Can not paying bonuses be an unfair labour practice?

Paying, or not paying, bonuses is a contentious issue – especially when the employer does not pay. Even then nonpayment of some employees who went on strike could still result in a successful unfair labour practice award.

In Hotel, Liquor, Catering Commercial & Allied Workers’ Union of SA obo members / Premier FMCG Ltd - (2018) 27 CCMA 6.7.2 also reported at [2018] 8 BALR 847 (CCMA):

• After 192 employees engaged in a three-month protected strike, they resumed work and a wage agreement was concluded. But the employees were informed later they would not receive their normal annual incentive bonuses. They claimed this amounted to unfair labour practice.

• The employer maintained it was entitled to withhold bonuses because they were discretionary and the strike had cost it about R9m.

• The Commissioner at the Commission for Conciliation, Mediation and Arbitration (CCMA) noted that incentive bonuses had been paid to all employees except for those who had gone on strike.

• As this case was about if denying bonuses was unfair labour practice relating to the provision of benefits, the dispute concerned the fairness of the employer’s conduct. Even though the employer had discretion to grant or refuse bonuses, the case still fell into the scope of section 186(2)(a) of the LRA.

• The Commissioner found that although the strike had caused the employer loss, the employees had nonetheless contributed to profits subsequently made to recover the loss.

• The manner in which the employers exercised its discretion was, accordingly, unfair. The employer was ordered to pay each employee his or her full bonus.

Bonuses are very contentious issues that should be clearly articulated in the contract of employment or policies and procedures.

Jonathan Goldberg is CEO of Global Business Solutions