Discretionary bonus / good leaver policy
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A company operates a discretionary bonus policy. This is paid on a specific date every year. Rules are that you can’t be on your notice on the date it is paid, otherwise it is forfeited.
There also appears to be a “good leaver policy”.
A “good” leaver would include someone who is retiring. Doesn’t matter if they have been off sick the whole year, the bonus is paid. If said retiree goes on to work again straight after “retirement”, it makes no difference to the bonus being paid.
A “bad” leaver gets nothing, even if they’ve put in a stellar performance.
Could this be seen as discriminatory on the basis of age? How could a “bad” leaver maximise the chance of getting the bonus paid?
A company operates a discretionary bonus policy. This is paid on a specific date every year. Rules are that you can’t be on your notice on the date it is paid, otherwise it is forfeited.
There also appears to be a “good leaver policy”.
A “good” leaver would include someone who is retiring. Doesn’t matter if they have been off sick the whole year, the bonus is paid. If said retiree goes on to work again straight after “retirement”, it makes no difference to the bonus being paid.
A “bad” leaver gets nothing, even if they’ve put in a stellar performance.
Could this be seen as discriminatory on the basis of age? How could a “bad” leaver maximise the chance of getting the bonus paid?
Edited by Irish_Stu on Sunday 28th November 09:02
Edited by Irish_Stu on Sunday 28th November 09:10
The clue's the name - discretionary.
The company can choose to pay it or not and specify the rules around payment. There may be strategic or operational reasons why they'd rather not have people leaving during the period that bonuses are paid, so this is used as an incentive to avoid that.
And if someone retires then any bonus that applies to them will be based upon their life with the firm not their final months. It would be mightily unfair for someone who's put in 20 or 30 years of graft to be denied a bonus because they were off sick for a few months before they retired. And what they do after retirement has no bearing on this at all - why should it?
So on the basis of what you've explained, unless there's something else, I can't see anything that the company is doing that's wrong.
The company can choose to pay it or not and specify the rules around payment. There may be strategic or operational reasons why they'd rather not have people leaving during the period that bonuses are paid, so this is used as an incentive to avoid that.
And if someone retires then any bonus that applies to them will be based upon their life with the firm not their final months. It would be mightily unfair for someone who's put in 20 or 30 years of graft to be denied a bonus because they were off sick for a few months before they retired. And what they do after retirement has no bearing on this at all - why should it?
So on the basis of what you've explained, unless there's something else, I can't see anything that the company is doing that's wrong.
Irish_Stu said:
Asking for a Friend…
A company operates a discretionary bonus policy. This is paid on a specific date every year. Rules are that you can’t be on your notice on the date it is paid, otherwise it is forfeited.
There also appears to be a “good leaver policy”.
A “good” leaver would include someone who is retiring. Doesn’t matter if they have been off sick the whole year, the bonus is paid. If said retiree goes on to work again straight after “retirement”, it makes no difference to the bonus being paid.
A “bad” leaver gets nothing, even if they’ve put in a stellar performance.
Could this be seen as discriminatory on the basis of age? How could a “bad” leaver maximise the chance of getting the bonus paid?
It's a "discretionary" bonus. I'm not sure what the Good/Bad/retiring Leaver has to do with it. Based on what you have said they could theoretically choose to pay somebody who was a bad leaver and NOT pay somebody who was termed a "good" leaver.A company operates a discretionary bonus policy. This is paid on a specific date every year. Rules are that you can’t be on your notice on the date it is paid, otherwise it is forfeited.
There also appears to be a “good leaver policy”.
A “good” leaver would include someone who is retiring. Doesn’t matter if they have been off sick the whole year, the bonus is paid. If said retiree goes on to work again straight after “retirement”, it makes no difference to the bonus being paid.
A “bad” leaver gets nothing, even if they’ve put in a stellar performance.
Could this be seen as discriminatory on the basis of age? How could a “bad” leaver maximise the chance of getting the bonus paid?
Edited by Irish_Stu on Sunday 28th November 09:02
Edited by Irish_Stu on Sunday 28th November 09:10
The bad leaver could maximise his chances of getting paid primarily by not being a bad leaver.
I got caught out with this earlier this year, when I meant caught out I mean expected my bonus but got caught in the "discretionary" hole.
16 years with one of the biggest logistics companies in the world, bonus for calender year (Jan to Dec) is paid in April.
I'm the past as long as you were employed on 31st December then you got the payment.
I handed my notice on on the 1st December 2020) I asked to leave early (3 month notice) and they agreed 1.2.21, then with Brexit they asked if I could stay a little as I was involved in EU transport, rang new employer who agreed on 22.2.21, all good and old company appreciated it.
Fast forward April 21 and I get no bonus paid for 2020 from my old place (circa £9k) I questioned with HR and got told that I had to be employed on the date it was paid or the very least the month, I questioned this with my contract and was told the bonus was discretionary anyway and the rules had changed.
Was a bit gutted after 16 years service and staying the extra few weeks but you live and learn! My team got the payment!
16 years with one of the biggest logistics companies in the world, bonus for calender year (Jan to Dec) is paid in April.
I'm the past as long as you were employed on 31st December then you got the payment.
I handed my notice on on the 1st December 2020) I asked to leave early (3 month notice) and they agreed 1.2.21, then with Brexit they asked if I could stay a little as I was involved in EU transport, rang new employer who agreed on 22.2.21, all good and old company appreciated it.
Fast forward April 21 and I get no bonus paid for 2020 from my old place (circa £9k) I questioned with HR and got told that I had to be employed on the date it was paid or the very least the month, I questioned this with my contract and was told the bonus was discretionary anyway and the rules had changed.
Was a bit gutted after 16 years service and staying the extra few weeks but you live and learn! My team got the payment!
Where i worked part of the annual bonus was retained and paid out in 3 annual tranches. Good leaver / bad leaver made no difference to the annual bonus. You got the bonus if you employed at bonus date based on annual performance. So most resignations happened on the dsy bonuses hit the bank account.
However only good leavers received the future retained bonuses.
Good leaver was not allowed to be employed at a list of alternate employers seen as competition.
However only good leavers received the future retained bonuses.
Good leaver was not allowed to be employed at a list of alternate employers seen as competition.
Camelot1971 said:
Retirement has nothing to do with age these days.
Thats an interesting point. If i leave a job at age 40 and say i'm retiring how is that different to just leaving the job with no other job lined up. Administratively its the same for the employer, i would think.NortonES2 said:
This is why people resign on September 1st where I used to work as bonuses are paid in the August payroll.
Similar with my employer. Paid out in september payroll, and since early October there has been a steady stream of people leaving/turnover.The most important point to understand - life is not fair.
There is usually something in the retirement policy that restricts you immediately going into another job. Most companies will require some form of attestation before you can be considered a retiree.
Depending on how brave they feel, age can form part of the criteria - Not many would insist on 67, but you may have to be over 55 which is the earliest age you can access a pension. However, I guess if you could demonstrate how you would fund the rest of your life without further employment, they would likely back down & settle.
As above though - its up to the leaver to understand the rules & work around them. I too have had new employers pay me in lieu of bonus forfeited by resigning early. You really can't assume anything, or cry too much afterwards if you didn't get clarification & get burned - refer to my first point - life is not fair.
There is usually something in the retirement policy that restricts you immediately going into another job. Most companies will require some form of attestation before you can be considered a retiree.
Depending on how brave they feel, age can form part of the criteria - Not many would insist on 67, but you may have to be over 55 which is the earliest age you can access a pension. However, I guess if you could demonstrate how you would fund the rest of your life without further employment, they would likely back down & settle.
As above though - its up to the leaver to understand the rules & work around them. I too have had new employers pay me in lieu of bonus forfeited by resigning early. You really can't assume anything, or cry too much afterwards if you didn't get clarification & get burned - refer to my first point - life is not fair.
Freshprince said:
Can’t you just say you’re retiring? Or is that some sort of official status that is only given by achieving X?
Sometime not saying you're retiring can work to your advantage. You probably won't be offered gardening leave whereas you might if they think you're going elsewhere.Freshprince said:
Can’t you just say you’re retiring? Or is that some sort of official status that is only given by achieving X?
Some companies have criteria others it's a signed declaration - or both. They may also ask for something longer than your contractual notice, which wouldn't be a problem for actual retirement.....Of course you can lie etc but if you have anything like deferred stock you are liable to lose it - and they may come after you for any payment that you wouldn't have otherwise received.
Clearly circumstances change, so if you took a part time job at a charity in 6 months, then no issue, but it you show up at a competitor next week, then expect some problems. Don't forget that your new company won't like the fact you lied to your old one - even if they are competitors.
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