Bonus announced then withheld - verbal contract?

baltipine

My daughter started her first job in September. The company is doing very well and the CEO recently announced a 10% bonus for everyone for 2023.

Her manager later clarified that it only applied to people who had been there for the whole of 2023 so many people were disapointed.

A few days later her manager told her that it would apply to people who had worked there for 6 months or more. This only included a few more people so it was changed again to include everyone who worked there last year on a pro-rata basis and she was told she would get the bonus payment.

The bonus was also announced to be paid in the March pay packet.

Last week my daughter handed in her notice and when she got paid yesterday there was no bonus and when she queried it was told it was because she had handed in her notice.

Her employment contract makes no mention of bonuses.

My first thought was that it's a discretionary bonus and they can pay or not pay it to whoever they like but then I wondered that since there's nothing in the written contract there is a verbal contract and she was told that she would get the bonus.

What do you think, is this worth persuing?

Hoenir

There's no contract. 

MacPingu1986

Most general bonus schemes of this nature operate on a discretionary basis and it's pretty standard to not pay bonuses to staff that are working their notice.

It can't hurt for your daughter to ask and challenge, but I think any change is unfortunately pretty unlikely.

Mark_d

Few employers would proceed with paying a discretionary bonus to someone who has already handed in their notice

Marcon

baltipine said:

My first thought was that it's a discretionary bonus and they can pay or not pay it to whoever they like but then I wondered that since there's nothing in the written contract there is a verbal contract and she was told that she would get the bonus.

What do you think, is this worth persuing?

No - but it's a really useful (if unwelcome) lesson for your daughter in case she ever meets another employer with a bonus scheme... Timing your resignation can be very important!

baltipine

Thanks everyone for your comments!

So the fact that she was told by her line manager she would get it means nothing?

I found this on a UK solicitors website:

"Where a non-contractual bonus has already been paid to you, it is treated as “wages” under the Employment Rights Act, and due and payable on the date payment is made. In fact, this definition of wages also applies where your employer has exercised its discretion and awarded/declared a bonus (even if it has not yet been paid)."

This implies that once the company had excercised its discretion and her line manager had told her she would get the bonus she should get it even though she handed in her notice before it was actually paid.

Marcon

baltipine said:

Thanks everyone for your comments!

So the fact that she was told by her line manager she would get it means nothing?

I found this on a UK solicitors website:

"Where a non-contractual bonus has already been paid to you, it is treated as “wages” under the Employment Rights Act, and due and payable on the date payment is made. In fact, this definition of wages also applies where your employer has exercised its discretion and awarded/declared a bonus (even if it has not yet been paid)."

This implies that once the company had excercised its discretion and her line manager had told her she would get the bonus she should get it even though she handed in her notice before it was actually paid.

No harm in asking, but there's likely to be a condition attached to the bonus about having given notice - which she presumably did after her manager said it would be paid.

General_Grant

She could ask Landau Law whether they would act for her on a no win no fee basis.
You will have found they offer free consultations.

baltipine

Marcon said:

No harm in asking, but there's likely to be a condition attached to the bonus about having given notice - which she presumably did after her manager said it would be paid.

There is no mention of bonuses in her contract at all so it's all verbal.

Marcon

General_Grant said:

She could ask Landau Law whether they would act for her on a no win no fee basis.
You will have found they offer free consultations.

Marvellous start to her career. Just think what the former employer could put on her reference - for what is likely to be quite a modest amount given this is a first job, which the daughter has only held for a matter of months.

No sensible firm would take on any such case, on any basis!

baltipine

Thanks everyone for your input!

She's going to just move on to the new, better job.