Bonus Payment Disputes

If you find yourself in dispute with an employee over bonus payments, it is highly advisable that you seek legal advice from an experienced employment solicitor as soon as possible. The specialist employment lawyers at Wilford Smith can provide direct representation, as well as ongoing support with a comprehensive range of employment issues. We have a proven track record when it comes to advising employers in bonus disputes with workers, as well as those involving executives and other senior company members.

To find out how we can help, call us on 0808 164 1349 or complete our online enquiry form.

What types of bonuses can result in employment disputes?

Discretionary bonuses

The majority of bonus schemes are expressed to be discretionary and will typically include a form of criteria, such as achieving individual or company targets, which will determine the extent of any bonus. Often these bonus agreements will allow the employer to reserve the right to decide if a payment will be made – as a result, the issue of employers unfairly exercising this discretion can easily lead to disputes.

Case law has established that employers do not have unfettered discretion when it comes to such bonus arrangements, but bonuses can be withheld if an employer acts in good faith and decides not to pay bonuses on reasonable grounds. Our solicitors can advise you on your rights to exercise your discretionary rights to refuse bonuses and to demonstrate that doing so was reasonable in the circumstances.

Contractual bonuses

Bonus arrangements are clearest when they are expressed contractually and are based on a specific formula. This may be linked to individual performances or the achievement of particular targets, either by the employee or the company as a whole. Employers should take care when refusing bonuses if these arrangements are in place, as doing so can give rise to a claim for breach of contract and/or constructive dismissal. Our employment team can advise from the earliest stage if you feel you have grounds for refusing a contractual bonus to ensure your position is protected.

Bonus payments on termination of employment

Disputes could arise over whether or not an employee whose contract of employment has been terminated, either as a result of their resignation or dismissal, should still receive a discretionary bonus that they would otherwise have been entitled to if they had continued on their role. Factors that should be considered include:

• When an employee has been dismissed, the reason for their dismissal
• Any bonus clauses in the employee’s contract – this may state that an employee must be in their role on the bonus date or that they must not be working under notice
• Whether the employer has elected to make a payment in lieu of notice (commonly known as PILON) and how this may affect any bonus clause

Contact our Bonus Payment Dispute Solicitors

Our employment solicitors will work on your behalf to achieve the right result, taking a thorough and robust approach to ensure that your interests are protected. We are proud of our reputation for delivering unique representation. The service we provide is tailored to the needs of our clients – our lawyers will take the time to discuss your options with you in detail, explaining matters clearly and without resorting to legal jargon.

Call our specialist solicitors today by on 0808 164 1349 or complete our online contact form.