It’s that time of year again, and with it the topic of 13th cheques arises. Employees very often believe they have a right to receive one, and are aggrieved when they don’t. Employers are sometimes unsure as to whether to award or not, and rely on contractual discretionary clauses to explain their actions.
Our law is fundamentally simple in this regard. Employees are not entitled to a 13th cheque, unless specifically stipulated in their terms of employment. Very often employment contracts mention 13th cheques and/or bonuses which are payable “in the sole discretion” of the employer. This does not give rise to a right, but confirms the position that any such payment is an ex gratia payment. Employers are not obliged to make any ex gratia payment, unless agreed to and guaranteed in non-discretionary terms.
Any queries in this regard can be directed to James Foxcroft in our Labour Law Department.