Bonus Clawback

[surveyor]

My brother works for a fairly sharkish outfit and needs help!

He has a new job and subsequently gave one months notice. He has rather forced the point as he is on a three month notice period. New employer would not wait that long. Current employer has to be fair worked with it - although their level of compliance in this regard has been surprising.

He has now been told that his current employer is looking to clawback some bonus from his final pay for invoices that have not yet been paid. The bonus scheme is discretionary and if there are any rules no staff have seen then. He has no involvement in the invoice process and as far as he is aware the bonus has always been paid at invoice.

So any views on this would be helpful?

[surveyor]

Vaud said:

So he is on 3 months notice - i.e. either party has to give 3 months notice?

And he wants 1 month.

And they are withholding elements of a discretionary bonus?

Not withholding - he expected no bonus, but actually clawing back bonus paid.

[surveyor]

SteveS Cup said:

Hit post before finishing!

How do you expect his current employer to claw back commission if the invoice doesn't get paid once they've paid him his final payment?

It's not commission(he is not in a sales role) - it is discretionary bonus.

No-one outside of management is aware of how the scheme works, but it is related to the fee earning that the individual carries out. The organisation is not particularly liked by its customers and it's not unusual for them to have to 'persuade' their clients to pay. It is the first time he has heard of clawback.

The proposal is that they will take it out of his final salary.

[surveyor]

SteveS Cup said:

surveyor said:

SteveS Cup said:

Hit post before finishing!

How do you expect his current employer to claw back commission if the invoice doesn't get paid once they've paid him his final payment?

It's not commission(he is not in a sales role) - it is discretionary bonus.

No-one outside of management is aware of how the scheme works, but it is related to the fee earning that the individual carries out. The organisation is not particularly liked by its customers and it's not unusual for them to have to 'persuade' their clients to pay. It is the first time he has heard of clawback.

The proposal is that they will take it out of his final salary.

It's a bonus paid based on an invoice, if the invoice didn't exist the bonus wouldn't... Call it want you want. My administrator gets a bonus based on what we've billed - she has FA to do with sales but it will be clawed back if the invoice doesn't get paid.

Forgetting that he's leaving... If he receives a bonus based on a fee to a company, the client goes tits up and they never receive the fee would they not claw back the bonus that related to that fee?

I don't know where the shock comes from. It sounds like this dodgy outfit has acted professionally and fairly.

To be clear.

1, Never been any suggestion of clawback in the past to brother or any of multitude of leavers.
2. Employee's do not have sight of invoices, nor any involvement in payment process. The bonus bears no relation to revenue in terms of what is invoiced. Each person has no idea of their fee earning.
3. Easy to say not been paid we are helping ourselves to £2k* of your pay. How do you know?

• They've not said how much as yet....

Edited by surveyor on Friday 21st November 21:13

[surveyor]

SteveS Cup said:

They're not withholding a bonus - they want to take back a previous bonus out of his final basic salary payment (from what I understand).

Correect

jeremyc said:

What does his Employment Contract say with respect to the bonus and under what conditions it is paid (or clawed back)?

If it is silent on the matter then I suspect there is nothing he can do.

I've previously had a bonus clawed back from my bank account after leaving. As far as I remember the company's get out was that the bonus was purely discretionary, and that they decided they I had been paid it in error.

I believe (and could be wrong - he's gone to bed!) that it is silent. We've had this discussion in the past and in theory the company could not pay anyone any bonus, although they would not have staff for long.

Sheepshanks said:

...and additionally they have no idea how it works?

What a very strange set-up.

They have vague ideas all related to some sort of performance grid. Exactly how the grid works and how it relates to individual invoices I think is pretty hard to fathom.

As I've said he's not expecting any more bonus. It's clawing back bonus already paid that is the issue.

[surveyor]

Breadvan72 said:

Doncha love the OP suggesting it's the employer that is sharkish when his brother is flouting the contract?

The employer may have either a contractual or restitutionary claim re the bonus, but the facts stated are too skimpy to form a view on. In any event the employer could sue for any extra cost incurred by the employee's departure in breach of contract.

Afternoon Breadvan. I can't name the outfit. If I could you would agree that they are sharkish. I agree brother is slightly out of order, and he is also aware where he stands legally.

What's taken him by surprise is his employers position that they can conjure up rules and dip into his pay. The rules may exist - but they have never been published or staff advised etc.

[surveyor]

A little time has passed and I can give a small update.

He was paid in full at the end of the month. They wanted him to not leave at that point so possibly thought that they would have another pay packet to attach - but his new employer insisted, so they have not got the opportunity.

With regard to the way he has left he knows it's far from ideal, and has adequate protection legally.