Hi, I have a labour law question.

My full-time employment contract states that I will be paid "Basic Salary ​R75,000 ​(monthly) with annual equity incentive. Target total compensation of R80,000 - R85,000 per month including equity component."

Almost 9 months into my contract, the basic salary is being paid but there is no sign of the equity component.  Am I justified in demanding that it be realised?  I suspect I may not be the only employee in this position.

Best regards,

Tony

Hi there and thank you for your question,

I am a practicing attorney based in South Africa and I will assist you with your question. Please feel free to ask as many follow up questions in order to clarify your question. If you have a new question, you must please open a new thread.

So your question is actually more of a contract question (grounded in a employer/employee relationship) rather than a straight labour law question.

Because this is a contract, you are entitled to enforce the terms of the contract. If the other side does not comply, it is a breach of contract and then you would have certain remedies available to you. 

The one concern that I have is that I think that the clause is vague. 

How do you apply it? What is an "incentive"? How do you measure that on a monthly basis? It requires is a very subjective assessment by the company!

I see that there is a "target" compensation recorded, but that doesn't get you out of the fact that there is no objective formula that can be applied by a Judge. e.g. Your salary is basic plus 1% of turnover. 

That would entail an objective test being performed. Your calculation is very subjective. 

At the end of the day it all really comes down to "what was the intention of the parties?" If the intention was clearly that you should benefit from an equity stake each month (a share of the profits) then you must demand that. You need to assert your rights to it, no matter that it is subjective as to how it is calculated.

I always say, the squeaky wheels get the oil.

If there is a part of the answer which you need more advice on, or clarity please continue in this same thread instead of opening a new question.

Att. Patrick

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