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Demands Relating to Payment of a Bonus

Demands Relating to Payment of a Bonus

It is important to understand that there is no statutory requirement to pay bonuses unless it is regulated by the main agreement of a bargaining council for that industry. Therefore the payment of bonuses is entirely an contractual issue, that is, you give the employee a right to a bonus or 13th cheque only when you state so in the contract of employment or when you have enter into an agreement such as during annual wage negotiations or because it has become an established practice or custom.

This right to a bonus, even if in the contract or in a wage agreement, is seldom guaranteed as it is mostly stated that it is dependent upon either the performance of the individual employee or the performance of the company.

Can I pay some employees a bonus and others not?

It can certainly be that only certain employees, such as managers, qualify for an annual bonus, and that the general employees do not. This is allowed and will not be seen as “discriminatory” unless you are doing so on discriminatory grounds, such as race, gender, age, etc. In such a case, you may face a challenge from the employees being discriminated against and will have to defend your decision in the Labour Court.

What must I do if the other employees threaten to strike?

The employees who do not qualify for a bonus due to the lack of performance or because they never had the contractual right, may not just stop working and embark on a strike. Such a strike would be unprotected and you can dismiss them after following due procedure. If they are dissatisfied, they must first refer the dispute to the CCMA or bargaining council as one related to a dispute of mutual interest. After conciliation, a certificate of non-resolution may be issued, which then entitles them to give you 48 hours written notice of a protected strike. At this late stage in the year, the CCMA will probably not be able to set the matter down for conciliation until the new year and therefore you will be able to avoid a protected strike during the Christmas period.

What if I can’t afford to pay a bonus this year?

If the company cannot afford to pay the bonus or does not want to pay discretionary bonuses this year, then it does not have to do so, as this is entirely at the discretion of the employer in most cases. However, if it is a condition of service of the employee by virtue of the contract, wage agreement or established custom and practice, then you will be obliged to pay the bonus. 


Photo courtesy of www.businessweek.com