Can a failure to extend a collective wage agreement be unfair discrimination?

The most recent amendments to the Employment Equity Act permit the CCMA to consider unfair discrimination claims in certain circumstances. Exercising its newly found jurisdiction to determine ‘equal pay for equal work’ claims, the CCMA recently considered this question in the matter between WEPU obo members v Lewis Stores (Pty) Ltd and SACCAWU obo members (unreported arbitration award, GATW3227-15, 20 November 2015).¹ WEPU represented less than 1% of employees in the bargaining unit. Lewis Stores did not recognise it for any purpose. On the other hand, Lewis Stores recognised SACCAWU, whose members constituted close to 50% of employees in the bargaining unit. Non-members of SACCAWU in the bargaining unit did not benefit from the wage agreements concluded between their employer and SACCAWU. Instead, their increases were determined by their performance. Of significance was the fact that WEPU members who met the required performance standards were afforded the same increase as their SACCAWU counterparts.

WEPU referred an unfair discrimination dispute to the CCMA. It contended that Lewis Stores’ failure to extend the same increase to its members resulted in unequal pay for work of equal value. This, it argued, amounted to unfair discrimination on an arbitrary ground. Lewis Stores adopted the approach that it was under no obligation, in law or contract, to extend the agreement. It accordingly used the objective criterion of performance as the basis of increases for non-members of SACCAWU in the bargaining unit.

The CCMA considered the test for unfair discrimination. The onus was on the WEPU to prove that Lewis Stores’ conduct in extending the agreement on wages, was irrational and amounted to discrimination, which was unfair. The CCMA found that WEPU did not prove the equal work for unequal pay amounted to unfair discrimination. It recognised that the collective bargaining process may result in employees doing work of equal value for unequal pay. In our view, to find otherwise may well have the effect of subverting the collective bargaining system that underpins the Labour Relations Act. It may also have the unintended consequence of discouraging trade union membership, as non-members would obtain the same wages without having to pay trade subscriptions or engage in industrial action.