LETTER: Fair pay bill is unnecessary

Linda Ensor reported that Build One SA (Bosa) is attempting to persuade parliament to pass a “Fair Pay Bill”, which would constitute amendments of the Employment Equity Act (“Bosa proposes bill to ensure fair pay for employees,”  June 12). 

In my view the prohibition clause in the Fair Pay Bill is completely misconceived for several reasons. It is commonly accepted that the employment law system of SA has become burdensome and over-regulated, with a negative effect on overhead costs and economic growth. The timing of the bill is therefore poor. It is simply unnecessary to impose such a restriction on employers, as employees are sufficiently protected by our laws and the prohibition does not promote equal pay. 

In summary, the Fair Pay Bill seeks to prohibit employers from accessing or taking account of past remuneration information of job applicants when determining remuneration in either recruitment, selection or appointment practices. The introduction to the bill suggests this approach promotes so-called remuneration transparency. 

But the bill is inappropriate, unwise and impractical for legal and practical reasons, namely:   

• It refers to the UN International Labour Organisation Convention on Equal Pay, but that convention — which is already far-reaching — does not contain a prohibition on employers requesting the past remuneration of job applicants; 
• When employers inquire about past remuneration and request payslips, this provides insight into the employment conditions of the employee, including their status or worth within which he/she was held. That practice is not intended to minimise the salary of an employee at the prospective employer. It is a factor, but is not the sole factor. Requesting that information is a sensible practice; 
• Recruitment is a complicated and difficult issue and misrepresentations and fraud have become prevalent. In the absence of the employer not being provided with the remuneration details, some job applicants have and could seek to mislead the employer; 
• The bill potentially clashes with the amendments of the Companies Act that promote transparency on remuneration; 
• Such a restriction would place the economy of SA at a further competitive disadvantage because that restriction is not part of the law in many other competing countries; 
• A job applicant is entitled to decline to provide the details on their past salary, but of course the downside is that they may not then be shortlisted for the vacancy; 
• The effect of the prohibition is that in the absence of the employer having the details on the past remuneration paid to the employee it could require employers to pay more than what is necessary in the circumstances, which is a valid consideration as it is a cost item; 
• Where an employee is placed within a job grade the employer would pay that employee between the minimum and maximum amount in respect of that grade depending on the employee’s experience, skills and past training, and accordingly such an approach would not breach the equal pay rule; 
• The equal pay rule does not mean that all employees irrespective of experience, skills, training and other relevant factors should be paid the same amount because depending on the factors stated above, they would be paid between the minimum and maximum for the applicable grade; 
• The prohibition interferes with fair labour practice because it prevents the prospective employer from taking account of all relevant factors when deciding whether to make an offer of employment to a job applicant; 
• While there is an attitude in some circles that the considerations of employers are irrelevant, the prohibition will cause huge frustration on the part of employers as the checking and analysis of those remuneration details is an accepted, fair and rational practice; 
• What is most important is that where the job applicant voluntarily discloses their past salary to the prospective employer, the employer most probably would consider appointing those persons who have made voluntary disclosures and this will detrimentally effect job applicants who have not made those voluntary disclosures; 
• Payslips can be complicated and it is common for employees to interpret their payslips incorrectly. In the absence of exhibiting the payslip, wrong information can be given to the prospective employer; and
• On occasion, job applicants inflate their current remuneration packages, and by exhibiting the payslip this dishonest approach is discouraged. 

The draft Fair Pay Bill in the present form has not been properly thought through. It is unnecessary and should be withdrawn. It will not serve its purpose. Proper research on the issue should be conducted and parliament should not support another restriction leading to further over-regulation of the SA economy. 

Rod Harper
Gottschalk Attorneys

JOIN THE DISCUSSION: Send us an email with your comments to letters@businesslive.co.za. Letters of more than 200 words may be edited for length. Anonymous correspondence will not be published. Writers should include a daytime telephone number.​