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Do you have to pay your employee an annual salary increase? Here's what labour law says

by , 11 March 2015
Recently, The National Union of Mineworkers said that it will submit its wage demands in the gold and coal mining sectors by the end of March.

This because wage agreements in the two sectors expire in June 2015.

However, the union will submit its demands to employers this month. And you can bet they'll be asking for more money for their workers.

What about you? When it comes to your employees, must you pay them annual salary increase?

Read on to find out

According to the law, paying an annual increase is NOT  mandatory

Your employee doesn't have a legal right to an annual increase.

This means you don't even have to negotiate increases, unless:
1. Your employment contracts say you will;
2. You have a collective agreement with a trade union;
3. A bargaining council agreement or sectoral determination that applies to your sector says you have to.

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If none of the three situations apply, it's up to you if you want to offer a salary increase.

Note: You can't unilaterally take away the right to a salary increase if it's guaranteed

In other words, if you guarantee your employees' salary increases in their employment contracts, you can't just remove this right and replace his employment contract. This equals breach of contract from your part!

I..e. Changing a 13th cheque with a discretionary annual increase.

However, you could be guilty of unfair labour practices if you don't give an increase when an employee meets all the requirements for a discretionary increase but you don't give him one, and you don't have a valid reason for this.

In a case like this, your employee would then have to prove:

1. He has some entitlement to an increase. For example, it's company practice to give annual increases, or all other employees got one; and
2. You acted unfairly by not increasing his salary. For example, by deciding not to give him an increase without a valid reason.

So keep in mind that if you don't guarantee increase and you don't think you'll be able to pay them, tell the employees so they know what to expect.

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