Bonus eligability

maninthepeaks

Hi,
I'm seeking some advice regarding eligibility for a bonus scheme.  I began work for a company in early November 2020 as maternity cover and will be leaving in early November 2021 having completed a full year of service.
Both the business and I signed a contract that states that I am “eligible to participate in the company’s bonus scheme”.  
Today, I’ve been advised that I’m ineligible for consideration for the company bonus scheme as I’m leaving the business in early November 2021.  I’ve been told that “employees employed until November 2021 do not participate in the 2021 bonus”. 
There was no mention of exclusion of the scheme due to my start or departure date and by the time I leave I will have worked for a full calendar year and have met all objectives asked of me.
I acknowledge that actual payment of a bonus is another matter but I feel that to be told that I'm now ineligable to be considered for a bonus is unfair and may constitute a breach of contract.
All and any advice or guidance on this matter would be gratefully received. 

Brie

If it's like where I work you have to be employed by them on a particular date - usually 31st Jan - to get an annual bonus based on the previous year's employment.  There are circumstances when this doesn't apply - like redundancy where someone might get a pro-rated bonus based on how much of the year they were actually working.  

It sounds like you might have received a bonus if your employment continued but if you leave then it's zero.  Should there have been a monthly or quarterly bonus likely you would have got something.

maninthepeaks

Hi Brie thanks for your reply.  Noted your comments but if the contract states that I am “eligible to participate in the company’s bonus scheme” and makes no mention of the fact that an employee needs to be employed by them on a certain date is this legal?

General_Grant

maninthepeaks said:

Hi Brie thanks for your reply.  Noted your comments but if the contract states that I am “eligible to participate in the company’s bonus scheme” and makes no mention of the fact that an employee needs to be employed by them on a certain date is this legal?

You need to look at the document which describes the operation of the company's bonus scheme.  Not all the terms of that scheme have to be incorporated in the one contract document.

Jillanddy

maninthepeaks said:

Hi Brie thanks for your reply.  Noted your comments but if the contract states that I am “eligible to participate in the company’s bonus scheme” and makes no mention of the fact that an employee needs to be employed by them on a certain date is this legal?

It doesn't need to. You are eligible to participate in the scheme according to the rules of the scheme - they don't have to tell you what the rules are! If the schemes rules are that to get a payment you must have a certain length of employment, be employed on a specific date, or be able to maintain a handstand for 10 minutes, that is what the rules are. You have participated in the scheme, you just aren't eligible for a payment because you don't meet the criteria for payment. This is very common.

TELLIT01

You were elegible to participate, but you are leaving before the date on which you would qualify for a payout from the scheme.  It's really that simple, even if it does feel unfair to you. 

Any bonus scheme I have been involved in is also discretionary, so there is no absolute guarantee that you would receive any payment even if you were there on the qualifying date.  Most also require that you are in their employment for the entire qualifying period, which is often either the calendar year or the tax year.  It would be possible to join in the January of one year and leave in the December of the following year and still not qualify for payment.

Farside71

This is normal for general year long bonuses in my experience.  They really don't want to pay any more money to people leaving the business than they have to.  I'm sure it was in the small print of the bonus somewhere but maybe not obvious as once these schemes are up and running for a few years I don't think they make as much effort to explain them.

Sandtree

Farside71 said:

This is normal for general year long bonuses in my experience.  They really don't want to pay any more money to people leaving the business than they have to.  I'm sure it was in the small print of the bonus somewhere but maybe not obvious as once these schemes are up and running for a few years I don't think they make as much effort to explain them.

Every single bonus scheme I have been in or have seen were discretionary and therefore they never had to pay anyone any bonus.

For a role I turned down recently their contract stated that it was in the discretionary bonus scheme (as I understood was the law anyway for FTCs) however they were very clear up front that their discretion would be exercised and no bonus would be payable (though salary was notably above perm money to compensate)

Farside71

Sandtree said:

Farside71 said:

This is normal for general year long bonuses in my experience.  They really don't want to pay any more money to people leaving the business than they have to.  I'm sure it was in the small print of the bonus somewhere but maybe not obvious as once these schemes are up and running for a few years I don't think they make as much effort to explain them.

Every single bonus scheme I have been in or have seen were discretionary and therefore they never had to pay anyone any bonus.

For a role I turned down recently their contract stated that it was in the discretionary bonus scheme (as I understood was the law anyway for FTCs) however they were very clear up front that their discretion would be exercised and no bonus would be payable (though salary was notably above perm money to compensate)

My current employer is very explicit for their all staff, non-sales led bonus scheme that you if you leave it's tough luck.  I had presumed that most would make this very explicit as not everyone might appreciate what discretionary means.

Having said that I'm not quite sure that any of my work actually helps any of their KPIs but I've not complained in the past.

Sandtree

Farside71 said:

Sandtree said:

Farside71 said:

This is normal for general year long bonuses in my experience.  They really don't want to pay any more money to people leaving the business than they have to.  I'm sure it was in the small print of the bonus somewhere but maybe not obvious as once these schemes are up and running for a few years I don't think they make as much effort to explain them.

Every single bonus scheme I have been in or have seen were discretionary and therefore they never had to pay anyone any bonus.

For a role I turned down recently their contract stated that it was in the discretionary bonus scheme (as I understood was the law anyway for FTCs) however they were very clear up front that their discretion would be exercised and no bonus would be payable (though salary was notably above perm money to compensate)

My current employer is very explicit for their all staff, non-sales led bonus scheme that you if you leave it's tough luck.  I had presumed that most would make this very explicit as not everyone might appreciate what discretionary means.

Having said that I'm not quite sure that any of my work actually helps any of their KPIs but I've not complained in the past.

The last one I was in was very clear too that the bonus was paid for Jan-Dec, you had to be have joined the company before October and you still had to be employed on the date it was paid (following March). It was a better one as it was based on personal performance and on track performance was contractually stated to be 20%

The one before was "up to 20%" however the company pot was set based on performance, this was then diced up to divisions based on their performance, then again by departments and finally down into teams so the team manager finally decides who gets what. So you could have an amazing year, get the perfect annual review and end up with a tiny bonus because your division didn't do too well and one of the other teams really dropped the ball so the department share was small etc etc 

Thrugelmir

Bonus pools are normally determined after the financial results for the period have been finalised. If you do not work for the company for the duration of the financial year, nor remain employed at such time as the accounts are prepared. Then there's no obligation to pay you a share of the pool.