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Ask taratill Your Own Question
taratill
taratill, Solicitor
Category: Employment Law
Satisfied Customers: 6307
Experience:  15 years experience of advising on employment law matters
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Employee performance goals were agree and the annual bonus

Resolved Question:

Employee performance goals were agree and the annual bonus amount as well. The bonus amount has increased from previous year and in addition employee is part of company performance and will get additional bonus, when company does well. Both written down in sheet, but not specified in employment contract. In the review employee was told, that his bonus amount has decreased to annual £ 5000 instead of the agreed £ 12000. Employee achieved 150% of his personal performance. Could you please advice if employer can do that? Tahnk you.
Submitted: 2 years ago.
Category: Employment Law
Expert:  taratill replied 2 years ago.
taratill :

Hello my name is ***** ***** I am happy to help you today. Are you the employee in this situation? How long have you worked there for?

Customer:

Yes, I am the employee of the situation. My starting date was the 20.06.2011. We receive bonus payments in Janaury and in July.

taratill :

Ok what reason has the employer given, if any , for backtracking on this? And are you the only person affected?

Customer:

UK Managaing Director made the decision to give me this bonus. Then the Finance Director saw the sheet in November and went with it to the CEO, both are based in the US. They dodn't agree to the decision the MD has made.

taratill :

Was the full bonus paid or did they backtrack before the full payment was made?

Customer:

I had my review this afternoon with my MD and he told me that the bonus is 5000£ instead of 12000£. Payment will be made at the end of the month with the salary.

taratill :

Ok thanks, ***** ***** raise a grievance to say that you consider it amounts to a breach of contract and a breach of trust and confidence for your employer to backtrack on the agreed bonus after the bonus level has been achieved. Whilst your contract itself does not specify the bonus you are entitled to expect that the FD would have authority to agree the bonus on behalf of the company and that you should be paid it.

taratill :

Hopefully if you raise a grievance your employer will see that you are not going to take this lying down and will pay you on this occassion.

taratill :

If they do not you can consider bringing a breach of contract claim against them whilst still employed. If you were told it would be paid in a particular salary month you can argue that the failure to pay the full agreed amount amounts to an unlawful deduction from wages. This claim must be brought within 3 months of the 'deduction'. In order to raise the claim you will need to engage ACAS Early conciliation.

taratill :

If you have any further questions please do ask. If I have answered your question I would be grateful if you would take the time to rate my answer. Thank you and all the best.

taratill :

Hello is there anything further you would like to know about this?

Customer:

just reading thorugh this

Customer:

Hang on please

Customer:

I was on the phone sorry

Customer:

In your first part you are saying the FD would have authority, but in my case the MD agreed to it. Makes that a difference?

taratill :

Yes either the MD or the FD would have authority sorry if I have confused the two.

Customer:

O.K Thank you.

Customer:

Just to be clear

Customer:

Is it a breach of a verbally agreed contract? can you say that?

taratill :

Yes.

Customer:

Thanks a lot that was very helpful. I will rate you.

Customer:

Good bye.

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