Bonus scheme changed without agreement

[BubblesNW]

Hope someone with a better understanding of employment law can help me here. My boss today informed me that my bonus is being cut by 2.5 times as it is not in line with other employees. This is despite the fact that my sales and profitability are 5 to 10 times higher than the others that I am being lumped in with. i.e for 1% above target (approx £100k) I will get 2% of base pay. My colleagues also earn an additionaL 2% of salary for sales growth of 1% (approx £15k).

Do I have any grounds for complaint to HR / outside agencies here?

Some background info - the company is not losing money, my sales target is 15% growth (compared to 1-5% for my colleagues) and my base pay is higher but not massively so in comparison.

[Siscar]

Are the terms defined in your contract or is it discretionary?

[BubblesNW]

Siscar said:

Are the terms defined in your contract or is it discretionary?

Not defined in the contract.

Verbally agreed with my boss at the start of the year - usually I propose the scheme and we agree something close. This year I was told what was happening across the board - no discussion.

[fuzzyyo]

If its not in your contract then any bonus you receive is up to your employer. Be glad you are receiving anything.

[Butter Face]

fuzzyyo said:

If its not in your contract then any bonus you receive is up to your employer. Be glad you are receiving anything.

Wot e said.


Ours got changed mid jan, no discussion, like it or lump it!

[NPI]

BubblesNW said:

...my sales and profitability are 5 to 10 times higher than the others that I am being lumped in with.

Hand your notice in. If you're that good the firm will wet themselves - if they don't then, no problem, you'll get another job easily.

[rog007]

And that's another key challenge of using bonus schemes as a way of incentivising staff; when the employer makes adjustments to what is in most cases a discretionary scheme, employees react in a way that suggests they think it is anything but discretionary. Some would say that a fair dasy's wage for a fair day's work by a supportive and engaged employer is more advantageous to both parties.

Good luck!

[johnfm]

Not sure why an oral contract in relation to an employee bonus scheme would not be binding. The trouble you will have is in enforcing an oral contract if you have little or no documentary evidence of the terms agreed for this annual period.

I would suggest next time you 'agree a bonus structure' you have an employer confirm its terms to you in writing so that you have some options in the event of their breach.

[BubblesNW]

johnfm said:

Not sure why an oral contract in relation to an employee bonus scheme would not be binding. The trouble you will have is in enforcing an oral contract if you have little or no documentary evidence of the terms agreed for this annual period.

I would suggest next time you 'agree a bonus structure' you have an employer confirm its terms to you in writing so that you have some options in the event of their breach.

To be fair they agreement has not been broken, just not extended. A new deal has been imposed without consultation and I've been told I have no choice other than leaving. Last years agreement was confirmed in writing.

[blindswelledrat]

Sympathies.
Is it a sector that you can jump ship easily?
If so, I would approach them again and tell them you like working there but with the reduced bonus scheme you will be motivated to look somewhere else.

[Shaoxter]

BubblesNW said:

My boss today informed me that my bonus is being cut by 2.5 times

What does this mean exactly? You're going to have to give them 150% of your salary now?

If it's not in writing then I don't think you have any grounds for complaint since the bonus is discretionary. Of course you can always go for interviews and try to get an offer from elsewhere and see what they can do.

[BubblesNW]

Shaoxter said:

BubblesNW said:

My boss today informed me that my bonus is being cut by 2.5 times

What does this mean exactly? You're going to have to give them 150% of your salary now?

If it's not in writing then I don't think you have any grounds for complaint since the bonus is discretionary. Of course you can always go for interviews and try to get an offer from elsewhere and see what they can do.

Where previously I would have earned £2,500 for a certain amount of sales growth, under the new deal for the same growth I will now earn £1,000.

[Du1point8]

look for another job... if they dont value you enough to give a decent bonus based upon what you agreed then I would be straight out of the door.

£100k of sales and £2.5k bonus for it is not a lot

[Siscar]

Du1point8 said:

look for another job... if they dont value you enough to give a decent bonus based upon what you agreed then I would be straight out of the door.

£100k of sales and £2.5k bonus for it is not a lot

That depends on whether £100k is the gross or the margin, if gross it could be a hell of a lot of bonus, particularly is prices were discounted to get the sale.

[Du1point8]

Siscar said:

Du1point8 said:

look for another job... if they dont value you enough to give a decent bonus based upon what you agreed then I would be straight out of the door.

£100k of sales and £2.5k bonus for it is not a lot

That depends on whether £100k is the gross or the margin, if gross it could be a hell of a lot of bonus, particularly is prices were discounted to get the sale.

True... but you can only go off the information available at the time.

[Odie]

Your no longer incentivised to meet your targets, so to put it bluntly; don't.

My bonus is 0.66% of my salary for a 5% growth in the groups ebit so I generally don't feel incentivised.

[Siscar]

Du1point8 said:

Siscar said:

Du1point8 said:

look for another job... if they dont value you enough to give a decent bonus based upon what you agreed then I would be straight out of the door.

£100k of sales and £2.5k bonus for it is not a lot

That depends on whether £100k is the gross or the margin, if gross it could be a hell of a lot of bonus, particularly is prices were discounted to get the sale.

True... but you can only go off the information available at the time.

How true.

It should be said that just because it's verbal doesn't make in unenforceable from a contract perspective, but it's a whole deal harder/less likely, particularly if it is custom and practice to change it every year anyway.

[Odie]

Turnover Is Vanity
Profit Is Sanity
Cash Is Reality

If they aren't bonusing you on profit then they are being very foolish.

[BubblesNW]

Achieving my target brought in over £3 million in net profit for the company before I started to generate any personal bonus. My bonus was self financing - once my target was reached, for each additional £10k in net profit I received approx £1k in bonus. This will now be reduced to £400.

[Odie]

Perhaps you should discuss with your boss also aligning the threshold when you get your bonus inline with your peers to bring it all in-line, because it will make it easier for him to manage if everyone is the same.