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Davies Ndumiso Sibanda
FOLLOWING newspaper reports that bonus payment is a discretional payment, there have been a lot of questions and debates relating to the matter among employers and workers.
This is a touchy subject which goes into the pockets of individuals.
The legal answer to the question whether bonus is compulsory or discretional is “it depends”.
There is no better answer than that, as there are numerous types of bonuses given to employees at different times for different reasons.
Even what has been commonly known as Christmas Bonus has different qualifying rules in different organisations.
Questions have been asked whether civil servants in Zimbabwe are entitled to a bonus or not.
The newspaper article alleged the Minister had said public servants were not entitled to a Christmas bonus as it is depended on performance and only those who have performed should qualify to get it.
If those are the rules then so be it.
The first question we should ask is what does civil servants contract of employment and their conditions of service say.
If the contracts said they were entitled to a 13th cheque unconditional, then the 13th cheque is contractual and the employer cannot unilaterally withdraw it or migrate it to a discretional bonus.
A 13th cheque, in most cases, has nothing to do with the performance of the individual or organisation but, based on being at work for the preceding 12 months.
Where the contract say employees will get a bonus in December every year, then the bonus is contractual.
However, one has to read the fine print in the contract as not all Christmas bonuses are contractual.
Some are discretional and the amount to be paid as a bonus is guided by the contract.
We can also look at custom and practice.
However, custom and practice is unlikely to supersede what is contractually in black and white.
It is, therefore, very important to go into the contract and establish first whether the bonus is contractual or discretional or performance related or is guided by something else.
In most cases, discretional bonus is guided by the performance of the business as when the business does well, people get more and when things are not so good, they get less or nothing at all. It all depends on the rules governing payment of bonus.
There are, however, many types of bonuses, these include productivity bonus, savings bonus and safety bonus.
Because of the varied nature of bonuses it is very difficult to make a blanket statement on all types of bonuses, as their structure differs.
A good example is that production bonuses vary in structure from organisation to organisation.
On performance bonuses, these are the most difficult type of bonus to administer as they are made of both objective and subjective measures which in most cases are incapable of withstanding legal scrutiny.
The first problem is that there are many performance management programmes and packages as there are consultants and most big organisations including governments have tended to import well known performance management packages.
These do not fully fit into the organisation’s realities.
Thus creating loopholes for successful litigation by employees who feel they have been unfairly treated.
Performance management will also be of very little value or no value at all where implementers are not properly trained to fully understand the performance management tools where the affected are also not trained to understand the performance management tool.
Some of the most difficult cases I have handled are cases where employers will be trying to dismiss employees for poor performance and courts have put very stringent procedures to follow if one is to dismiss somebody for poor performance.
Usually the journey starts with a performance agreement with both parties making commitments on what they will be doing to ensure the subordinates meet the performance target.
Thereafter parties have to live by the agreement right up to the final performance review.
The sad thing is that in most cases, it is the employer who fails to keep his side of the bargain by failing to provide the necessary feedback and inputs such as tools and equipment to allow the subordinate to perform.
When this happens, the employee cannot be faulted for failure to meet performance targets.
In conclusion, bonus entitlements for each organisation are guided by what the parties contractually agree to, and as such there is no blanket standard for the payment of bonuses.
Davies Ndumiso Sibanda can be contacted on: email: [email protected] Or cell No: 0772 375 235
Online Reporter