Withholding Employee Bonus

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rickson84

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Jun 29, 2015
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Employee contract states the bonus is discretionary. However, employer has given it like clockwork every year to the point all employees even know how it is calculated (based off a very clear performance indicator which all employees can check at any time).

Employer announces the bonus for the year for all individual employees in line with the expectations of employees however decides to withhold a large proportion of one employees bonus for 6 months in order to prevent employee from leaving straight after the bonus has been paid (employee had not handed in notice or indicated that he was going to leave).

Is the employer within their rights here or has the employee got a case to feel hard done by?

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Although the bonus is stated to be discretionary, due to the regular and transparent nature of the bonus, it seems it can be argued that it is indeed not discretionary in these circumstances. And given the bonus is there to reflect the performance of employee over previous 12 months, it seems wrong for employer to be able to hold employee to ransom over nothing but a perceived intention to leave in the near future.
 

Nord20

Free Member
Mar 8, 2011
527
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Is the employer within their rights here or has the employee got a case to feel hard done by?

Both! Bonuses are just that and unless stipulated as part of your agreed remuneration in your contract, the company can either decide not to pay the bonus or delay the payment, at their discretion.

They could simply argue that the company cannot afford to pay bonuses this year.

The only thing that is a little odd is that they have singled out one employee. Maybe that is something you can work with, but I wouldn't hold your breath.
 
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locutus

Free Member
Jun 12, 2015
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I used to work for a bank, and when it was bonus time, the bank would wait 3 months to pay everyone, and if you left before the bonus was paid, you would not be entitled to any of it, and if you left within 6 months, they would pro-rata it from your final pay...

Disliked that... The staff earned the bonus, and waiting 3 months to pay it out is not really right. They know well in advance what the projected bonus is going to be.
 
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1. It depends on what each individual contract states.

2. There must be a reason as to why only one employee has been singled out.

( . . . . . "employee had not handed in notice or indicated that he was going to leave: . . . .) Perhaps the employer has heard something through the grapevine regarding this employee.

Sometimes, all is not said in a post!
 
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