MRL3702 Assignment
1 (COMPLETE
ANSWERS) Semester 1
2025 - DUE March
2025
FOR ASSISTANCE
CONTACT
EMAIL:gabrielmusyoka94
, Legal Opinion: Quantum Foods (Pty) Ltd v Commissioner H Jacobs N.O. and Others
Summary of the Facts of the Case
In the case of Quantum Foods (Pty) Ltd v Commissioner H Jacobs N.O. and Others (JA85/2022) [2023]
ZALAC 27, the appellant, Quantum Foods, sought to comply with the National Minimum Wage Act 9 of
2018 (NMWA) by restructuring its employees' payslips to include contractual bonuses and provident
fund contributions. These bonuses were guaranteed and paid either annually or monthly. The General
Workers Union of South Africa, representing its members, contested this practice, arguing that such
bonuses should be excluded from the calculation of the minimum wage as per section 5 of the NMWA.
This dispute was initially brought before the Commission for Conciliation, Mediation, and Arbitration
(CCMA), where the commissioner ruled in favor of the union, stating that bonuses, even if contractually
guaranteed, should not be included in the minimum wage calculation. Quantum Foods subsequently
sought a review of this decision in the Labour Court, which upheld the CCMA's ruling. Dissatisfied,
Quantum Foods appealed to the Labour Appeal Court (LAC).
hbgschindlers.com
Issue(s) in Dispute in the Case
The primary issue in dispute was whether contractual bonuses and provident fund contributions should
be included in the calculation of the minimum wage under the NMWA, specifically in light of section
5(1)(c), which excludes "gratuities including bonuses, tips or gifts" from such calculations.
hbgschindlers.com
The Court’s Decision
The Labour Appeal Court overturned the decisions of the CCMA and the Labour Court. The LAC held that
contractual bonuses, which are guaranteed and form part of the employees' regular remuneration,
should be included in the calculation of the minimum wage under the NMWA. The court reasoned that
the term "gratuities" in section 5(1)(c) refers to discretionary bonuses, not those contractually obligated.
Therefore, excluding guaranteed contractual bonuses from the minimum wage calculation would be
inconsistent with the purpose of the NMWA.
hbgschindlers.com
Legal Opinion and Importance of the Case
The Quantum Foods decision is pivotal in clarifying the interpretation of the NMWA concerning the
inclusion of certain payments in the minimum wage calculation. The court's distinction between
discretionary and contractual bonuses provides essential guidance for employers and employees alike.
Clarification of "Gratuities"
By interpreting "gratuities" to exclude guaranteed contractual bonuses, the LAC has delineated the
scope of payments considered in minimum wage calculations. This ensures that employees receive a fair
wage that reflects all components of their agreed remuneration, aligning with the protective purpose of
the NMWA.
hbgschindlers.com
1 (COMPLETE
ANSWERS) Semester 1
2025 - DUE March
2025
FOR ASSISTANCE
CONTACT
EMAIL:gabrielmusyoka94
, Legal Opinion: Quantum Foods (Pty) Ltd v Commissioner H Jacobs N.O. and Others
Summary of the Facts of the Case
In the case of Quantum Foods (Pty) Ltd v Commissioner H Jacobs N.O. and Others (JA85/2022) [2023]
ZALAC 27, the appellant, Quantum Foods, sought to comply with the National Minimum Wage Act 9 of
2018 (NMWA) by restructuring its employees' payslips to include contractual bonuses and provident
fund contributions. These bonuses were guaranteed and paid either annually or monthly. The General
Workers Union of South Africa, representing its members, contested this practice, arguing that such
bonuses should be excluded from the calculation of the minimum wage as per section 5 of the NMWA.
This dispute was initially brought before the Commission for Conciliation, Mediation, and Arbitration
(CCMA), where the commissioner ruled in favor of the union, stating that bonuses, even if contractually
guaranteed, should not be included in the minimum wage calculation. Quantum Foods subsequently
sought a review of this decision in the Labour Court, which upheld the CCMA's ruling. Dissatisfied,
Quantum Foods appealed to the Labour Appeal Court (LAC).
hbgschindlers.com
Issue(s) in Dispute in the Case
The primary issue in dispute was whether contractual bonuses and provident fund contributions should
be included in the calculation of the minimum wage under the NMWA, specifically in light of section
5(1)(c), which excludes "gratuities including bonuses, tips or gifts" from such calculations.
hbgschindlers.com
The Court’s Decision
The Labour Appeal Court overturned the decisions of the CCMA and the Labour Court. The LAC held that
contractual bonuses, which are guaranteed and form part of the employees' regular remuneration,
should be included in the calculation of the minimum wage under the NMWA. The court reasoned that
the term "gratuities" in section 5(1)(c) refers to discretionary bonuses, not those contractually obligated.
Therefore, excluding guaranteed contractual bonuses from the minimum wage calculation would be
inconsistent with the purpose of the NMWA.
hbgschindlers.com
Legal Opinion and Importance of the Case
The Quantum Foods decision is pivotal in clarifying the interpretation of the NMWA concerning the
inclusion of certain payments in the minimum wage calculation. The court's distinction between
discretionary and contractual bonuses provides essential guidance for employers and employees alike.
Clarification of "Gratuities"
By interpreting "gratuities" to exclude guaranteed contractual bonuses, the LAC has delineated the
scope of payments considered in minimum wage calculations. This ensures that employees receive a fair
wage that reflects all components of their agreed remuneration, aligning with the protective purpose of
the NMWA.
hbgschindlers.com
