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Article 43/2025

When calculating a wage for the purpose of the National Minimum Wage Act 9 of 2018 (NMWA), in terms of s5(1)(c), the following is to be excluded: ‘gratuities, including bonuses, tips or gifts’.

In Quantum Foods (Pty) Ltd v Jacobs NO and Others (2024) 35 SALLR 118 (LAC); [2024] 1 BLLR 32 (LAC), the employer embarked on a process restructuring its payslips – before the restructuring exercise, an employee’s bonus had been reflected on the payslip when it was paid out; after the restructuring exercise, the bonus was reflected as a cash amount and monthly pro rata bonuses were reflected as deferred payments.

On what basis did the LAC, in the aforesaid matter, determine that a bonus to which an employee is contractually entitled is not to be excluded ito s5(1)(c) of the NMWA, but, indeed, is to be taken into account in the calculation of wages for the purposes of such Act?

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The LAC (per Smith AJA, with Waglay JP and Malindi AJA concurring) adopted the following approach:

  1. s5(1) of the NMWA reads as follows:
    1. Despite any contract or law to the contrary, the calculation of a wage for the purposes of this Act is the amount payable in money for ordinary hours of work excluding –
      1. any payment made to enable a worker to work including any transport, equipment, tool, food or accommodation allowance, unless specified otherwise in a [sectoral] determination;
      2. any payment in kind including board or accommodation, unless specified otherwise in a sectoral determination;
      3. gratuities including bonuses, tips or gifts; and
      4. any other prescribed category of payment.’ (underlining provided)
  2. This provision and the relevant contractual clause must be construed in terms of the accepted canons of construction, which means that regard must be had to the language used, the context in which the provision appears, its apparent purpose and the material known to those who drafted it (University of Johannesburg v Auckland Park Theological Seminary and Another 2021 (6) SA 1 (CC)).
  3. Gratuity, in s5(1)(c) of the NMWA denotes discretion on the part of the giver (without creating any legal or contractual entitlement) – the term ‘gratuitous’ has been authoritatively interpreted by the SCA in Estate Welch v Commissioner for SARS [2004] 2 All SA 586 (SCA), at paragraph [31], as meaning something ‘motivated by pure liberality and not in expectation of any quid pro quo’ and without any obligation to pay.
  4. In applying the eiusdem generis rule, the other payments referred to in s5(1)(c) of the NMWA (i e bonuses, tips or gifts) must be restricted to the same generic meaning of gratuity.
  5. Therefore, the meaning of ‘bonus’ in the said s5(1)(c) is a gratuitous or voluntary payment – on the other hand, the nature of the bonus that Quantum Foods paid was very different, seeing that the employer was contractually obliged to pay this to its workers.
  6. Thus, the employer was entitled to restructure its payslips and include in the monthly remuneration the bonus that it was contractually obliged to pay.
  7. And what about provident fund contributions? – seeing that s5(1) does not expressly exclude or include such payments, the employer was entitled to restructure its payslips to factor this into the calculation of the employee’s hourly rate.
July 20, 2026

Precautionary suspensions

In the public sector, the Senior Management Service Handbook (SMS Handbook) directly addresses precautionary suspensions and the 60-day time limit.

Clause 2.7(2)(c) of the SMS Handbook provides that ‘If a member is suspended or transferred as a precautionary measure, the employer must hold a disciplinary hearing within 60 days. The chair of the hearing must then decide on any further postponement.’

Regulation 6 of the Local Government: Disciplinary Regulations Senior Managers, 2010 (Regulations) provides for the precautionary suspension of senior municipal employees and Regulation 6(6)(a) provides: ‘If a senior is suspended, a disciplinary hearing must commence within three months after the date of suspension, failing which the suspension will automatically lapse.’

What are the principles governing a determination of the question as to whether or not a senior municipal employee’s suspension automatically lapses in terms of the aforesaid Regulation 6(6)(a)?

Obviously, the answers to the aforesaid question are very relevant in the private sector where, firstly, a collective agreement regulates a similar process or, alternatively, such contractual rights have been created between the parties, to be enforced in terms of s77(3) of the BCEA.

July 13, 2026

In the previous article, we dealt with the consequences of a plant level collective agreement with a definite beginning and end date. We indicated to you that, in line with s23(2) of the LRA, and an analysis of the relevant case law, that, once such a collective agreement reaches its expiry date, it expires and is no longer of any force or effect. In this article, we deal with the scenario where a plant level collective agreement is concluded for an indefinite period and the employer gave notice to terminate same.

What are the consequences when a party to a plant level collective agreement, concluded for an indefinite time period, gives notice to terminate such collective agreement?

July 6, 2026

In terms of s23(2), a collective agreement binds, for the whole period of the collective agreement, every person so bound in terms of s23(1)(c) (the members of a registered trade union and the employers who are members of a registered employers’ organisation who are a party to the collective agreement, if the collective agreement regulates the terms and conditions of employment, or the conduct of the employers and employees) who was a member at the time it became binding, or who becomes a member after it became binding (irrespective of whether or not that person continues to be a member of such trade union or employers’ organisation for the duration of the collective agreement).

What is the relevant case law development as to a plant level collective agreement that has an expiry date, i e does such collective agreement continue to be of force and effect after such expiry date?