In a pivotal Labour Court ruling, PRASA v Hoyo, the court reaffirmed that pay disparities between employees performing the same or similar work can amount to unfair discrimination, unless employers can prove that such differences are based on fair, rational, and consistently applied criteria.
The ruling is a wake-up call to employers—particularly those with legacy pay structures or informal salary negotiation practices—that “because that’s how it’s always been done” is no longer a defence.
Case Summary: What Happened in PRASA v Hoyo
Two employees were performing the same job at PRASA—but with a significant difference in pay. PRASA argued that the disparity was due to one employee being a “historical hire” and other administrative circumstances. However, the court found:
- The work performed was identical
- There were no documented or consistent policies justifying the salary gap
- The justifications offered were arbitrary and not based on fair or measurable criteria
The court concluded that the salary difference constituted unfair wage discrimination, in breach of Section 6(4) of the Employment Equity Act.
Why This Matters for Employers
🔍 Intention Does Not Excuse Outcome
The court made it clear: intent is irrelevant. Whether the disparity was deliberate or not, if the result is unjustifiable inequality, the employer is liable.
📑 Employers Bear the Burden of Proof
If an employee alleges wage discrimination, the employer must provide compelling evidence that the gap is based on:
- Seniority
- Experience or qualifications
- Performance
- Market-related scarcity
- Other objectively fair grounds
Anything less may be deemed discriminatory.
⚖️ Comparators Don’t Need to Be Identical
Employees don’t need to do exactly the same job to compare salaries. It’s enough if their roles are substantially the same or similar in value.
How to Apply This Ruling in Practice
To stay compliant and build a fairer workplace, employers should act now:
- Conduct an Equal Pay Audit
Review your payroll data by race, gender, and occupational level to identify disparities in like-for-like roles. - Document Justifications
For each pay difference, ensure there’s a clear and consistently applied reason—and that it’s backed by written records or policy. - Review Salary Structures and Bands
Develop standardised pay ranges to reduce risk and eliminate arbitrary decisions during recruitment or promotion. - Update Employment Equity Plans
Equal pay forms a critical part of your broader transformation obligations. Make sure your EE Plan addresses this risk area.
Support from Recalibrate: Practical Help for a Complex Task
Through (SA)UEO’s partnership with Recalibrate, members now have access to a network of labour law experts, HR consultants, and equity advisors who can help:
- Conduct in-depth equal pay assessments
- Draft or revise your Pay Equity Policy
- Address complaints or risks before they escalate
- Train HR teams on legal expectations and fair practices
All providers are vetted, experienced, and ready to support your business or practice.
Fair Pay = Fair Practice
Unfair wage gaps not only violate the law—they damage morale, erode trust, and increase your litigation risk. PRASA v Hoyo has made the legal position unmistakable: if you can’t justify it, you can’t defend it.
For expert guidance, contact your organiser or email Elise at elise@recalibrate.info