Loyalty bonus letter - couple of questions

[Hackney]

My wife recently received a letter from her employer offering her a bonus if she was still working for the company at the end of June next year.

The offer is "subject to the terms of conditions" although these are few and vague.

"In order to be eligible to receive this discretionary bonus payment you must remain in full time active employment with [company] to the date of 30 June 2014"

"in the event that your role were to be terminated by reason of redundancy as a result of any re-organisation of resources ahead of 30 June 2014, then... ...you would also be eligible to receive as an ex gratia payment [the payment]"

So, two questions.
1) would this letter cover maternity leave? Would that be classed as "active employment" or not?
2) what about redundancy in the event of the company going to the wall (not outside the realms of possibility)? If there's no money in the business where would this payment come in the list of debts to be paid? Our guess is just about at the bottom.

Thanks guys

[Bullett]

I would thing 2 is - no chance.
For 1, I'd say 'Active' is the key word.

[SidJames]

Bullett said:

I would thing 2 is - no chance.
For 1, I'd say 'Active' is the key word.

As above, but come on mate, did you really have any expectation that a bonus payment might even begin to be on the list of creditors?

Sorry if that's harsh.

[Hackney]

Not harsh at all.
I didn't expect it in the slightest, just curious as to whether we'd have any legal recourse should the worst happen.

[spikeyhead]

Hackney said:

Not harsh at all.
I didn't expect it in the slightest, just curious as to whether we'd have any legal recourse should the worst happen.

It's a discretionary bonus. You don't have any legal recourse even if the best should happen.

[Slurms]

spikeyhead said:

Hackney said:

Not harsh at all.
I didn't expect it in the slightest, just curious as to whether we'd have any legal recourse should the worst happen.

It's a discretionary bonus. You don't have any legal recourse even if the best should happen.

From what the OP is saying it doesn't look like its discretionary, looks like its contractual.

If you stay you receive a loyalty bonus, not if you stay and we decide at our discretion to pay a bonus you will receive one.

But AFAIK (based on hazy recollections of a briefing from my company HR types) on the topic of maternity leave and loyalty bonuses there was been a legal case around something similar which was won on the grounds on sex discrimination.

I’m sure one of the PH legal types can advise better but I think the equality act from 2010 gives some guidance around bonuses.

[lestag]

Just don't count on getting it under any conditions. Doesn't sound like it is worth the paper it is written on.
Put it another way.

Do you trust the employer?
1) yes = got a good chance assuming company is around in April
2) maybe = really unlikely, probably will try an weasel out of it (current economic conditions etc)
3) no = they are having a laugh trying to keep the employee on.

Is there any history of the employer keeping to their word?

Just my cynical view - I am not lawyer

[jonah35]

Why do you think theyre offering this?
Is it because staff are leaving because theyre worried about their employers financial position or something else? There must be a reason.

[Hackney]

jonah35 said:

Why do you think theyre offering this?
Is it because staff are leaving because theyre worried about their employers financial position or something else? There must be a reason.

There's no doubt they're offering this because a lot of people have left recently.
This is most likely due to share price fluctuations and concerns over that.

[anonymous-user]

The employer would be bound to pay this bonus to a worker on maternity leave if it pays this bonus to other workers. Failing to do so would be discriminatory.

THe payment would not be protected in the event of employer insolvency.

[ChasW]

Loyalty/retention bonuses are not that uncommon. Sometimes an employee or group of employees are critical at a certain moment in time, ie taking on a new customer/contract or during a merger.