Equal Pay for Equal Work

In the matter of Passenger Rail Agency of South Africa v Hoyo (CA04/2023) [2024] ZALAC 57; [2025] 2 BLLR 160 (LAC) (6 November 2024) the Labour Appeal Court (LAC) overturned a Labour Court decision that had found the employer guilty of unfair discrimination against the employee on the basis of race and unequal pay.

The LAC found that the Labour Court had erred in its assessment and failed to apply the appropriate legal standards.

The employee had been employed by the employer since 1999 and was appointed as Production Manager in 2012.

He later lodged a grievance, claiming that he had acted in a more senior role without receiving an acting allowance and that two subordinates, both white and transferred from Transnet, earned more than he did despite performing jobs of lesser responsibility.

The employer denied the claims, citing restructuring and salary benchmarking following the integration of employees from Transnet.

The Labour Court ruled in the employee’s favour, finding that the employer had unfairly discriminated against him under section 6(1) of the Employment Equity Act (EEA), by paying him less than his subordinates. 

The Court found that the employer failed to justify the pay disparity and had not taken adequate steps under section 27(2) of the EEA to reduce income differentials. As a result, it awarded the employee compensation for the indignity and harm suffered, although it did not make any findings on his entitlement to an acting allowance or higher remuneration.

On appeal, the employer challenged the ruling, arguing that the Labour Court had incorrectly relied on subordinates as comparators in an equal pay claim and had ignored critical evidence about the reasons for the pay disparities.

The Labour Appeal Court agreed, holding that the employee had not shown that the work performed by his subordinates was the same or of equal value to his own. There was no objective evidence that the salary differences were based on race, particularly since the salary benchmarking process had benefited employees of various races.

The LAC found that the employee had failed to prove that the pay disparity amounted to discrimination on a listed ground, and that the Labour Court had erred in disregarding relevant evidence, including the employer’s salary schedule. The Court stressed that, while income disparities remain a concern, the specific claim of unfair discrimination based on race or equal pay had not been substantiated.

The LAC accordingly upheld the employer’s appeal, set aside the Labour Court’s decision, and dismissed the employee’s claim with no order as to costs. 

Nonetheless, it emphasised the employer’s ongoing obligation to address income differentials under section 27 of the EEA.

Jonathan Goldberg