The question of “Why didn’t I get a bonus?” is one that crosses the mind of many employees, as they often feel that they have a right to a bonus.
The South African Labour Law is silent on the issue of bonuses with the result that the payment or non-payment of bonuses is left to the discretion of the employer. Certain bargaining council collective agreements make provision for the payment of bonuses and are thus binding on the employers of those sectors. The general rule of thumb is that if an employer does not pay their staff a bonus at all and wishes to continue in that vein, they can proceed to do so without being found guilty of unfair labour practice.
Where the employer has made it a practice to pay bonuses, be it performance or production based or a 13th cheque, the situation is different due to the fact that employees have come to see that bonus as part of the terms and conditions of their employment. As a result, a legitimate expectation has been created that they will receive the bonus. It is highly recommended that situations like this be clearly provided for and outlined in the employment contract to avoid any potential misinterpretations.
If the employer wishes to deviate from the norm, either by paying less, changing the time of when a bonus is paid or not paying a bonus at all, they will have to consult with the employees. Employers have to explain what the problem and cause of the change is, and try to get employees to accept the new system, due to the fact that such a change would be considered to be an alteration of the employees’ terms and conditions of employment, which cannot be done unilaterally and without consultation with the employee.
If the employees refuse to accept the change and the employer has provided rational and sound commercial reasons for the alteration, the employer can proceed and implement the proposed changes after negotiations.
There are 3 common types of bonus that an employee generally receives:
- A Performance Bonus
This is normally given to employees where they have performed above expectation. It is normally based as a percentage of the employee’s salary or wages.
- A Production Bonus
Instead of being performance-based, this bonus is measured against targets and quality of production. An example of this would be where a company sets a target for a specific employee or department to produce a certain number of items within a specific time, and that employee or department achieves that target.
- A 13th Cheque or Christmas Bonus
This is generally considered to be a payment of gratuity where the employer thanks the employee for a job well done. It is the more common of bonuses paid and the one most employees come to expect. It is either paid at the end of the year before the December shutdown, the employee’s birth month or the month that employee started working for the company.
ABOUT THE AUTHOR:
Charlene Botha is a SEESA Consumer Protection and POPI Legal Advisor at our Port Elizabeth office. Prior to joining SEESA, she practised as a Civil Litigation Attorney.