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Company Bonus Scheme - employment law


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Hey guys

 

Bit of an interesting one. The place I work tries to act like the new Google, and as such has a bit of an ill-considered bonus scheme. Details of it were released about 5-6 months ago on a single side of A4 that was given out after several meetings (one private, one to the company workforce as a group). There has never been a bonus scheme previously, and never any communique further aside from monthly "we're doing this well" updates given verbally.

 

On the A4 sheet there are details of what the bonus amounts to (basically it's staggered sales targets in the calendar year of 2008, from Jan 1st to Dec 31st), when it pays out (50% on a date in January 09, 50% on a date in Feb 09), and what each bonus milestone will pay out. There is nothing on the paperwork that says anything about what happens if someone leaves early, etc etc.

 

I'm likely that I'm going to be leaving (after giving proper notice) before one of the payout dates if not both payout dates, but I'll be an employee for ALL of the 'examination' period of 1st Jan to 31st December 08. I've googled this to death and spoke to several HR advisors who say that most companies will try to shaft me out of the bonus but that given the lack of clauses, past customary practice etc, I'm in a good position and I'm prepared for a fight if that's what it takes because the bonus is worth pursuing.

 

What does everyone else think?

 

Thanks again guys.

 

K

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Hi Kefz. Have you put your notice in yet? If not, put a paragraph in it to the effect that you will be expecting your bonus payment to be included in your final salary (attach a copy of the A4 sheet as well just to remind them). They may put up a fight, but have a good look through your employment contract as it may have a nugget or two that would help.

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Hi Trilby

 

Many thanks for your help. I've not drafted it yet but just had a meeting where I was told that I will not receive the bonus payouts if I am not an active employee on the payout dates. As I argued, this is not included or even insinuated in the bonus paperwork and they are actually denying that the paperwork effectively becomes a contractual obligation to myself!

 

I'm raising this as a formal grievance but the rationale seems to be to keep me here until the end of Feb. Any ideas?

 

K

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Hidden somewhere deep I should imagine is something that says that the bonus will only be paid to those who are still in active employment. Unfortunately, I don't think there is anything in employment law to force them to cough up.

 

However, have a look at this link to see if there is anything helpful there

 

UK Employment Law - Commission and bonus schemes

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I've spoken to a solicitor c/o our Halifax insurance and the results are very promising. Apparently the route I've taken is exactly correct, namely:

 

1) Raising the issue in a meeting

2) Raising a grievance as a result of the lack of satisfaction in the above, arguing that the company bonus isn't discretionary based on paperwork attached to the bonus, and the lack of custom and practice, plus the warning of anticipated breach of contract/unlawful withholding of earnings (bonuses considered to be contractual become wages under the Employment Rights Act 1996 (section 27)).

3) Awaiting feedback before it gets taken further.

 

Her words outside of the above were that our argument should be that the payout date of the bonus is irrelevant since the money is 'earned' whilst an employee throughout the period of 2008. In a way it would be like finishing with an employee half way through a month, expecting the 1/2 month pay at the end of the month on normal paydate, only to be told you aren't allowed the pay because you weren't an employee at the time.

 

My advice to anyone in the same or similar boat would be to look to see if your house contents insurance covers you for legal cover in these situations - mine is a reasonably petite package with the Halifax and it does absolutely, and they've been great and have said that they will file a claim against the company for me if it gets that far.

 

HTH someone out there!

 

K

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Been asked to go in for a meeting, probably this week to 'discuss my issues'. Not sure if this is grievance related but will be making notes and following up with an email to confirm no matter what happens!

 

K

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I am not an expert or anything but thought I would just say that I work for a very large organisation which has a good bonus scheme but whenever people resign they always resign after they have received their bonus because even a large company like mine will refuse to pay the bonus otherwise!

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At risk of sounding provocative, but I have absolutely no doubt that

 

a) it's prudent that you should leave after payout to avoid the mere risk of this and also

b) a lot of companies will try it on if you do leave and they can try and dodge it

 

But that doesn't mean to say that you should roll over and take it in that event. Storage, in that case you'd be at a disadvantage since obviously the terms of your bonus would be clear that it's up to them if you leave .. unless obviously there are circumstances where that might not apply, ect ect ect.

 

K

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The company that I work for states quite categorically, in the terms of employment, that bonus will only be paid to employees who are actually employed on the date that it is paid.

 

Good luck with your claim.

 

Regards, Rooster.

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Hi Rooster

 

Again I think that's fair point and just about done and dusted if it's either in your terms of employment or in the bonus agreement/documentation - but if it's not agreed then the point of the matter is that there's a question/expectation there that hasn't been met.

 

In your case it'd be like saying 'oh well actually on top of the existing stipulations for collecting it, you also must be an employee for 28 days after the date of payout'. Agreeing basic principles at the start is one thing, adding a second set of principles when it suits is another really ...

 

Cheers

 

K

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Just an update - the company I work for have agreed (in writing) to payout both bonus milestones without the need for a solicitors letter! I hope this thread hopes anyone else having a similar issue.

 

K

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