Lost annual bonus?
Discussion
My 'friend' has recently given notice to quit to his employer and leaves very shortly having worked the notice required. Meanwhile my 'friend' has earned a 'bonus' on the years work December 04 - December 05. The bonus is always paid dependant upon the overall performance and the bonus has been earned.
However, the Company rules state that the employee must be actively employed at the time the bonus is actually paid out. In my friends case he will have since left the employment. The Company have been late in paying this year owing to pressure of other work.
In my mind the Company have written in an unreasonable requirement within its regulations of employment, afterall no one is disputing that the bonus has been earned.
The Company is a major multi national.
We would be grateful for your views before taking the matter further. Many thanks.
However, the Company rules state that the employee must be actively employed at the time the bonus is actually paid out. In my friends case he will have since left the employment. The Company have been late in paying this year owing to pressure of other work.
In my mind the Company have written in an unreasonable requirement within its regulations of employment, afterall no one is disputing that the bonus has been earned.
The Company is a major multi national.
We would be grateful for your views before taking the matter further. Many thanks.
as far as I know the 'must be employed at time of payment' type condition is quite normal (even if unfair!) - In my old job, commissions and bonus were only paid if you were in employment for at least one month following confirmation of entitlement! Timing of resignations strangely always fell 1 day after actual receipt of monies!
It's clutching at straws but if the company has established a "normal" time for payment of bonuses and if this year they are significantly late (you mention some delay) he might still be able to claim the bonus if he is employed throughout the time they would "normally" have paid out.
The crucial bit is establishing the usual practice. I would say that if they have made the payment at about the same time each year, say within the same two week period, for three years or more then there is an arguable case. Even though they would still be allowed some discretion it would have to be reasonable. Manipulating established practice to the detriment of an employee is a dangerous tactic by an employer and if this is what they have done then they can at least be pushed for payment.
The crucial bit is establishing the usual practice. I would say that if they have made the payment at about the same time each year, say within the same two week period, for three years or more then there is an arguable case. Even though they would still be allowed some discretion it would have to be reasonable. Manipulating established practice to the detriment of an employee is a dangerous tactic by an employer and if this is what they have done then they can at least be pushed for payment.
I have a similar policy in my company. We pay the senior managers a bonus dependent on the company's profit. It's paid two months after our annual audit. If someone leaves before the bonus then they forfeit the bonus. One of the reasons for such bonuses is to incentivise staff not to leave.
cirks said:
as far as I know the 'must be employed at time of payment' type condition is quite normal (even if unfair!) - In my old job, commissions and bonus were only paid if you were in employment for at least one month following confirmation of entitlement! Timing of resignations strangely always fell 1 day after actual receipt of monies!
It's pretty common, I know of some big Accountancy firms and Law firms who operate in that manner.
A lot of them get away with it by wording the award of the bonus as being discretionary (even though it is part of the salary negotiations) up to the point where it lands in your account.
Where I am currently the bonus is based on specific metrics & payable every quarter. If you leave during a quarter you are not elegible for a pro-rated bonus.
I certainly made sure my bonus for my previous years performance had been awarded before moving firms.
Some interesting points made, the company in question is huge and has mega money behind it, and just about everywhere else too.
The bonus is about 4 weeks later in payment then usual, if it were not for that fact he would have recieved the money before he handed in his notice to quit. His not been singled out or anything of that type of situation its just the way his bad luck has run.
Maybe worth a talking to legal then.
The bonus is about 4 weeks later in payment then usual, if it were not for that fact he would have recieved the money before he handed in his notice to quit. His not been singled out or anything of that type of situation its just the way his bad luck has run.
Maybe worth a talking to legal then.
bga said:
I certainly made sure my bonus for my previous years performance had been awarded before moving firms.
Wise words, famous case where I currently am of someone who handed in their notice a few days after receiving confirmation of their bonus amount but failed to check that it had already hit their bank account... amazing how quickly payroll can move when there's £££'s to be saved!
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