Is annual bonus mandatory?

HARARE - Naturally workers expect to be paid annual bonus come November or December every year.

After almost a year of hard work with little or nothing to show, workers expect to get a boost in a form of a bonus to spend during the festive season and beginning of the following year.

Workers take it as a right which every responsible and law-abiding employer should honour.

 To fully interrogate this subject matter, I have posed a few questions below which will be fully addressed in the article.

Is annual bonus a right or privilege?

Under what circumstances can an employer defer or stop paying annual bonus? Can an employee sue an employer for failing to pay annual bonus?

 The Labour Act is clear on the issue of bonus. According to Section 12(2) (h) of the Labour Act (Chapter 28:01), an employer shall upon engaging a new employee, inform the employee in writing among other things, “particulars of any bonus or incentive production scheme”.

The meaning of it shows that the employee can only be informed if there is something.

 In other words, bonus or incentive production scheme is not mandatory but discretionary.

 It therefore means that awarding of annual bonus is subject to the judgment of the employer.

In simple terms it means where bonuses are payable or not payable, the employer must put it in the employment contract.

It is not an unfair labour practice for the employer to fail to pay a bonus or 13th cheque to the employee, unless this is contrary to what was agreed upon in the contract of employment.

The only circumstances upon which a worker can claim an annual bonus is when it is clearly stated out in a contract of employment or other types of bonus scheme which organisations through their Works Council entered into.

 Having said that, many workers are not deterred by the law and remain adamant and resolute, and highly demanding to earn annual bonus.

This puts a lot of pressure on organisations.

 Most private companies who fail to pay annual bonus plead poor performance during the year as a reason for not offering an annual bonus.

However, it takes good relations and communication between management and workers for this to be believed, and for it not to result in tensions and even poor productivity.

 The situation is different for government workers.

To even ask the question is to invite trouble and worse for the politicians, it means not being voted into office in the next election.

As such civil servants have gone to an extend of looking at annual bonus as an entitlement and right.
 No politician will want to be seen to be taking on the civil servants who constitute the largest number of the working class or dare cross their line on annual bonus.

Many actively support them and try to be good Samaritans, especially with an election in the near future.
 It is perhaps with this knowledge of the political realities in mind that the union officials take the granting of annual bonus as automatic and guaranteed.

 However, the reality is that some workers from the private sector will not get annual bonuses as several companies cite viability problems.

This is a sad scenario for the workers. Where resources permit organisations must pay workers annual bonus.

It is understandably difficult for many, but an annual bonus is not much in circumstances where workers have not been awarded an increment or performance bonus for the whole year.

 However, where payment of bonus is guaranteed, as would be stipulated in the employment contract or company policy, the employer is left without choice but to pay the bonus.

*The writer, Nhamo Kwaramba, is the Principal Executive Consultant for Capacity Consultancy Group.

He is also a Guest Motivation and Business Leadership Analyst for ZBC-TV Good Morning Programme

He can be contacted on: Tel: 04-2906934, 0772 485 937 or E-mail: nhamok@yahoo.com or capacityconsultancy@gmail.com

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