- Employees proved that the 13th cheque formed part of their contracts of employment and could not be lawfully removed during wage talks or replaced with a discretionary bonus.
- The court rejected the employer’s claim that the benefit was merely a workplace practice and found the unilateral withdrawal amounted to a clear breach of contract under Section 77 of the Basic Conditions of Employment Act.
- Barrs Pharmaceutical Industries (Pty) Ltd has now been ordered to pay four years of outstanding 13th cheques to 45 remaining workers within 10 days, restoring income that many families depend on each December.
Workers who lost their December 13th cheque for four consecutive years have finally secured relief after the Labour Court in Cape Town ruled that their employer, Barrs Pharmaceutical Industries (Pty) Ltd, acted unlawfully when it scrapped the guaranteed payment. Avacare Health Group (Pty) Ltd was also cited in the proceedings.
Acting Judge R Daniels held that the benefit was not a favour or perk, but a binding term of employment. The case was brought by Chemical Energy, Paper, Printing, Wood and Allied Workers’ Union (CEPPWAWU) on behalf of 45 affected members.
From the outset, the court framed the issue squarely as a contractual dispute. Judge Daniels wrote that the matter concerned terms and conditions relating to the applicants’ employment contract, in particular the payment of a 13th cheque and whether this was a term and condition of the applicants’ employment contract to which they were entitled.
A payment that families built their lives around
For years, workers received a guaranteed extra month’s pay every December. It was not treated as a bonus linked to performance, but as a predictable part of annual income. Many used it for school fees, food, debt repayments and festive season costs.
During 2021 wage negotiations, the company, Barrs Pharmaceutical Industries, told employees it intended to discontinue the 13th cheque and replace it with a performance-based bonus. Staff who accepted the change would receive a 5.5 percent increase. Those who refused would not.
The judge recorded that the message to workers was blunt. Employees were urged to accept this revised structure, which included forfeiting the contractual 13th cheque in exchange for a performance bonus and a 5.5 percent salary increase, the judgment states.
The company also warned that industrial action would achieve nothing. In one letter quoted by the court, management said it would "endure a strike rather than agree to the demand by CEPPWAWU."
Despite the pressure, many workers initially refused to surrender what they believed was their right. The company then implemented the change unilaterally. In December 2021, instead of the usual cheque, employees received only an ex gratia R3 000 payment.
Court rejects workplace practice defence
In court, Barrs Pharmaceutical Industries argued that the 13th cheque was merely a workplace practice and not legally enforceable. Judge Daniels found this argument inconsistent with the employer’s own past admissions.
He pointed to earlier proceedings and a written settlement where the company had acknowledged: "The Respondent is contractually obliged to pay each employee a 13th cheque."
After reviewing the evidence, the court concluded there was no real dispute. Judge Daniels stated: "There can be no doubt that the employees are contractually entitled to a 13th cheque."
He went further, finding that the employer’s conduct amounted to a breach. "I am furthermore in agreement with the applicants and find that Barrs is in breach of the contract between itself and its employees," he wrote.
Attempts to create factual disputes were dismissed. The judge described the company’s version as "bald and far-fetched" and said it did not raise "real, genuine and bona fide disputes of fact."
Order brings long-awaited relief
By the time the case was heard, many workers had felt forced to accept the employer’s offer and give up their claim. Only 45 remained. The court acknowledged the unequal power dynamics, noting they were ordinary salaried employees who live from pay cheque to pay cheque in order to provide for themselves and their families.
The final order was decisive. The judge declared that the applicants are entitled to payment of a 13th cheque in terms of their contract of employment and directed Barrs Pharmaceutical Industries to pay each of the 45 workers every unpaid 13th cheque from 2021 to date within 10 days.
No costs order was made, given the ongoing employment relationship.
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