When to Pay or not to Pay Bonuses

When and when not to pay bonuses
There is no law in our land that states that bonuses have to be paid to staff come year – end. The decision to pay bonuses is the prerogative of the employer and the terms and conditions of employment with the employee.

Having said this, employers have to pay bonuses in the following circumstances:
• It is made provision for in the employee’s employment contract;
• The employer has a policy in place that states that bonuses will be paid;
• The employer has created the expectation of bonuses being paid, through past practice;
• It is stipulated as a condition of employment by means of a sectoral determination or collective agreement.

An employer who has never paid bonuses before need not worry and may still continue to do so with no apprehension of committing an unfair labour practice.

If an employer currently pays a bonus and wishes to pay less or change the timing when bonuses are paid, then that employer needs to consult with the effected employees and to try to get them to accept this. This must be done as it will become a change in the employee’s terms and conditions of employment. Should the employer have a valid and rational reason to change bonuses, then the change can still be implemented by the employer even if the employees refuse to accept the change.

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