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Do I have to negotiate annual salary increases?

by , 05 November 2014
Our labour experts get a lot of questions from employers.

One question they received this week comes from a Cape Town employer who wants to know if she has an obligation to negotiate annual salary increases.

Read on to find out the answer so you'll know exactly what the law says.


To negotiate or not to negotiate annual salary increases? Here's your answer…

 
You don't legally have to negotiate or give annual salary increases. But, if it's in a collective agreement with a union, or your employment contracts, you do, say the experts behind the Labour Law for Managers Loose Leaf Service.
 
Bear in mind that if you guarantee a salary increase in your employee's employment contract, you can't just remove this right and replace his employment contract. This would make you guilty of a breach of contract.
 
You must get your employee to agree to any change, for example, changing a 13th cheque with a discretionary annual increase.

 
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Now that you know whether or not to negotiate annual salary increases, do this to ensure you and your employees don't fight over salary increases
 

In this article, we explain that you must have a remuneration policy in place and communicate it to your employees. Your policy must outline when you'll give increases and how you'll work them out.
 
You can give your new employees this policy when they start to work for you. And you must make sure you give existing staff a copy of the policy in case their contract doesn't refer to how you give increases.

PS: For more information on how to handle salaries effectively, check out the Labour Law for Managers Loose Leaf Service. The Loose Leaf Service also gives you all the details you need for maximum protection in labour-related problems.
 
Alternatively, if you have any questions about salaries, ask our experts' at the Labour & HR Club.
 


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