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Comply with these 3 legal obligations when it comes to bonuses

by , 30 November 2015
It's that time of the year again where employers are busy finalising year-end bonuses. If you're one of them, before you finalise anything, you need to make sure you meet certain legal requirements.

Meeting these obligations will protect you from unfair labour practice accusations from your employees.

Keep reading below...

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3 legal obligations you must comply with when it comes to bonuses

Once you have decided which bonus scheme option is best for your company, make sure you meet these 3 legal obligations.

1. If you've guaranteed your employee's bonus, you can't decide to remove this guarantee from his contract and replace it with a discretionary bonus.

If you do this, it's a breach of contract.

You must get your employee to agree to such a change. Your employee can take you to the CCMA if you breach his contract. He'll accuse you of unfair labour practice or unfair discrimination in which he can claim payment of the amount he's entitled to.

2. You must treat all employees the same. You could be guilty of unfair discrimination if you treat employees who are in similar positions differently. For example, by paying bonuses to some employees and not to others. If this unfair treatment coincides with differences in race, gender, or any other discriminatory ground, you may be guilty of unfair discrimination (Employment Equity Act, Act 55 of 1998).

3. Record, in writing, the details of all payments your employee is entitled to (Section 33 of the BCEA). Clearly define details of the type of bonus and when you'll pay it in your employment contracts.

To find out more on optional company bonus schemes, turn to chapter B02: Bonuses in your Practical Guide to Human Resources Management handbook. If you don't have a copy yet, click here…

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