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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.
November 9, 2026

Section 187(1)(f) of the LRA reads as follows: ‘A dismissal is automatically unfair if the reason for the dismissal is that the employer unfairly discriminated against the employee, directly or indirectly, on any arbitrary ground, including but not limited to religion, conscience and belief”.

In terms of s187(2)(a) of the LRA, despite the aforesaid s187(1)(f), a dismissal may be fair if the reason for the dismissal is based on the inherent requirements of a particular job.

What approach is to be followed to determine, firstly, whether the reason for the dismissal on the basis of religion, conscience or belief is based upon an inherent requirement of a particular job?

And, secondly, what approach is to be followed to determine whether or not an employer complied with its duty to reasonably accommodate the aforesaid category of employees?

November 2, 2026

In the previous article, we set out the traditional approach to s187(2)(b) of the LRA, covering the scenario where an employee reached the normal or agreed-upon retirement age, but continued to work beyond such age. The constitutional court, in Motor Industry Staff Association and Another v Great South Auto Body CC t/a Great South Panelbeaters (Landman); Solidarity obo Strydom and Others v State Information Technology Agency Soc Ltd (Solidarity) – combinedly referred to as Landman; Solidarity – had the opportunity to scrutinise such traditional approach and delivered three conflicting judgments. So, what approach should role players now employ, seeing that consensus was not reached in the constitutional court?

October 26, 2026

In terms of s187(1)(f) of the LRA, a dismissal is automatically unfair if the reason for the dismissal is that the employer unfairly discriminated against the employee, directly or indirectly, on any arbitrary ground, including, but not limited to, age.

In terms of s187(2)(b) of the LRA, despite s187(1)(f), dismissal, based on age, is fair if the employee has reached the normal or agreed retirement age for persons employed in that capacity.

What is the approach traditionally adopted where an employer permits an employee to work beyond the normal or agreed-upon retirement age and subsequently wishes to terminate the services of the employee, based on age, and wishes to rely on the defence as set out in s187(2)(b)?