Bonuses?! Mandatory or not? / by

posted in IR Tips, News

Final salaries for the year are around the corner and many employees might expect a little extra on their payslip. But the economic climate at the moment does not enable all employers to pay bonuses.

A Bonus is an additional compensation given to an employee above his/her normal wage. A bonus can be used as a reward for achieving specific goals set by the company, good performance, or for dedication to the company.


The 3 types of bonuses;

1) 13th Cheque; is a bonus that the employee can expect with certainty if this is part of his or her employment contract

2) Performance bonus; is compensation beyond normal wages and is typically awarded after a performance appraisal and analysis of projects completed by the employee over a specific period of time.

3) Production bonus; is output and target driven and not based solely on company standards. For example the output/production of at least 100 units per employee per month meets a specific quality.


It is important to note that certain bargaining council agreements do make provision for the payment of bonuses. In the case of Bargaining Council and Collective agreements employers will have to respect these agreements.

This means that if you are not bound to any bargaining council and collective agreement, bonuses are not mandatory. However in the case the employer is presently paying bonuses the situation is different as it creates an expectancy with the employee. Thus to avoid this it is important to specify your bonus policy if not bound by a bargaining council in your employment contracts, term & conditions and policies.

Contact us if you are unsure if you need to pay bonuses and if you are bound to and bargaining council agreement.



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