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tdlawyer
tdlawyer, Laywer
Category: Employment Law
Satisfied Customers: 1096
Experience:  Lawyer with 9 years experience in employment related issues.
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How can I get my employer to pay me an overdue bonus? I work

Customer Question

How can I get my employer to pay me an overdue bonus?
I work for a developer who sold a portfolio of projects in November 2013. On completion of the sale I was due payment of gross £19,500. The company is in some financial difficulty with a number of creditors. The CEO offered me an interest free loan advance on part of the sum owed which he has retracted. The CEO offered to pay a % of the debt equivalent to his shareholding of 71%, regardless of whether the other shareholders were prepared to do the same. The other shareholders did not agree to putting in their equivalent amounts and the CEO has retracted this offer.
The CEO is currently negotiating the sale of his shares. This may be straightforward to a known third party. It may however be that the third party only purchase his 71% shareholding in the projects currently under development (held in separate special purpose vehicles) and the parent company that owes me the bonus is wound up, presumably with my bonus lost.
I have numerous emails that make reference to the bonus owed. I have a contract of employment that has the bonus commitment appended (I have been employed here since 1st Feb 2013 but the contract is unsigned).
Submitted: 3 years ago.
Category: Employment Law
Expert:  tdlawyer replied 3 years ago.

tdlawyer :

Hi, thanks for your question. My name isXXXXX can assist with this.

tdlawyer :

You've been employed for a little over one year now, is this correct?

Customer:

yes

tdlawyer :

Okay. You are entitled to bring a claim in the employment tribunal or the county court against your employer for any wages due to you.

tdlawyer :

You can do this at any time, so long as it's not later than 6 years after you got paid.

Customer:

How do I persue this?

tdlawyer :

The fact it is unsigned may not be all that significant so long as it's something you were all working to - i.e. neither you nor the employer had said anything to the other to make either of you believe you were not going to work to the agreement.

tdlawyer :

If you sue in the county court then you issue a claim online here: www.moneyclaim.gov.uk

Customer:

how long and does it take and how much does it cost? does it affect my employment?

tdlawyer :

It shouldn't affect your employment, although your employer might seek to dismiss you and say he has no need for you etc. If this happens, you may be able to argue that it's an unfair dimissal (even though you've been there less than 2 years) by arguing that it's an unlawful deduction from your wages entitlement that you haven't been paid. However, it would be better to wait if you can for another year, so you have the basic protection from unfair dismissal and then sue if you have to then if you've not been paid by then.

Customer:

From my initial explanation, the company may not exist then.

Customer:

Am I better off accepting a lesser amount and going through small claims court or heading for county court?

tdlawyer :

I understand, but thats the only way you guarantee yourself protection from unfair dismissal.

tdlawyer :

It's always better to avoid court if you can and that often means accepting something less than you're otherwise entitled to.

tdlawyer :

It resolves things quickly and avoids the risks of litigation etc.

Customer:

so how do I put pressure on but avoid court?

tdlawyer :

Does the company formally dispute payment is due to you (or part of it)?

Customer:

no. just stalling on paying as the company has some cash flow problems and a number of creditors. I have been waiting 4 months. With the iminent share sale by the CEO I am concerned the company may be wound up and so need to act now while there is still a company to persue.

tdlawyer :

Well, you could do a letter, referring to concerns that the company might go under, and that you want paying before it does. It makes your knowledge known to them. I was thinking you could present a winding up petition, which would pretty much likely end your employment with the company, but it would ensure that you received payment or the company goes under (assuming you're owed more than £750).

Customer:

I'm owed £19,500 before tax. I don't want to end employment in the hope the company continues. I have another £25k in bonus agreements tied up in the current projects. It is a small company, there are only 8 of us. The CEO knows I know the position and never replied to letters. Is formal letter threatening small claims the start point?

tdlawyer :

Yes, I think that's the best you can do in the circumstances to be honest. Hopefully, they'll pay up or agree time to pay with you - either would be better than the company closing down and you getting nothing. If you can agree something, then you preserve your job too hopefully.

tdlawyer :

Is there anything more I can answer about this for you?

Customer:

The CEO says he will pay either when a poss vat rebate comes in (should have been Feb, might now be May) or when he sells his shares. I believe neither based on track record. As in initial post, he has previously commtited to paying some monies twice then changed his mind on both. Re the company possibly being wound up when he sells shares (in the next 2-4 weeks), I just have to take that risk that I will lose all?

tdlawyer :

Presumably, if he sells up, the buyer will want a viable company left (if this is a share sale)? If so, one would assume the business would continue to trade and you should still get paid?

Customer:

No, the third party is our development partner who have indicated they want to buy the shares in the projects (held in SPVs with the same shareholdings as the company), but don't really want the parent company (which employs me and owes the bonus. They will either take forward projects themselves or a new entity will be set up that may take me on.

tdlawyer :

I see .... so yes, there is a risk then that it might close down and leave you with little or nothing. If you presented a winding up petition, you might scupper the deal, but you could perhaps negotiate terms (such as your payment and, perhaps 6 months notice), to avoid you proceeding. Obviously, you'll lose your job I expect, but that's the difficult decision you need to think about.

tdlawyer :

Is there anything more I can answer for you?

Customer:

just one more - what is a winding up petition?

tdlawyer :

It is where you threaten to liquidate the company and close it down.

Customer:

thanks.

tdlawyer, Laywer
Category: Employment Law
Satisfied Customers: 1096
Experience: Lawyer with 9 years experience in employment related issues.
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