Is an Employer Obliged to Pay Annual Increases?
South Africa has a progressive and liberal approach to Labour and Employment Law, causing both employers and employees to misinterpret some laws and legal regulations in the workplace and in working relationships between employer and employee. An excellent example brings us to annual salary increases: Is an employer legally obliged to pay annual salary increases?
From an Employer’s Perspective
Economic inflation leads to price increases across the board, meaning that the price of living gets more expensive each year. As a result, the majority of employees expect their employers to increase their salaries accordingly. On the other hand, employees also expect yearly salary increases as a show of good faith from their employer.
From an Employee’s Perspective
Employers want the best for their company, no matter how they decide to run their business. Money plays a pivotal role in the success and continuation of a business, especially during tough times. Therefore, some employers are reluctant to offer annual salary increases and end-of-year bonuses. With the COVID-19 pandemic and its string of complications, businesses are facing unprecedented times to overcome these challenges, making it even more difficult to offer annual salary increases.
What Does the Law Say?
In South Africa, annual salary increases are not regulated by labour legislation, except where a main or collective agreement is in place that makes provisions for annual wage/salary negotiations. When there isn’t any such agreement between employer and employee, salary increases are a matter of contract between both parties. Therefore, there is no legal obligation on the employer to grant annual salary increases.
Can My Employer Legally Decrease My Annual Salary?
Generally, employers cannot legally decrease an employee’s agreed-upon annual salary, although this statement is subject to several conditions. This comes down to an employer not being able to make unilateral changes to the terms and conditions of employment, which includes annual salary, without consulting the involved employees and reaching a new agreement.
Trust a Labour and Employment Law Expert
If you find yourself in a legal dispute as an employee, you need a specialist in Labour and Employment Law in South Africa to fight in your corner. If you earn more than R20 000 on monthly salary, we can represent you on a “no win, no fee” contingency, tied to our terms and conditions. As a result, you can forget about the risk of facing legal fees when you lose your case and know that our attorneys will give you their best to win your case.
Please contact Allardyce & Partners Attorneys today on 011 234 2125 or email us at enquiries@allardyce.co.za if you need a Labour and Employment Law specialist on your side.
