Entitlement to work bonus amount after 7 year precedent set.

W

Willbo

New Member
Messages
3
Hello all, thank you in advance for reading and sharing any opinions or advice!

I have been with my employer in the same role for 7 years. Since the first year there has been a verbal agreement consisting of non-performance related bonus amounting to roughly an extra months wage. This was to counteract the fact that there are no overtimes paid, pensions contributions or perks such as healthcare etc.

For the past 7 years, the yearly bonus amount was in line with the aforementioned agreement. However this year it was unexpectedly 25-30% of the expected value with the explanation that there isn't enough money for them. This was in stark contrast in to the information told to staff in passing by the head of company that bonuses are as usual. It was confirmed that there are no issues with employee performance and it was confirmed that bonus payments are not performance related.

As you can imagine all this was quite the unpleasant surprise to staff. For the past 7 years bonus payments (while not stated in contracts but confirmed verbally to be paid out yearly and not be performance related) were made yearly in similair amounts I wonder what options there are.

From some online research I have come to the concept of contractual entitlement based on past practice. THis is discussed in numerous cases/law advice websites but is well summaries by McCann Fitzgerald as:

  • "Ordinarily, awards of bonus will depend on the performance of the employer’s business, or the employee’s work performance, or both, in the preceding year. Nevertheless, even where bonuses are described as discretionary, an employee might have a contractual entitlement to it as an implied term of the employment contract. This might arise, for instance, by virtue of custom and practice whereby an employee receives a bonus at a particular level consistently over a prolonged period of time.

  • ...Assuming a bonus is discretionary, employers will not enjoy a carte blanche when it comes to the exercise of that discretion, which must not be exercised in a perverse, capricious or irrational way, and which must be exercised bona fide and consistently with the implied duty of trust and confidence."
Apologies for the long text but I wanted to get all the information there (hopefully) and wonder if there is a case to be made even if in essence it is a "gentleman's agreement" that a relatively set bonus payment will be paid to offset overtime not being claimed and no other benefits offered.
 
The bonus is effectively an implied term of your contract and you could seek to have it enforced - initially by just asking but more formally through the company’s grievance procedure if it comes to that.

If all internal procedures prove fruitless, you could make a claim to the WRC. However if the company can show that they genuinely can’t afford to pay bonuses, your claim may not be successful.
 
Salvadore said:
The bonus is effectively an implied term of your contract and you could seek to have it enforced - initially by just asking but more formally through the company’s grievance procedure if it comes to that.

If all internal procedures prove fruitless, you could make a claim to the WRC. However if the company can show that they genuinely can’t afford to pay bonuses, your claim may not be successful.
Click to expand...
There was a meeting schedule to voice concerns and stated about the previous years' figures which was in essence rebutted with demand to show under which employment law or guideline this is the case. Without going into too much detail there is scope for the subsidiary organisation to get further funds from "HQ" (which is often done for other areas of business) but these have to be backed up by a business need which in this case is their requirement for staff to provide legal backing for the argument.

During informal discussions there was a hint of if you don't like it leave with an undertone of you're easily replaceable if you kick up a fuss so would prefer not to go down the route of WRC if at all possible.
 
Willbo said:
Thank you will start going through it. Is there any specific area or to which point it would relate to?
Click to expand...
It’s section 5 concerning the employer’s right to make deductions.

The bonus is effectively part of your pay which the employer is not allowed to withhold other than for certain specified reasons (e.g. tax).
 
You must log in or register to reply here.
Back
Top