HEINEKEN Beverages loses Labour Court battle over withholding bonuses from striking workers

The Labour Court in Cape Town has delivered a significant judgment strengthening protections for workers who participate in protected strike action.

On Monday, Judge André Lagrange ruled that HEINEKEN Beverages acted unlawfully when it withheld short-term incentive (STI) bonuses from 39 Solidarity members because they took part in a two-day protected strike in February 2023.

In a detailed 60-page judgment, the court found that HEINEKEN breached sections 5(1) and 5(2)(c)(vi) of the Labour Relations Act (LRA), which prohibit employers from discriminating against or prejudicing employees for exercising rights conferred by the Act, including the constitutional right to strike.

Judge R Lagrange's ruling orders the multinational beverage company to disclose how the 2023 STI bonuses were calculated and to pay the affected employees the bonuses they were denied.

The case centred on HEINEKEN's refusal to pay the incentive bonus to Solidarity members after they engaged in a protected strike to demand organisational rights. Non-striking employees, meanwhile, received the full STI bonus after the company’s board approved the payout in June 2023.

Solidarity argued that the employees met all the qualifying criteria for the bonus except one: they had exercised their right to strike. In the union’s view, withholding the STI solely for this reason amounted to unlawful discrimination and an impermissible act of victimisation under section 5 of the LRA.

HEINEKEN, however, insisted it acted lawfully. The company argued that its STI policy, which pre-dated the strike and explicitly disqualifies employees who participate in industrial action, allowed it to withhold payment, alongside other disqualifying factors such as misconduct and underperformance. 

It argued that the decision to withhold STI was aimed at preserving operational stability and was neither arbitrary nor actuated by improper motives.

The company further contended that using the STI scheme in this manner was not punitive but a legitimate exercise of managerial prerogative within the context of collective bargaining. It cited case law permitting employers, in certain circumstances, to reward non-strikers as part of economic pressure tactics.

But Judge Lagrange rejected this justification, finding the company failed to meet its burden of proving that the differential treatment was rational, proportionate and connected to a legitimate purpose.

Under Labour Appeal Court precedent, most notably Safcor Freight and Cullinan Diamond Mine, an employer may, in limited circumstances, reward non-strikers or impose economic measures during a strike, but only where the measure is a suitable and proportionate response to the strike and aimed at protecting business operations.

In such cases, the employer bears the onus of showing its actions were justifiable and not motivated by improper or punitive intentions.

In HEINEKEN's case, the judge held, the company failed to demonstrate this.

“The defendant provided no details of the impact its denial of the bonus would have on strikers or on incentivising workers not to strike,” Lagrange said.

He highlighted that the strike lasted only two days and was limited to Solidarity members seeking organisational rights — a dispute unlikely to draw widespread participation from the broader workforce.

HEINEKEN also provided no evidence that withholding the STI was necessary to preserve operations, nor that its actions were proportional to the effects of the brief strike.

Instead, the court found that employees were informed in advance that participating in the strike would automatically disqualify them from receiving the STI bonus, a position that the judge said required deeper justification than Heineken offered.

“There was no explanation why it was considered a proportionate response to completely deny strikers the bonus when the strike ended after only two days,” Lagrange ruled.

“In the circumstances, I am not satisfied HEINEKEN has provided an adequate defence to justify why withholding the STI bonus was not in breach of sections 5(1), 5(2)(c)(vi) of the LRA.”

The judgment also clarified an important point: although previous cases held that employers may offer incentives to non-strikers under specific conditions, this does not give employers blanket permission to withhold existing benefits from strikers without justification.

Section 5 of the LRA remains a substantive safeguard against measures that penalise workers for exercising collective rights.

The court ordered HEINEKEN to provide Solidarity with a full accounting of the STI formula and supporting documents within 30 days, and to pay the affected workers their 2023 bonuses within 30 days thereafter. No order for costs was made, in line with Labour Court practice.

The outcome is likely to influence how employers navigate discretionary bonus schemes during periods of industrial action. Judge Lagrange warned that companies cannot simply rely on broad policy wording to justify denying benefits to strikers.

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