a role left to the parties. The role of a court is to interpret and enforce a contract duly agreed upon by the parties we submit therefore that the reasoning of the court cannot be faulted.
Employers can therefore give employees within the same grade different salaries for as long as this does not violate a CBA.
This case should not be used as the basis for justifying wage discrimination based on gender. This is what we mean, if employee A is male and employee B is female, the expectation is that the two employees should get a similar salary or wage. This is so as a function of the statutory provisions in the Labour Act. Discriminating employees’ wages based on their gender is unlawful.
Section 5 (2a) provides:
No employer shall fail to pay equal remuneration to male and female employees for work of equal value.
In terms of the definition work of equal value, section 2 of the Act provides that:
“work of equal value”, for the purposes of subsection (2a) of section five, means work that involves similar or substantially similar skills, duties, responsibilities, and conditions;
It also goes on to provide that equal remuneration means:
“equal remuneration”, for the purposes of subsection (2a) of section five, means rates of remuneration that have been established without differentiation on the basis of gender;
What is clear in these provisions is that on the basis of gender, an employer is precluded from differentiating wages and salaries. We submit that, perhaps, if the applicant in Thokozile Zinonda v Cafca Limited SC 64 -17 had couched her case along the lines of gender discrimination, provided the facts supported this, her prospects of success would have been better.