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Discretionary Bonus and Resignation

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Hi All,

 

I am looking for some help and advice please.

 

I'm currently employed by a company who have an annual discretionary bonus (which historically has paid out every year) for the period 01-October to 30-September which is subject to performance and meeting objectives etc. For this period I have achieved all my objectives and will be due a bonus payment of approx. 10% which would pay out at the end of November.

 

My dilemma is that I was offered a new role at a different company around the start of October and I have also been made aware that my current employer has guidance documents (posted on their intranet site) which states that any bonus wont be paid to any employees who have resigned and are currently working their notice period.

 

On the back of this, I tried to negotiate retaining my bonus on the basis of working my full notice period (currently 3 months), but was told if I resigned before the bonus payment date (end November), I wouldn't be entitled to anything. As such, I've held of doing anything, but was planning to resign at the start of December (but for a reduced 1 month period)

 

I have now been informed that because I indicated my intentions to leave back in October, that they are going to postpone by bonus payment until end of February to ensure I work my full contractual notice period. Despite the fact that everyone else in the organisation will be getting their bonus paid in November and that I previously tried to agree 3 months notice from October. In essence, they are trying to force me to work a total of 5 months to ensure I get my bonus which covers a period since gone. I understand where they are coming from in trying to protect their position, but I also don't feel this is fair as I had an open and honest conversation with my manager which now seems to have disadvantaged myself ( - I should have kept quiet).

 

My ideal scenario would be to resign following the November payment date and provide a reduced notice period (on the basis that I've been trying to complete my current projects - and expect to have very little to do beyond this date), but would I then be able to claim unlawful withholding of November wages through a tribunal and what chance of success would I have here?

 

I'm keen not to disadvantage my current manager and leave him with no cover, but I feel that the company are doing everything in their power to withhold this and force me to leave without receiving it. In that case, and if I cant retain the bonus am I best to resign with immediate affect?

 

Any help or recommendations on how best to proceed would be greatly appreciated.

 

Thanks

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"discretionary bonus" - nope.

 

ask new employer if they want you early enough to compensate you? A golden hello, if you will.


Never assume anyone on the internet is who they say they are. Only rely on advice from insured professionals you have paid for!

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"discretionary" bonuses are a minefield as ET's have decided that they arent as discretionary as many employers would wish and the abuse of their system by you employer might not go down well with the panel. You were employed at the end of the bonus period and during the qualifying time thereafter so their moving of the goalposts will need some answering.

That however doesnt make it a certainty so you would be better off considering the benefits of the move to the new employer.

i wish I could remember the case law refs to help you but I last had to deal with this over 10 years ago and no longer have the paperwork.

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Thanks both,

 

Ericsbrother, that was my thoughts having done a search online and reading the websites of several solicitors who specialise in this area.

 

My view would be that once they have communicated the bonus amount via email for that period (which would usually be over the next week) that would then qualify as the definition under "wages" which would lead me to the unlawful withholding of wages claim.

 

I suppose it is made more complicated by the fact they could argue they were only following the spirit of their own policies i.e. if I'd resigned before end November, no bonus would be payable so in essence it's a way of enforcing my notice period - even though there is no mention of their ability to do this in the documents.

 

I did try searching for my original copy of my employment contract, but have been unable to find it, so cannot confirm what is/isn't permitted in that, unless I request a copy from my employer.

 

If I did go down the route of an employment tribunal, could they then counter-claim my breach of contract for not working my full notice period or are those two distinct and separate elements? If I lost the claim, I could end of paying their costs too which is a worry - but I suppose that's why most people don't challenge these positions more often.

 

Given my relative position, the fact I'll be closing down and finalising all current work in progress and that I'm not going to a competitor or taking customers, I don't feel they would ordinally pursue me for a shorter notice, but if I force the above issue they may...

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the main thing is they  are trying to move the goalposts as far as qualifying period for you and you alone.

 

As for them counterclaiming that could only happen if your leaving with only a months notice caused them a loss by haing to employ someone they wouldnt have otherwise taken on to do your work ior the business lost money as a result of them not being able to get someone to do it in your absence. now as the comapny didnt go bust when you went on holiday they will ahve a hell of a job arguing that there has been a loss

 

of course you can request a copy of your terms of servcie and the bonus scheme for your employer, that way if they refuse they will be in bother and it will also make them see that you might be looking into this more than they find comfortable

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