Click to edit Master title style Draft Code of Good Practice on Equal Pay for Work of Equal Value 28 October 2014 Presented by: Lionel van Schalkwijk PE Corporate Services SA (Pty) Ltd Tel: 031 700 1597
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 . 2
Draft Code of Good Practice on Equal Pay for Work of Equal Value Scope This 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 3
Draft Code of Good Practice on Equal Pay for Work of Equal Value 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? 4
Draft Code of Good Practice on Equal Pay for Work of Equal Value 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.
Draft Code of Good Practice on Equal Pay for Work of Equal Value 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 Occupational Levels Band F Top management E Senior management Professionally qualified and experienced D specialists and mid-management Skilled technical and academically qualified workers, junior management, C supervisors, foremen, and superintendents Semi-skilled and discretionary decision B making A Unskilled and defined decision making
Draft Code of Good Practice on Equal Pay for Work of Equal Value 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 Scope of audit Job Job Job Analysis Description Grading Job worth Hierarchy (Grade Map) The process of examining and The final result of the job grading process. Document the job analysis by writing job The ranking of levels of jobs or job worth documenting the content of a job, descriptions/profiles hierarchy using a job grading system breaking it down into tasks, functions, Illustrates where each job fits relative to minor functions, work methods, other jobs. processes, operations and elements.
Grade Map Grade Company ABC 17 Managing Director Manufacturing Finance, Cost Planning, Grade Human Resources Assembly Production Control Logistics Commercial, Purchasing 16 15 Snr GM Manufacturing Snr GM Finance Snr GM HR Snr Prod Manager IMV 14 Snr Prod Manager Corrola Logistics Manager 13 Production Mngr - Assembly GL Production Control GL- Cost Planning Commercial Manager 12 Cost & Management Accountant Group Leader ogistics Supplier Development HR Generalist Group Leader tores Expenditure Accountant IR Manager 11 Senior Expeditor Revenue Accountant Training Manager IT Projects Supplier Quality Assurance Occupational Health Nurse Purchasing / Buyer 10 IT Administrator Group Leader Expeditor Safety Officer 9 - Nys & Training - Assembly Jnr Group Leader Cost Analyst HR Officer 8 VAVE Training Officer Logistics Clerk APDP Clerk CEO - PA 7 Payroll Administrator Costing Clerk HR Administrator Purchasing Clerk Safety Administrator 6 Local Creditors Wage Clerk
Job Evaluation Process Job Job Job Analysis Description Grading Job worth Hierarchy (Grade Map) Stage two After the Job Worth Hierarchy is built, a Company Salary Structure is created and Company used as a framework for pay decisions Salary Structure
Salary scales Click to edit Master title style A typical Grade overlap External Competitiveness (Stage 2) is 10% to 30% 1 2 3 4 5 6 7 8 Internal Equity (Stage 1)
Linking Grades to Market Salary Structure Comparison of ABC Individual Guaranteed Package Salaries (as at December 2013) against proposed Guaranteed Package Pay-Scales as at April 2014. 1 200 000 Salary (Guaranteed Package) Rands per annum. 1 000 000 800 000 600 000 400 000 200 000 0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 A1 A2 A3 B3 C1 C2 C3 C4 D1 D3 B1 B2 B4 B5 C5 D2 D4 D5 Paterson Grades Minimum Midpoint Maximum Individual Salaries
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