did not know on which unlisted arbitrary ground they relied. It was only in their heads of argument in court that WAR alleged, for the first time, that the grounds on which they based their discrimination claim was the fact that newly appointed employees were being paid less merely because they had started working later than their long-serving colleagues.
The court held that “nothing in the Employment Equity Act precludes an employer from adopting and applying a rule in terms of which newly appointed employees start at a rate lower than existing, long-serving employees”. The court held further that the Code of Good Practice on Equal Pay/Remuneration for Work of Equal Value (“code”) expressly recognises seniority or length of service as a consideration that could justify differentiation in remuneration, as do the regulations to the act.
As a result, the court held that in order for “mere differentiation” to amount to discrimination the reason for the differentiation must be irrational. In the instance where one relies on an “arbitrary ground” one must be able to show, objectively, that the arbitrary 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 in a comparably serious manner”.
If one were to adopt a wider interpretation of “arbitrary ground” arising out of the amendment to the Employment Equity Act then one must show that the differentiation was capricious or for no good reason (ie irrational). Even if discrimination, however, is found to be present it must nonetheless be found that such discrimination is also “unfair”.
On the facts the court found that there was in fact a rational connection between the difference in remuneration and the length of service, ie to reward long service and loyalty of existing employees. Therefore the differentiation was not arbitrary and, as a result, was not discriminatory.
The court went further and noted that even if the differentiation were found to be arbitrary and discriminatory, it was in any event not unfair.
This case advances the view that differentiation in remuneration of people performing the same work on the basis of length of service does not if itself amount to arbitrary or unfair discrimination. The code of good practice specifically refers to the practice of distinguishing between employees’ length of service when determining remuneration.