As South African businesses prepare to close the year, many employees begin anticipating year-end bonuses. However, it is important to understand that bonuses are not automatically guaranteed under South African labour law. Whether a bonus is payable depends entirely on the wording of the employment contract, workplace policies, or the specific bonus framework applied within the organisation.

Are Year-End Bonuses a Legal Right?

No. There is no statutory obligation on employers to pay a year-end bonus. Instead, the entitlement must arise from:

• An employment contract
• A collective agreement
• A company-wide bonus policy
• Established practice that has become a term and condition of employment

Absent these, bonuses remain a matter of employer discretion.

Guaranteed Bonuses: A Binding Obligation

Where a bonus is expressly guaranteed, such as a thirteenth cheque or fixed annual payment, the employer is legally required to fulfil this obligation. These payments become enforceable contractual rights, and failure to honour them can lead to breach-of-contract disputes.

Discretionary Bonuses: Fairness Still Required

Many employers offer performance or productivity bonuses. Although these are discretionary, the discretion is not unlimited. Employers must apply their bonus criteria:

• Lawfully
• Rationally
• Consistently
• Without discrimination

Unfair or arbitrary decision-making may expose employers to grievances or unfair labour practice claims.

Why Clear Policies Matter

Transparent communication around bonus structures is essential. Employers should ensure that staff understand:

• How bonuses are calculated
• Whether they are guaranteed or discretionary
• Any performance or productivity requirements
• Conditions that could exclude an employee from receiving a bonus

Clear, well-drafted bonus policies reduce misunderstandings, maintain morale, and limit the risk of legal challenges.

How Mayet & Associates Can Assist

Our team advises both employers and employees on bonus entitlements, contractual rights, and compliance with South African labour law. We draft and review bonus policies, employment contracts, and internal guidelines to help businesses remain compliant while managing expectations effectively.

For tailored advice or assistance with drafting bonus frameworks, contact Mayet & Associates Attorneys.