Employer wants to take bonus away

M

MissThing

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When I accepted my job in early 2005, my package included a management bonus + annual performance related pay increases all laid out in a contract which both parties signed in the usual way.

Last May I accepted a lateral move and though I wasn’t issued a new contract I verbally checked with my employers that my package would not be adversely affected which they confirmed it wouldn’t.

Now the issue I have is that HR have said that my package at the outset was incorrect, in that my level of job is not eligible for this management bonus and they want to take it off me in order to align me with others in my job level.

I've told them its not my problem that they've messed up and they can't change my T&C as this forms the basis of my deciding to accept the initial job at the outset.... a lot of blah blah later and they're offering to buy my bonus off me, as in settle for what this years bonus would be “as a gesture of **good will” plus next years based on this years salary. So this means I’ll never get another bonus again from 2008 onwards, just the standard pay increases.

**I really don't like the sound of this as I'll be worse off than I am now. I’m annoyed that they’ve used the term ‘gesture of goodwill’, I don’t see them paying my 2006 bonus as good will, its their obligation based on my contract!

My point is I could work here 'till I'm 65 in which case I loose out on the bonus facility for 2007 + 2008 + 2009 to eternity. Anyway, in order to buy some time I said I needed to think about it and I asked them to draw up a draft proposal. Quick as lightening a letter was produced the same day in it they're offering me a lump sum payment which amounts to what next year’s bonus would be.

I actually think they're breaking the law by trying to force me to agree to renewed terms and conditions, hence they're looking for a signed consent. I want to show them that I'm willing to negotiate but I'm not willing to settle for just 1 year’s bonus when hypothetically if I do work here 'till I'm 65 I could be passing up on 20 years worth of bonus .

On the other hand, who’s to say that I’ll stay in this job even for the duration of 2007 in which case should I just take the advanced bonus or try to get them to agree to a larger figure based on lost earnings potential from next year on.

Sorry for the long post.

Opinions appreciated.
 
I dont know anything about this but my only adivse to you would be to take your original contract and the new "Draft Proposal" to someone with legal experience and get advise on it.

I know my advise isnt much but i think it may be your best option and its something i would DEFINATELY do.
 
Is the management bonus guaranteed in the contract? Is it possible that there would be no bonus some years?
 
I don’t think that you are going to get a black-and-white answer here as the matter is quite convoluted and there are aspects we aren't aware of. There are 2 aspects I see as being relevant. Firstly did the company make a genuine mistake in offering you a bonus which wasn’t applicable to your level? One way to find that out if you can, is to check with people on both the levels concerned to see how they are fixed regarding the bonus. If the company did make a genuine mistake then I doubt if it would be considered reasonable to expect them to stand over the contract for evermore. How would you feel for example if it emerged that they were underpaying or under-rewarding you? Would you be happy if they said that that’s tough but that they were going to stick by the contract?

Secondly, you are right in thinking that the company is out of line if they are attempting to force you to accept a change to your contract terms. They are obliged to negotiate with you in the matter. It might be argued however that the offers they are making you constitute ‘negotiation’. What you don’t know presumably is what will happen if you refuse to settle and hold out for your bonus payment.

I think that if you are unable to reach a settlement with them you’ll have to refer the matter to the Labour Court/Rights Commissioner who will investigate and come up with a recommendation. As a preliminary move I suggest that you speak to :-


Employment Rights Information Unit
Room G05
Davitt House
65a Adelaide Road
Dublin 2
Telephone: + 353 1 631 3131
LoCall Number 1890 201 615
Fax: + 353 1 631 3329
E-mail Address:erinfo@entemp.ie
 
I've touched off a similiar situation before except it was from the opposite side, ie final contract did not include a part of the initial offer and I don't need to tell you how that turned out (lesson hard learned).

As far as i'm aware if it was offered as part of the employment contract and accepted in goodwill on your behalf then your employer must comply with the T&c of the contract. The only hole you may come across is if it is a performance related bonus and they decide to play hardball with you.

Obviously my experience is only a pointer but I reckon its definately worth seeking legal clarification on.
 
Pat127,

A unilateral mistake is not a concept that normally exists in irish contractual law. Generally it will only be permitted if both parties are aware of the mistake and the mistake is blatant - i.e. a mistake-on-its-face...such as a typo that puts a decimal point in the wrong place

In this case, it appears that company offered a better package than they intended. However, Miss Thing was not aware of any mistake on their part. As such, she accepted a valid offer with a valid acceptance resulting in a valid contract.

Just because the company now does not like the deal, they do not have the power to unilaterally vary the terms of the contract (unless of course the contract provides that they can). Get the contract looked at by a solicitor and sit tight.

Incidentally, your example of a person being under-paid because a company is sticking by its contract is entirely spurious. Contracts are designed to be followed - that is their sole purpose. If you don;t check the terms thoroughly (or get somebody to check them for you) you have to accept the consequences
 
I should clarify that this wasn't a 'mistake' as such, rather, the hiring director at the time, (who has since moved on) worked this management bonus into, not only my package but also, that of at least 2 others at my job level. One has taken a lateral move outside my department and at that time agreed to a buy out and the other has since been promoted to manager so their management bonus is valid now anyway.

I'm lead to believe by HR that I'm the only one left whose package needs to be aligned with my peers, so it's more administrative but at my cost and dare I say potentially eroding my loyalty to the company.

I've had 2 annual performance reviews since I started with the company and both have been good.

MT
 
MissThing said:
I should clarify that this wasn't a 'mistake' as such, rather, the hiring director at the time, (who has since moved on) worked this management bonus into, not only my package but also, that of at least 2 others at my job level. One has taken a lateral move outside my department and at that time agreed to a buy out and the other has since been promoted to manager so their management bonus is valid now anyway.

I'm lead to believe by HR that I'm the only one left whose package needs to be aligned with my peers, so it's more administrative but at my cost and dare I say potentially eroding my loyalty to the company.

I've had 2 annual performance reviews since I started with the company and both have been good.

MT
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That's a very useful piece of additional information. It seems clear then that the possibility of a 'mistake' having being made can be ruled-out (regardless of the relevance or otherwise of that - a separate debate altogether!). In that case I'd have to agree entirely with NiallP, i.e. "Get the contract looked at by a solicitor and sit tight".
 
of course they can continue to give you a bonus each year and give you a very reduced pay rise.or a good pay rise and a euro bonus.or a rubbish pay rise and rubbish bonus
no matter what happens here the company will win out in the end and both sides will be unhappy with the outcome and grudges will probably be bourne.
at least you are looking at it sensibly and saying that you may not stay with the company.
you should prepare yourself for the hardball and stick to the same line at all times that the contract package was what enticed you to the company.. along with of course the usual pandering about how great the company is.. but to be fair i think money is the greatest motivator for all jobs
 
I am in a similar situation. I queried it with the Dept.of Enterprise, Trade and Employment. Here's what they said:
The payment of Wages Act states that any change in wages must be agreed with the employee. Any other terms and conditions can be changed. In cases of disputes regarding wages, an employee may refer a complaint to a Rights Commissioner under the Payment of Wages Act 1991.The relevant form can be downloaded from our website www.entemp.ie or is available from our office.
Click to expand...

The problem is it's a grey area whether a discretionary bonus constitutes 'wages'. It might depend on usual practice within a company or department. Does your existing contract addresses how and when (if ever) your terms and conditions will be reviewed? My contract uses a wording that arguably prevents unilateral alterations other than on a specified annual date.

Informal legal advice on my situation suggests I have a strong case (tantamount to constructive dismissal), but it may be more trouble than it's worth to pursue.

NB None of the above (including the quote from the Department) should be taken as definitive legal advice!
 
Please forget about the legal route. Use your energy to find another job. Do you really want to work for an employer who behaves like this.
 
MissThing said:
When I accepted my job in early 2005, my package included a management bonus + annual performance related pay increases all laid out in a contract which both parties signed in the usual way.
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What you dont tell us is whether or not the management bonus part of your package is guaranteed. If it is descressionary there is a chance that they will give you next to nothing if you refuse to take their offer so you loose out anyway. If it is guaranteed, is it a % of your salary? Maybe they will not give you a pay rise again (or a token one) so that over time your salary + bonus comes into line with what your salary should be.

IMO once you have a dispute like this with an employer you arent going to win. If you dont go along with it you can more or less kiss your career in that company goodbye. No one is going to promote or back someone who is causing grief with upper management. Do you really want to go into work every day knowing that they want rid of you?
 
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