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Ben Jones
Ben Jones, UK Lawyer
Category: Law
Satisfied Customers: 45315
Experience:  Qualified Solicitor - Please start your question with 'For Ben Jones'
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I have today been notified in writing by my boss that my annual

Resolved Question:

I have today been notified in writing by my boss that my annual bonus, which is purely in respect of previous year performance throughout 2015, will be paid in the next available pay packet. I get paid tomorrow and it is not in that payslip because there was clearly no time for the company to arrange it in time for the March payroll run. I have been looking for a new job for a while now and I have found one that have made me an acceptable offer and I am ready to resign. If I resigned next week could the company get away with not paying the bonus to me in my April pay packet or am I safe now that I have the letter, which was emailed to my company email address from my line manager's company email address?
Submitted: 10 months ago.
Category: Law
Expert:  Ben Jones replied 10 months ago.
Hello. How long have you worked there please?
Customer: replied 10 months ago.
Hi, I have worked there for 6.5 years in continuous full-time employment.
Expert:  Ben Jones replied 10 months ago.
Hello, sorry my connection dropped last night. Is there anything in your contract which states the bonus does not become payable if you leave or are under notice of termination?
Customer: replied 9 months ago.
No, not in the contract of employment itself. However there was an attachment to the contract (which I signed on 14 Oct 2009) entitled Employee Benefits. One of the sentences says the following:The bonus is paid in the April 30 payroll of the subsequent financial year, provided the employee is employed on 30th March that year.I guess the question is if this benefits summary attachment is part of the contract and if being employed covers the time when working out my notice?The sentence in the main part of the contract says this:You will be paid an annual bonus of £xxx which will be based on mutually agreed performance goals and will be pro-rated to 31st December 2009 assuming a start of 20th October 2009.The contract states a date of commencement of employment of 20th October 2009, which is when I did start.I hope this is sufficient information.
Expert:  Ben Jones replied 9 months ago.
Thank you. If the document you signed was an attachment to your contract then it is likely to have a contractually binding effect. It specifically states that to be eligible for the bonus you must be employed on 30 March this year. Whether you are serving your notice or not at the time you would still be employed by them – it would have specifically clarified that you must not be under notice of termination if they wanted to exclude that. So as far as you are still employed by them at the date, even if you are under notice, you should be eligible for this bonus. This is your basic legal position. I have more detailed advice for you in terms of the law on bonuses and how they may become payable anyway, which I wish to discuss so please take a second to leave a positive rating for the service so far (by selecting 3, 4 or 5 stars) and I can continue with that and answer any further questions you may have. Don’t worry, there I no extra cost and leaving a rating will not close the question and we can continue this discussion. Thank you
Ben Jones, UK Lawyer
Category: Law
Satisfied Customers: 45315
Experience: Qualified Solicitor - Please start your question with 'For Ben Jones'
Ben Jones and other Law Specialists are ready to help you
Expert:  Ben Jones replied 9 months ago.
Thank you. When it comes to workplace bonuses, there are two main types: contractual or discretionary. There can be an overlap where a contractual term gives the employer discretion over payment, or there can also be further sub-categories, for example performance-related bonuses or bonuses payable subject to other conditions. What is certain is that the legal issue of bonus eligibility is a rather complex matter and would mainly be subject to interpretation of individual circumstances and the wording of the clauses in question. A common example is a bonus clause which is contractual but which gives the employer the discretion to decide whether it would be payable or not. This is also a situation which would cause most disputes between employee and employer. Whilst at first glance this may give the employer full discretion as to whether the bonus should be paid or not, this will not always be the case. If the eligibility to a bonus is based on performance criteria then first of all if an employer is required to form an opinion of an employee's performance they must do so in good faith and be fair. Any other performance criteria would usually be determined based on qualitative data. Assuming the performance conditions have been met, an employer will rarely be able to refuse payment of the bonus as doing so would be acting in bad faith and considered unfair. So this is an example where the employer's discretion is removed once the relevant eligibility conditions have been satisfied. It follows that even though a bonus clause may be described as being entirely at the employer's discretion, there are circumstances, mainly in performance-based eligibility, where this discretion is removed and the bonus would automatically become payable if the eligibility criteria have been met.

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