Short Term Service Dismissal and Unpaid Bonus

[chaoticj]

Hi all,

 

I'd be really grateful for some advice on the following please..

 

Email 'Subject to Contract' from July 2015 gist as follows:

 

1. Annual basic salary of £XX,XXX

2. Annual performance related bonus of £XX,XXX (providing OTE of £XX,XXX). As discussed, your first quarter's OTE of £X,XXX will be paid to you regardless of the sales achieved during this period subject to satisfactory completion of the three month probationary period.

3. Statutory holidays plus 20 days per annum vacation.

 

Official working base XX, formally confirm acceptance of this post and a full contract of employment will be drawn up.

 

Accepted and started the job beginning of September 2015.

 

- No contract supplied despite the email from July 2015 and me asking for one both verbally/in writing on more than one occasion.

 

- No performance reviews or final performance review, probationary period end was at the beginning of December 2015.

 

First meeting late January 2016:

 

With line manager and another senior manager, not told what it was about - titled 'review', no notice/time to prepare and not informed of right to be accompanied.

 

Told I was not being sacked or dismissed just that my probationary period was not being extended; this was purely due to the financial position of the company - a restructure which affected other members of staff. I'd receive two weeks' notice instead of the statutory one week.

 

I said I did not agree, that I had already passed the probationary period as I had not been told otherwise or had any performance reviews. I was then told there were business reasons for the delay (business owners compassionate leave).

 

Got slightly heated and asked how much longer I'd be working for the company, I was told to go home and to come back the next day.

 

Second meeting late January 2016:

 

Told it was just a normal day then had a meeting with senior manager and someone external HR (on their side), offered right to be accompanied but as I'd only been there a short period of time I didn't ask anyone.

 

Same position from previous day reiterated, HR told me I should have requested performance reviews myself. I asked at end of meeting for payment of my £X,XXX bonus as it wasn't dependant on sales but simply passing the probationary period and also a months notice as that would be usual for a position such as mine.

 

The meeting was adjourned to ask the MD, was told that I had failed my probationary period due to performance reasons (the only condition on payment of the bonus and in contradiction to the previous days meeting)..

 

- Not provided with copies of any meeting notes despite asking for them verbally.

 

- Formally requested payment of the £X,XXX bonus via email - two week deadline - now passed.

 

- Dismissal letter states I failed to achieve the responsibilities outlined in my job description and gives an example of failing to delivery a commercially driven strategic growth plan.

 

- Appealed the dismissal at the beginning of February stating points above, crux was as I had not been informed I had failed the probationary period and there was no contract stating it could be extended I am deemed to have passed it and the bonus should be paid.

 

Regarding poor performance example, I created the strategic plan in the first couple of weeks of my employment, was decided after a week I'd be responsible for less than the job description how could I deliver something I wasn't fully responsible for?

 

Had been given a really slow old computer only sorted mid November 2015, systems not in place/being set up despite me raising this - which was taking up considerable time daily and insufficient stock of best selling products etc. I asked for further details as to why I'd failed.

 

Attended an appeal meeting

 

Couple of weeks later, accompanied by a colleague after great effort. Meeting consisted of the managing director asking me lots of questions and only asking me toward the end if I had any points to discuss (points from my appeal not fully discussed). They took a picture of my notes and I took one of theirs.

 

Appeal outcome

 

Dated same day of appeal meeting - original dismissal decision upheld, saying I did not meet the expectations and responsibilities of the role as detailed in my job description. Especially prevalent in areas of leadership, management and dealing with workplace issues and challenges. They also say I acknowledged my role did not materially differ from non-managerial junior colleagues.

 

Just wondering how best to go about getting the bonus I was promised? I've waited a couple of weeks since the appeal to make sure I get the rest of my outstanding pay, I've had the pay slip so it should be in my bank Monday. I have spoken to acas a few times but they give differing advice..

 

I've been told I can go to acas early conciliation for free, if the employer refuses or it doesn't work out I could then take them to a tribunal at a cost of £400 - may be paid back to me if I win. Unfair dismissal is unlikely as I have short service, wrongful dismissal and non payment of wages may be possible but I'm told it is my word against the employers due to not having a companion in the first meeting.

 

I've also seen online I could take them to small claims court for the £X,XXX bonus and someone else had mentioned about submitting a statutory notice for winding up (but I'm not sure if that is more for freelance people rather than employees). Is it worth making a SAR to my employer at all?

 

Sorry for length! Thanks in advance,

chaoticj

[ericsbrother]

I would take the matter to ACAS and get their view on the meaning of the letter of employment and whether you had completed the probationary period as that seems to have been completed before all of this blew up. they can then talk to the meployer and get their take on why the unsatisfactory probation only seems to come about retrospectively and then do their job of mediation and you ight get the movemnt you want regarding the bonus. Ifthe employer is intransigent on this point you can sue for brach of contract in the small claims track in the county court. This is a better path for you compared to the ET route as it is cheaper and you have less hoops to jump through and are after a fixed amount rather than a decision. The letter of appointment will be the contract if you werent supplied with another one , along with the aspects of employment and common law that would apply to any job.

 

the winding up notice you mention applies If you win and they dont cough up

[Sidewinder]

Good advice above, as you do ultimately have a reasonable chance of a successful claim (in my opinion) should the mediation not work out. The employer had ample opportunity to extend your probation before it expired, either on the grounds that your work was not satisfactory, or for the financial position of the company, or the owner's compassionate leave. In not doing this they appear to have sought to invoke a clause which was not present in the only contract that you received, namely that they could extend the deadline after the three months had elapsed.

 

I think that there is some relevant case law in Przybylska v Modus Telecom Limited which might help you with a Court claim. In that case, the claimant was subject to a three month probation after which she would be entitled to three months notice rather than one week. The probation period ended without the employer extending it prior to the three month deadline due to the employee being on holiday, and the employer dismissed the employee three weeks later, paying only the one week's notice. The Tribunal dismissed the claim, however the Appeal Tribunal overturned this decision.

 

A summary of the Appeal Judge's decision (from another site - http://www.shepwedd.co.uk/knowledge/extension-probationary-period-must-be-made-within-probationary-period is below:-

 

Extension of Probationary Period must be made within the Probationary Period

The EAT, in Przybylska v Modus Telecom Ltd, has found that an employer cannot imply a contractual term to extend a probationary period in order to carry out a performance review.

 

It was held that the employer was only allowed to extend the probationary period if it informed the employee of the extension during the probationary period, even if circumstances made it impractical to carry out a performance review before the end of the probationary period.

 

Facts

The employee was dismissed after failing her probationary period but was not informed of the decision until three weeks after the probationary period had ended. She was, therefore, entitled to three months notice rather than the one week that would have applied if she had been informed of the decision within the probationary period.

 

Impact on employers

Depending on the terms of the employment contract, employees are likely to have increased notice rights (and perhaps the right to receive certain contractual benefits) after the probationary period has expired. Where an employee’s performance is unsatisfactory, the employer will need to extend the probationary period or dismiss the employee before the probationary period (or any extension) has ended. Otherwise, the employer is likely to have to give a longer period of notice to terminate their employment.

[chaoticj]

Thanks to you both ericsbrother and Sidewinder - I am doing as suggested. Very interesting and relevant case excerpt.

 

I have also done a bit more research and found on the website DueDil that my ex-employer filed accounts at the end of February - would this be considered relevant to back up being told I was dismissed for company financial reasons in the first meeting I had? (should this go to court).

 

Thanks again in advance.

[chaoticj]

Hi,

 

Just to update, ACAS were chasing my ex employer for an answer and they said that they had been seeking legal advice etc. and that the business owners had been away again.

 

They got in touch the day before the 1 month deadline and asked for a 2 week extension. I reluctantly agreed.

 

They have now come back to ACAS 1 week into the extension offering £500 of the £2,500, they have provided 2 pages as to why the £2,500 bonus payment is not due as I did not complete satisfactory probation. That we had an appeal meeting and the reason for the delay was business owners compassionate leave.

 

As it will cost to defend a tribunal claim their offer is £500.

 

I can reject, counter offer or accept.

 

The £500 is an insult so I won't be accepting. I have asked for a copy of the information submitted to ACAS and I'm told ACAS will ask if it can be shared with me but my ex employer is under no obligation to agree.

 

I am thinking it may be worth making a counter offer taking into account what some of my time is worth - say £2250 but I am very doubtful my ex employer would accept this?

 

If anyone has any advice that would be great.

 

Thanks in advance

chaoticj.

[ericsbrother]

The case law sidewinder mentions has been interpreted to include bonus schemes being part of a contractual obligation rather than a stand alone but I cant remember the details (was brought up in an ET hearing at Croydon I attended) so I reckon that is pretty solid ground.

The poor behaviour of the employer will not be taken into account when things are formalised to giving them extra time doesnt make you look any better than them so would I be making a counter offer? maybe knock it down to £2499.

Many small employers have insurance to cover their legal costs for employees taking them to an ET but that probably doesnt apply to using the county courts small claims track so it will cost them proper money to defend a claim properly and without much of a leg to stand on they will have to pay a decent whack to get an employment law lawyer to present and that will be in the order of £800 to turn up on the day and probably double that for the homework. All in all they will be no better off fighting this compared to paying up but pride and arrogance do often get in the way of reason so dont expect any sense at this stage but a sudden refocussing when they get the N1 claim form.

Let ACAS know that you are considering what they say but point out that you are happy the case law of P v Modus Telecom applies so see no reason to change your position to any great degree and see if they come back with a considered offer.

[chaoticj]

Hi ericsbrother,

 

Thanks a lot for your great advice which I'm going to follow.

 

chaoticj

[chaoticj]

Hi,

 

The ex-employer has now got back to ACAS with an updated offer of £1,500 (this is in response to my counter offer of £2,499 and information regarding P v Modus Telecom) they have said that if you look into the case law - the EAT is unclear.

 

They state I did not pass my probationary period and as I was aware there were extenuating circumstances at the time for the review not having taken place i.e. what they have been repeating over and again.

 

Obviously, I have a strong position otherwise they wouldn't be increasing their offer.

 

What I am wondering is, if this goes to small claims and I do win, I believe they would have to at least pay my court fees - what about the time I might spend in preparing for the case etc? is compensation for this at the discretion of the judge / awarded only if the employer is deemed to have acted unreasonably?

 

I'm just thinking if there are potentially costs I might not be able to get back, might it be worth making another counteroffer taking this into account?

 

Other than that, I guess the next step would be to issue an LBA with two weeks deadline to pay?

 

Regards,

chaoticj

[donarebun]

Hi,

 

You have to either make a counter offer or accept their offer.

 

I would make a counter offer of £2000 while pointing out the weakness in their defence.

 

Going to court could be stressful and for a £500 difference it might not be worth it.

 

All the best

[chaoticj]

Hi donarebun,

 

Thanks for your advice - I have made a counter offer of £2,400 as I have considered the time it might take me to go to court - but that it should be relatively straightforward to lodge the claim etc.

 

Let us see what happens now then!

 

Funnily enough, I do already have a copy of the Small Claims Procedure book (though I haven't had enough cause to use it yet!)

 

Regards,

chaoticj

[chaoticj]

Hi,

 

They have made another counter offer of £1,750 (ha!) which is apparently subject to agreed COT3 terms - what does that mean?

 

Regards,

chaoticj

[Sidewinder]

That would be a legally binding agreement whereby you accept the offer and give up any rights to any future action against the employer

 

You would need to get a solicitor to look over the agreement - employers will usually pay for this. If you are looking at accepting a negotiated settlement it would be a good idea to get an greed or neutral reference built into any agreement

[donarebun]

Try and get an agreed reference built into it, neutral ones are at best useless at worst raise suspicion about you.

 

In the last one I did I had the non-disclosure bit removed, I would suggest it but I did it for religious reasons so I don't think that would work for you if you are not religious.

[becky2585]

A COT3 Agreement is a binding agreement which has wording agreed by the parties and which ACAS put on their standard COT3 form. Usually it contains confidentiality provisions, and a waiver of current and future claims as a minimum. An agreed reference can also be attached.

 

You don't actually need to take legal advice from a solicitor on a COT3, but before agreeing any wording (even verbally) it's worth doing so. Just remember that a verbal agreement with ACAS is legally binding so be careful what you say.

 

I take the opposite view re references - a standard basic reference confirming job title and dates of employment is usually sufficient. It's all I would get from my employer. Overly glowing references scream "settlement agreement!" To me!

[ericsbrother]

truth is they know they have a weak case but dont want to give you that impression so are offering enough to make you think about it. If they thought they were on to a winner they would offer £200.

Court costs? depends on how the judge views the behaviour of the parties involved. If one sided bad behaviour (let us say employer) then a claim for full costs would be considered and you can them ask for LiP research time costs of 5hrs @£19ph or solicitors fees, loss of earnings for the hearing, postage, travel to court and maybe to ACAS etc. If no particular bad behaviour you wil get what you actually spent on the claim and nothing else, so allocation fee, travel and lost earnings for the day being about it.

[chaoticj]

Hi,

 

Thanks a lot everyone for the helpful advice. I will take my ex-employer to small claims court - what is the next step, should I be writing a letter before action?

 

Interestingly they have contacted me directly via email wanting me to call them at my soonest convenience to discuss my claim? A bit strange?

 

Thanks,

chaoticj.

[ericsbrother]

up to you but I would email them back and say that you require any future communication in writing so you wont be phoning them any time at all. Do not get into any lengthy correspondence, let them say thei bit and do not respond unless they offer somehting acceptable. Anything else should just get the response of "your communication has been noted"

[chaoticj]

Hi ericsbrother,

 

Thanks for the sound advice, I've done as you suggested and haven't heard anything back although to be fair it has been the weekend.

 

I have prepared a Letter before action - does this sound OK? The deadline for payment will be 14 days from sending the letter, which will go first class recorded delivery.

 

 

 

 

9th May 2016

 

Letter before action - RE: Unpaid bonus of £2,500

 

Dear Sirs,

 

As you are aware I was employed in the position of XXXXX from XX September 2015 until XX February 2016.

 

As part of my written statement of employment particulars provided via email by XXXXX XXXXX on XX July 2015 (copy enclosed) my first quarter’s bonus of £2,500 was to be paid regardless of the sales achieved during the period subject to satisfactory completion of the three month probationary period.

 

As my three month probationary period ended on XX December 2015 and the first quarter on XX December 2015 the bonus of £2,500 should have been paid to me on XX January 2016.

 

After an initial meeting on XX January 2016 with XXXXX XXXXX and XXXXX XXXXX where I was told that I was being dismissed due to the financial position of the company and not for any other reason, I formally requested payment on XX January 2016 via email to XXXXX XXXXX and XXXXX XXXXX, within two weeks (copy enclosed).

 

It was then retrospectively stated I had failed my probationary period for performance reasons. In the absence of any performance review, full contract and with the written statement of particulars not offering a clause for probationary period extension, I am considered to have passed the probationary period.

 

The £2,500 bonus as yet still remains unpaid and unless I receive payment from you immediately and in any event no later than close of business on XX May 2016, I shall start a claim against you in the County Court without giving any further warning.

 

When I have started the court action I shall be entitled to claim from you in addition to the unpaid bonus, the court fee (£105) plus statutory interest which is calculated at 8% per annum.

 

I do hope that this matter can be resolved without having to issue proceedings against you and look forward to receiving payment as soon as possible.

 

Yours faithfully,

XXXXX XXXXX

 

Enc:

[ericsbrother]

Start letter "letter before action under the civil procedure rules"

give them a time limit to pay, 14 days is enough (last line of your letter)

[chaoticj]

Hi,

 

I have not yet sent the letter before action and they have replied to my email asking for communications in writing. Essentially with a £2,000 offer which is much closer to what I am after however my last counter offer was £2,400.

 

They say we are now a lot closer to resolving the matter. They reiterate my not passing probation and in mitigation for the delay they say they have legitimate compassionate factors. They say that the record of the appeal hearing shows the probationary period was not satisfactorily completed, the key word being satisfactorily.

 

They also cite a mistake I made some time after they had told me I was being dismissed (genuine human error that cost them financially) and say this is further evidence. They say that the offer is a long way from their initial offer and closer to mine and so my claim will have been more or less satisfied and that an employment tribunal could take months.

 

My feeling at this point is they should really just be paying my last £2,400 counter offer.. if I was to proceed with court action is there a possibility I could become liable for their costs (legal or otherwise)?

 

Thank you so much in advance,

chaoticj

[donarebun]

Hi,

 

Honestly I would say take the money now but I have a feeling you don't want to.

 

So I suggest you make a counter offer of say £2,200.

 

You don't want to go to court worried if the Judge would award cost against you because you were unreasonable.

 

Life is give and take sometimes

[ericsbrother]

If you lose the claim in its entirety you could be liable for their costs of defending the court claim but that will be about £50 plus travel costs as they only costs they can claim for is the solicitors fee for turning up and presenting their case. If they make a formal offer and you reject it and the court decides you are due that amount or less then you will agin be liable for costs. If the court decides you have been malicious or vexatious they can award full costs and then they will claim for their time preparing paperwork, directors time discussing the case over a game of golf etc.

If you are seriously considering this offer them ask that they make it formally in writing and unconditional.

[ericsbrother]

ACAS can draw up a formal agreement if one is seen as being necessary

[chaoticj]

Hi,

 

Just to update - settled at £2,200 via ACAS with a COT3 agreement. All done, dusted (and paid) now.

 

My offer was accepted about two hours after my former employer received my LBA in the post..

 

Thanks to all CAGGers for your help particularly ericsbrother.

 

Regards,

chaoticj

[donarebun]

Congrats, and well done.