Can my employer change the bonus/commission model however and whenever they want?

ivorystraws

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Hi,

I work in a role that pays out incentives in the form of a bonus and/or commission which is dependent on performance against certain targets. At the beginning of each year, we review and sign two documents, an admin guidelines document and a separate document detailing the plan for the year along with targets etc.
In the admin guidelines document, it states that my employer "...reserves the right to revise, suspend, revoke, replace and/or change all or part(s) of the Plan provisions and objectives at any time as necessary in its sole and absolute discretion, to the extent permitted by applicable law, and for any reason, including but not limited to reflect its business requirements and equitable compensation. <Employer> may make such changes without prior communication to Plan participants, and without providing any compensation or replacement to any Plan participants."
So basically, our business unit was making losses last year and business strategies weren't successful. Management changed the structure of the bonus/commission model for Q3 and Q4 in October of 2022 i.e. after Q3. This meant that bonuses/commissions were no longer based on individual performance but dependent on the performance of the business unit. This effectively meant that they had to pay out much less on bonuses/commissions. Individual overachievement against target became irrelevant.

My question is whether there's any case to challenge my employer to pay out on my individual performance against target for Q3 and Q4? It seems unlikely but maybe there's someone with more expertise on this specific topic or can at least point me in the right direction.


In Hewlett Packard Pty Ltd v Subasic [2021] ACTCA 3, the ACT’s Supreme Court, Court of Appeal unanimously dismissed the appeal by Hewlett Packard Australia (HP) to set aside judgment in favour of their former employee, Melinda Subasic.

Employer cannot make changes with retrospective effect to sales plan
The next question the court had to consider was whether it was permissible for HP to make changes to Ms Subasic’s sales plan that have retrospective effect.
The court concluded that:
Whilst there is clearly provision to make changes to a Sales Plan for the purpose of addressing unforeseen market conditions… the detailed documents contemplate that the changes are to be made during the measure period, that the changes are to be communicated to the employee during the measure period and that the changes are to operate prospectively for the remainder of the measure period.


I'd be interested in getting people's feedback on whether there's any grounds to challenge the fact that my employer didn't pay out the bonus/commission for Q3 and Q4 inline with what I signed and agreed to at the beginning of 2022. I didn't agree or sign any subsequent plans.
 
It sounds like the HP terms were a lot more restrictive than the language in your case which would appear to give them scope to change the terms at any time and for any reason. It would be best have a solicitor familiar with such matters review them in the context of Irish legislation though.
 
It sounds like the HP terms were a lot more restrictive than the language in your case which would appear to give them scope to change the terms at any time and for any reason. It would be best have a solicitor familiar with such matters review them in the context of Irish legislation though.
Thanks for the feedback. I do have a solicitor and I did ask her to review this before Christmas so I've followed up with her secretary again today to hopefully get an update by end of next week.
 
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In the admin guidelines document, it states that my employer "...reserves the right to revise, suspend, revoke, replace and/or change all or part(s) of the Plan provisions and objectives at any time as necessary in its sole and absolute discretion, to the extent permitted by applicable law, and for any reason, including but not limited to reflect its business requirements and equitable compensation. <Employer> may make such changes without prior communication to Plan participants, and without providing any compensation or replacement to any Plan participants."
This pretty much provides that they can move the goalposts however and whenever they see fit. However, just because it’s expressed in writing doesn’t necessarily mean they have the legal freedom to do as they please.

On the face of it, the move to a “collective responsibility” model seems like a breach of long-established terms and conditions, but the disclaimer you’ve quoted muddies the water, even if it ultimately fails as a defence.

You could consider taking a case to the WRC and leaving it to them to adjudicate. A lot cheaper than engaging a solicitor to conduct open-ended research that may ultimately lead you down the same route anyway.

Would agree that Irish case law is more relevant. If you’re minded to do it, you could yourself examine the extensive case history on the WRC website and save yourself a packet.
 
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This pretty much provides that they can move the goalposts however and whenever they see fit. However, just because it’s expressed in writing doesn’t necessarily mean they have the legal freedom to do as they please.

On the face of it, the move to a “collective responsibility” model seems like a breach of long-established terms and conditions, but the disclaimer you’ve quoted muddies the water, even if it ultimately fails as a defence.

You could consider taking a case to the WRC and leaving it to them to adjudicate. A lot cheaper than engaging a solicitor to conduct open-ended research that may ultimately lead you down the same route anyway.

Would agree that Irish case law is more relevant. If you’re minded to do it, you could yourself examine the extensive case history on the WRC website and save yourself a packet.
Thanks for the feedback. Ultimately, due to the fact that I (and other colleagues) overachieved on my annual target, I should have received a very handsome bonus/commission. However, when they changed the commission/bonus model, they only paid out a fraction of what was owed.
As of the 1st of Jan 2023, it's reverted back to the previous commission/bonus model which is based on individual performance.

What's the best way to research similar cases that have been adjudicated on within the WRC, if I decided to opt to represent myself?
 
Thanks for the feedback. Ultimately, due to the fact that I (and other colleagues) overachieved on my annual target, I should have received a very handsome bonus/commission. However, when they changed the commission/bonus model, they only paid out a fraction of what was owed.
As of the 1st of Jan 2023, it's reverted back to the previous commission/bonus model which is based on individual performance.

What's the best way to research similar cases that have been adjudicated on within the WRC, if I decided to opt to represent myself?
All previous decisions are on the WRC website. Will take a bit of digging using keywords etc.

Many cases are settled more quickly and at less cost using mediation (tick the relevant box on the complaint form if you want) although the outcomes aren’t available on the website.

If you’re not comfortable doing this yourself, there are many experienced HR practitioners who charge a lot less than solicitors/barristers.
 
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All previous decisions are on the WRC website. Will take a bit of digging using keywords etc.

Many cases are settled more quickly and at less cost using mediation (tick the relevant box on the complaint form if you want) although the outcomes aren’t available on the website.

If you’re not comfortable doing this yourself, there are many experienced HR practitioners who charge a lot less than solicitors/barristers.
You're right, I'd prefer to hand it over to an experienced HR practitioner to do this as opposed to doing it myself. If you have any recommendations, feel free to PM me.
 
Bit late here but a colleague took an unfair dismissal over a sales compensation plan he felt was structured unfairly. The company came to a compromise agreement and he left with a couple of hundred grand.
 
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