Sonja Vorster
With the end of the year fast approaching, many employees look forward to a bonus. During the tight economic situation the country is experiencing, employers are trying to keep their businesses afloat. And as we all know, dreaded cash flow is a serious problem for most employers.
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Finding a happy medium is not always achieved. Labour Law is silent on the question of bonuses, but it must be understood that the majority of Bargaining Councils and Collective agreements make provisions for bonus payments (often referred to as a 13th cheque) and employers MUST adhere to these provisions. If these companies experience a problem, they have to apply for exemption from the Council.
If the contract of employment makes provisions for a bonus payment as part and parcel of the contractual agreement, then the employer MUST adhere to the agreement.
The case of the employer who presently pays bonuses yearly, without skipping a year, is different. As a direct result of the employer paying bonuses yearly, irrespective of what the contract of employment states, “it is a matter entirely at the discretion of the employer”. The employees have now started to expect the payment of the bonus as a right or entitlement.
Employers need to be consistent and any inconsistency can result in a dispute. During the busy season, a dispute is the last thing a company needs.
If the employer has been paying bonuses and the employer now wishes to change the manner and time of year when bonuses are being paid – or paying less or by splitting the payment of a bonus in two or three separate payments – it must be clearly understood that consultation with the employees MUST take place. The reason being to reach an agreement with the employees so they accept the new payment methods.
The payment method and time cannot be changed without consultation and negotiation, as it would be interpreted as a unilateral change to the employees’ terms and conditions of employment.
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