A performance bonus is normally paid for good performance and is tied back to some type of Key Performance Indicators KPI set out by management at the beginning of the financial year. Bonuses of this nature can be set at an individual or department level. Your employer is unlikely to have offered you an employment contract with a guaranteed 13 th cheque. The more likely scenario is that your bonus will be performance related and based on how many new life insurance policies were sold on the back of your online marketing efforts.
Money , Past-Articles. Did you know that there is a difference between a 13 th cheque and a bonus? How is a bonus different to a 13 th cheque? This means that if an employer who presently does not pay bonuses wishes to continue not paying bonuses, they can continue not paying, without fear of being accused of an unfair labour practice.
However, the position is different where the employer has previously paid bonuses to its employees, as the employees have a reasonable expectation that the employer will continue paying the bonuses as it has done in the past. Those employees have now come to expect the payment of the bonus as a right or entitlement. The South African Labour Guide states that in the case of employers who now wish to change the status quo regarding payment of bonuses , either by paying less, paying at a different time of the year, splitting what was an annual bonus into two separate payments, or discontinuing such payments completely, will have to consult with the employees, explain the problems, and try to get them to accept the new system that they wish to implement.
Should the employer fail to negotiate the changes that they wish to implement, it could lead to claims of unfair labour practices from the affected employees against the employer.
The Courts have previously found that employers should consult employees on this issue well in advance. And this matter, it seems, is dealt with largely at the discretion of individual employers — with some caveats. This means that the payment or non-payment of bonuses is a matter entirely for the employer to decide and to negotiate with employees.
Porter says this is a contractual issue and employees must take care to include it in their contracts if they wish to have a guaranteed bonus.
He adds that if a company has followed the company policy or the terms of an employment contract, employees will not be able to contest a company decision not to give a bonus. Hence, if an employer breaks contractual obligations by paying no bonus or one that is too low, employees may be able to take legal action.
The reason for this is that it might be seen as a change to terms and conditions of employment. The South African Labour Guide asserts that in the case of an employer who presently pays bonuses and wishes to change the status quo to some extent, will have to consult with the employees, explain the problems, and attempt to get them to accept the new system. However, he says, the burden of proof in contesting the non-payment of a bonus rests with the aggrieved employee.
In instances where an employer is found to have exercised its discretion inconsistently amongst different employees, or with a clear intention of favouring or prejudicing one employee over another, this would in all likelihood assist the aggrieved employee in the discharge of their onus.
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