End of the 13th cheque?

2006-11-30 09:20
Johannesburg - The paying of bonuses not based on performance - such as a 13th cheque at Christmas - is rapidly falling out of favour among companies.

"Employers are reconsidering the paying of bonuses because performance pressure, in particular, demands it," says the South African Labour Guide human resources adviser Derek Jackson.

"Achieving performance targets - whether qualitative or quantitative - and turnover targets is actually becoming the general guideline for the calculation of bonuses."

Jackson says that employees have no recourse to any statutory rights in SA's labour legislation if employers decide to stop paying bonuses. "The law doesn't stipulate such payments and if it's not laid down in company policy or an employee's conditions of service, there's not much anyone can do about it."

No guarantees

The paying of bonuses is seldom guaranteed, Jackson says. "It would therefore not be wise of employees to expect the payment of a voluntary bonus simply because they received one in the previous three years."

Jackson says that in terms of Sections 186 and 191 of SA's Labour Relations Act, employers are obliged to pay bonuses if it can be proved that they were part of the conditions of service.

"It would therefore be wise for the company to state specifically in its conditions of service that it doesn't pay bonuses and that if it sometimes does, and then stops doing so, the staff will know that and accept it."

A privilege, not a right

However, it's also unfair if an employer who had always paid a bonus in the past suddenly decides not to do so.

Says Jackson: "It even happens that employees only see on their payslips for the first time that they haven't been given a bonus. Granted, employees don't have the absolute right to insist on bonuses, but they do have the right to be informed at least six months in advance or be involved in the decision-making."

Jackson advises employers to amend company policy in such a way that performance bonuses are only paid where the particular employee's work and attitude consistently exceed company standards.

Bonuses should therefore be a privilege, not a right.

  • This article originally appeared on Fin24.
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