Labour Law

Non-Payment of Annual Bonuses

2020 has been an unpredictable rollercoaster ride for businesses in South Africa. Business owners and their employees felt the impact of the COVID-19 restrictions, whether it was a work environment change or being forced to shut storefronts throughout lockdown periods. This impact leads into the holiday season, with employees expecting an annual bonus and not necessarily receiving it. As a result, employees have lodged several enquiries regarding the Labour Law aspects of not receiving their annual bonuses.

Is COVID-19 The Sole Reason?

Everybody can agree that COVID-19 had a notable impact on commercial and industrial businesses in South Africa. Therefore, most companies are not as well funded as they would be at the end of a regular year. There are no statutory requirements in Labour Law to pay bonuses at the end of the year and would be done on agreed-upon terms as opposed to being done on legal grounds. This leads to many people not receiving year-end bonuses in 2020, as their employers ride out the rough seas of COVID-19 and the economical impact on their businesses.

Conditions for Receiving an Annual Bonus

If your employee contract states that you will receive an annual bonus, there will usually be some contingencies to make you eligible for such a pay-out. These contingencies can be linked to performance reviews, overall production output, and similar elements throughout the year. In such regards, your annual bonus is called a “performance bonus”. If you have met the requirements in accordance with your employee contract, you are eligible for your annual bonus payment according to your contract and the Labour Law implications that will be incurred if the agreement is breached. Without any contractual agreement regarding annual bonuses, the employer has complete control of who gets bonuses at the end of the year.

For any Labour Law services, Allardyce & Partners Attorneys offers Labour Law specialists to assist you. Please contact us on 011 234 2125 or email us at enquiries@allardyce.co.za today.