Maternity Leave and Bonus Payments

Deano1000

Thanks SarEl. If there are no written terms in the contract, then could the usual rules on conduct apply and bind the employer, as the law of contract dictates that in the absence of an actual mutual agreement on express written or oral terms between parties, contracts can arise by conduct - Brogden v Metropolitan Railway Company (1876-77) L.R. 2 App. Cas. 666.

corbyboy

Deano1000 wrote: »

Thanks SarEl. If there are no written terms in the contract, then could the usual rules on conduct apply and bind the employer, as the law of contract dictates that in the absence of express written or oral terms between parties, terms are implied by conduct?

That would be my interpretation. So if employees who are absent through sickness in August are refused their July bonus, then it's probably reasonable for your friend on maternity leave to be refused her bonus too.

Deano1000

No....people who are sick one month would not be refused payment of a bonus already earned in the preceding month.

SarEl

Deano1000 wrote: »

Thanks SarEl. If there are no written terms in the contract, then could the usual rules on conduct apply and bind the employer, as the law of contract dictates that in the absence of an actual mutual agreement on express written or oral terms between parties, contracts can arise by conduct - Brogden v Metropolitan Railway Company (1876-77) L.R. 2 App. Cas. 666.

I think I must be making myself very unclear. What you are calling a contract, regardless of how detailed it may be, is not a contract of employment. It is a written statement of main particulars. The contract is actually a collection of things, including custom and practice, policies etc. It may or may not include the bonus scheme - whether this is a contractual agreement or not should be specified in the policy or procedure for the terms of the bonus scheme. Because you have not asked the question "Is there a policy that outlines when and how people are paid for the bonus scheme", not asked for clarification on why the employer has refused the payment and on what basis they can do so, you are asssuming a practice that may not exist. Simply because it appears to have been earned and to be paid a month in arrears does not mean that it is. The rules may say that the bonus is paid on the basis of meeting certain target, which includes not being absent from the workplace on XX days. There are plenty of examples of bonus schemes that are not paid, for example, if you happen to be on long-term sick, on maternity leave, or if you resign. So until you know the actual explanation for this action, nobody can know whether the employer is acting unlawfully, or whether they are just doing what they always do, but you didn't know about it. You are assuming that they are not adehering to normal practice - you do not know this.

But lets assume for a minute that the employer is acting unlawfully (and I emphasise - we do not know this), what are you (or to be more precise - your friend - going to do about it? If she wishes to go to a tribunal to make a claim for this money, she must first try to resolve this with the employer. And the first step in doing that must be to ask the question that I have already told you must be asked - where are the terms for the bonus scheme and on what basis is this payment being refused? If she is then not happy with the answer she can take out a grievance, and then appeal if still not happy. But quite apart from the potentially disasterous impact on her job prospects of rushing off to a tribunal, she cannot do so without going through due process. So the question must be asked.

Deano1000

Thanks again. She is going to ask, but has confirmed that there are no written terms and conditions of the bonus scheme whatsoever, and never have been. The conditions under which the bonus is paid only exist by mutually agreed conduct, the beginnings of which commenced 6 years ago.

SarEl

Deano1000 wrote: »

Thanks again. She is going to ask, but has confirmed that there are no written terms and conditions of the bonus scheme whatsoever, and never have been. The conditions under which the bonus is paid only exist by mutually agreed conduct, the beginnings of which commenced 6 years ago.

Well if she is correct she still needs to ask the second question (justification for refusal to pay based on custom and practice) and if she doesn't like the answer, go down the grievance / appeal route. This would be expected in any circumstances for a tribunal, but right now it is imperative after a recent EAT ruling which has restricted the tribunals power to deduce terms.