n South African Law Journal - Employees' rights to discretionary benefits

Volume 127, Issue 3
  • ISSN : 0258-2503
  • E-ISSN: 1996-2177



Discretionary bonuses are regularly relied upon by employers to motivate employees to increase their remuneration through improved performance. Employees may harbour the reasonable expectation that, provided they perform their work effectively, they will be entitled to these anticipated benefits. However, in the current economic climate, such expectations may be sorely disappointed. Labour legislation distinguishes between disputes of right and disputes of interest. Disputes of right, such as an entitlement to a benefit that arises ex contractu, ex lege or through collective agreement, are justiciable through the dispute resolution mechanisms created in terms of the legislation; namely through the arbitration or adjudication process. Disputes of interest, on the other hand, must be resolved through negotiation on an individual or collective level and, where appropriate, by industrial action. But there is a middle ground between a right and an interest - a spes. Where the words or conduct of an employer create a reasonable expectation in the mind of an employee that a benefit will accrue, a spes may arise, irrespective of an express contractual entitlement to the contrary. This article considers whether any remedy exists for an employee that establishes a reasonable expectation of entitlement to a discretionary benefit, but which falls short of a legally enforceable right. By means of an analysis of the statutory unfair labour practice provisions, relevant contractual remedies and the doctrine of estoppel, it will become apparent that employers that fail to honour such expectations may, in appropriate circumstances, be held accountable for an employee's disappointed expectations.

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