HR question- reclaiming bonus from staff?
Discussion
Mrs P has received an email from her employer that she is "receiving a performance related bonus as the business has been so succesful other the past year" (employers words, not mine)
This is entirely ad hoc and not a contractual right.
Her contract and staff handbook are silent on bonuses.
The bonus is in this months paypacket, but in the letter informing her of the bonus, it dictates that if she leaves within 6 months, they will reclaim the bonus from her paypacket.
This is problematic as Mrs P has grown to hate her job other the past 5 years and is actively interviewing at other businesses.
is their approach legal and if not, what chance do we have of reclaining any deductions?
She has been with the business for 12 years, this will be the second annual bonus she has received (included for fullness- probably irrelevant).
This is entirely ad hoc and not a contractual right.
Her contract and staff handbook are silent on bonuses.
The bonus is in this months paypacket, but in the letter informing her of the bonus, it dictates that if she leaves within 6 months, they will reclaim the bonus from her paypacket.
This is problematic as Mrs P has grown to hate her job other the past 5 years and is actively interviewing at other businesses.
is their approach legal and if not, what chance do we have of reclaining any deductions?
She has been with the business for 12 years, this will be the second annual bonus she has received (included for fullness- probably irrelevant).
Might be better in jobs & employment.
A discretionary bonus beyond contracted remuneration I imagine would be on their terms. Part of it will be to create goodwill among workers and someone leaving would go against this (in my opinion). If she's not happy with the terms, she could refuse it
We pay bonuses at the end of the year, if someone left we'd have to accept that. Whenever I've paid anyone early to try and help with life, it's come back and bitten me on the backside!
A discretionary bonus beyond contracted remuneration I imagine would be on their terms. Part of it will be to create goodwill among workers and someone leaving would go against this (in my opinion). If she's not happy with the terms, she could refuse it
We pay bonuses at the end of the year, if someone left we'd have to accept that. Whenever I've paid anyone early to try and help with life, it's come back and bitten me on the backside!
Tricky one.
The company has stated (in writing) the bonus relates to retrospective performance that your OH has contributed towards. Therefore the bonus should not be influenced by actions that take place after it has been awarded including her leaving the company.
However, the company may argue that the payment of an ad-hoc bonus is intended as an incentive for performance levels to be maintained in the future - something that cannot be done if your OH leaves. Therefore they may well have a right to reclaim that bonus or some of it.
But because the conditions surrounding the bonus do not feature within the contract or staff handbook, it's something that would be determined by a court.
Because they would be in a position to withhold the amount from her final salary payment, she would need to evoke legal action to obtain it (rather than to retain it, where the company would need to go legal). On balance, I'd say that a court is unlikely to support the company's claim for rebate. But this isn't something I'd put money on.
Unless we're talking serious amounts, I'd make peace with the fact that she'd loose it. If she doesn't; happy days. But if she does; so be it.
Caveat is that I say this from the perspective of one who has previously paid such ad-hoc bonuses but those more attuned to current employment law may have a different view.
The company has stated (in writing) the bonus relates to retrospective performance that your OH has contributed towards. Therefore the bonus should not be influenced by actions that take place after it has been awarded including her leaving the company.
However, the company may argue that the payment of an ad-hoc bonus is intended as an incentive for performance levels to be maintained in the future - something that cannot be done if your OH leaves. Therefore they may well have a right to reclaim that bonus or some of it.
But because the conditions surrounding the bonus do not feature within the contract or staff handbook, it's something that would be determined by a court.
Because they would be in a position to withhold the amount from her final salary payment, she would need to evoke legal action to obtain it (rather than to retain it, where the company would need to go legal). On balance, I'd say that a court is unlikely to support the company's claim for rebate. But this isn't something I'd put money on.
Unless we're talking serious amounts, I'd make peace with the fact that she'd loose it. If she doesn't; happy days. But if she does; so be it.
Caveat is that I say this from the perspective of one who has previously paid such ad-hoc bonuses but those more attuned to current employment law may have a different view.
ds!Unusual way for an employer to do it. Normally if you want to include a retention element you would just issue the letter today with the amount but say that it will be paid in 6 months provided still employed / not given notice.
For your situation, given that it is a wholly discretionary award and not covered in any other documentation, the terms of the payment will be dictated by the letter. If your wife does not like the terms she should refuse the payment.
If she accepts the payment then the clawback terms in the letter will apply.
For your situation, given that it is a wholly discretionary award and not covered in any other documentation, the terms of the payment will be dictated by the letter. If your wife does not like the terms she should refuse the payment.
If she accepts the payment then the clawback terms in the letter will apply.
Newc said:
Unusual way for an employer to do it. Normally if you want to include a retention element you would just issue the letter today with the amount but say that it will be paid in 6 months provided still employed / not given notice.
For your situation, given that it is a wholly discretionary award and not covered in any other documentation, the terms of the payment will be dictated by the letter. If your wife does not like the terms she should refuse the payment.
If she accepts the payment then the clawback terms in the letter will apply.
unfortnuately she can't refuse the payment- they told her yesterday and paid it this morning! For your situation, given that it is a wholly discretionary award and not covered in any other documentation, the terms of the payment will be dictated by the letter. If your wife does not like the terms she should refuse the payment.
If she accepts the payment then the clawback terms in the letter will apply.
As someone else said, we'll probably have to put the money to one side, which is annoying.
We've just paid bonuses to our staff (of a similar quantum too), and i can't imagine saying treating it in the same way. Its a really good way to demotivate people- "have a reward for the work you've done- but it comes with strings...". Not very motivational.....
PugwasHDJ80 said:
Newc said:
Unusual way for an employer to do it. Normally if you want to include a retention element you would just issue the letter today with the amount but say that it will be paid in 6 months provided still employed / not given notice.
For your situation, given that it is a wholly discretionary award and not covered in any other documentation, the terms of the payment will be dictated by the letter. If your wife does not like the terms she should refuse the payment.
If she accepts the payment then the clawback terms in the letter will apply.
unfortnuately she can't refuse the payment- they told her yesterday and paid it this morning! For your situation, given that it is a wholly discretionary award and not covered in any other documentation, the terms of the payment will be dictated by the letter. If your wife does not like the terms she should refuse the payment.
If she accepts the payment then the clawback terms in the letter will apply.
As someone else said, we'll probably have to put the money to one side, which is annoying.
We've just paid bonuses to our staff (of a similar quantum too), and i can't imagine saying treating it in the same way. Its a really good way to demotivate people- "have a reward for the work you've done- but it comes with strings...". Not very motivational.....
On what planet would you want to refuse the payment?
Free money 'put to one side' is not at all annoying. It's actually really nice. Give it a try before deciding you don't like it.
Blown2CV said:
sounds like they got wind she was interviewing and decided to carrot and stick her back in for a while. Is she able to ask her peers if they got a bonus?
Could well be this.If she's interviewing in the same area of work, or someone knows someone who works there - it only takes one to pick up the phone and ask, "what's Mrs PugwasHDJ80 like? - as she's been here for an interview" and the arduous terms and conditions about bonuses then apply.
If they did, its crappy behaviour though from both organisation's sides…
SpeckledJim said:
You sound remarkably chippy to me, given that this is FREE MONEY to which your wife is NOT ENTITLED.
On what planet would you want to refuse the payment?
Free money 'put to one side' is not at all annoying. It's actually really nice. Give it a try before deciding you don't like it.
Its probably my writing style as I'm not chippy- mildy irritated about something petty that is really unneccessary, slightly bemused at how the employer has undermined their own motivational bonus. I can't really say why i'm even mildly irritated! Its probably nothing more than the fact i'd never imagine doing this to my staff! On what planet would you want to refuse the payment?
Free money 'put to one side' is not at all annoying. It's actually really nice. Give it a try before deciding you don't like it.
Thanks everyone for your replies- really helpful.
p.s. to whoever said they might have got wind- that's a god point and not one wed considered.
Accept the bonus and tell the wife to suck it up for 6 months. If she doesn't fancy that then let her know that billions of men over countless generations have had to tolerate jobs they've hated for their entire working life just to provide for their families. Half a year is a blink of an eye and a good investment in the family finances.
CorradoTDI said:
Unless she's having interviews right now she's probably 2-3 months off starting a new job by the time you've applied / interviewed and accepted an offer then worked notice etc and 4-5 months if she has a 3 month notice period anyway!
Yep. There is nothing wrong with her just telling any new company that her notice period is the same as the length of time to the clawback cut off date. Or indeed just being up front and saying it's 3 months or whatever but it needs to be 4 because otherwise i'll lose my bonus. Blown2CV said:
CorradoTDI said:
Unless she's having interviews right now she's probably 2-3 months off starting a new job by the time you've applied / interviewed and accepted an offer then worked notice etc and 4-5 months if she has a 3 month notice period anyway!
Yep. There is nothing wrong with her just telling any new company that her notice period is the same as the length of time to the clawback cut off date. Or indeed just being up front and saying it's 3 months or whatever but it needs to be 4 because otherwise i'll lose my bonus. 6 months is nothing. Gone in a blink of an eye.
My industry is built on bonuses, but they are always “discretionary”. No contractual obligation to pay etc. they’re paid on cash to a certain point and then deferred stock above.
Except 2 bonus cycles ago they announced that if you were of a certain seniority the cash would be subject to clawback pro-rata if you leave within three years of payment! We were given a document to sign that said you agree to these terms or you get nothing. It was repeated last cycle too. It was kind of tolerable for a one-off, but is now a rolling ballache.
My industry is built on bonuses, but they are always “discretionary”. No contractual obligation to pay etc. they’re paid on cash to a certain point and then deferred stock above.
Except 2 bonus cycles ago they announced that if you were of a certain seniority the cash would be subject to clawback pro-rata if you leave within three years of payment! We were given a document to sign that said you agree to these terms or you get nothing. It was repeated last cycle too. It was kind of tolerable for a one-off, but is now a rolling ballache.
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