ADJUDICATION OFFICER DECISION

Adjudication Reference: ADJ-00012613

Parties:

Complaint(s):

Date of Adjudication Hearing: 16/04/2018

Workplace Relations Commission Adjudication Officer: Jim O'Connell

Procedure:

In accordance with Section 41 of the Workplace Relations Act, 2015] following the referral of the complaints to me by the Director General, I inquired into the complaints and gave the parties an opportunity to be heard by me and to present to me any evidence relevant to the complaints.

Preliminary issue:

Respondent submitted for the Complainant to be in a position to maintain her claim, it would have to be established that a deduction in wages has occurred and that she was not paid the total amount “properly payable” to her as set out by virtue of section 5(6) of the Payment of Wages Act 1991.

The claimant submitted that she has been paid a bonus on annually since she commenced employment with the respondent.

Findings

I find in accordance with the Payment of Wagers Act 1991

The definition of

“wages”, in relation to an employee, means any sums payable to the employee by the employer in connection with his employment, including—

(a) any fee, bonus or commission, or any holiday, sick or maternity pay, or any other emolument, referable to his employment, whether payable under his contract of employment or otherwise, and

(b) any sum payable to the employee upon the termination by the employer of his contract of employment without his having given to the employee the appropriate prior notice of the termination, being a sum paid in lieu of the giving of such notice:

Decision

I find that the that the bonus payment has become an “applied term” in the claimant’s contract of employment

Background:

The claimant worked for the respondent as a trainee/solicitor from March 20th, 2006 to July 11th, 2017. The claimant submitted that she did not receive a copy of her contract of employment. It was further submitted by the claimant that from approximately 2011 she received annual bonuses from the respondent, which increased year on year. The claimant also stated that during pay discussions in 2015 a managing partner communicated to all solicitors that the respondent was implementing a new bonus scheme which meant that bonuses would become a more substantial element of pay. The calculation was based on fees earned, billable hours recorded and debt recovered and it meant there was a better incentive for people who worked hard. In or around March 2016 the claimant had an annual review with the head of the Employment team of which the claimant was a part of. It was communicated to the claimant that she would receive a €5000 gross pay increase to €80000 and a €7000. The claimant was extremely disappointed with this given what she believed was a prior commitment by the respondent to pay €10000. The claimant raised the issue with a managing partner on the 22nd March 2016 and outlined that she felt undervalued and that she had a reasonable expectation of a salary of about €100000 considering her high performance. The managing partner informed her that the respondent could not pay a salary of €100000 as this would be more in line with a partner’s salary. The managing partner however rectified her bonus to €12500 for 2016 and increased her salary to €86000 and it is alleged that the managing partner would incentivise her with a bonus whereby if she made her target for year end 30/9/16 she would get her last bonus plus a third of what she made over her target. At no time did the managing partner say that this bonus was discretionary, nor did he make it conditional on anything other than her reaching and exceeding her target. By year end, 30/9/2016 the claimant had significantly exceeded her target with final fees of €385,000 against a target of €285,000. This resulted in fees of €101,000 over her target which meant the bonus the claimant was expecting was €12,500(baseline bonus) plus one third of €101,000(incentive bonus) giving a total of €46,166.

The claimant was approached in the summer of 2016 about an opportunity to move into a senior HR role with a leading multinational company. The claimant made the difficult decision to leave the respondent but felt it was an opportunity too good to turn down. The claimant would not be taking the role until after her maternity leave. On the first week in September 2016 the claimant informed the respondent that she would be leaving. The claimants last day in the office was September 29th, 2016. Two weeks prior to this the claimant had a discussion with her department head about her leaving payments and had suggested it would benefit both her and the respondent if they could agree a severance payment of an overall lower amount than her bonus and holiday entitlements and that she could leave immediately and it would be financially beneficial to both her and the respondent. The managing partner said he would consider it. Having not received any response to her suggestion and was disappointed by the lack of communication from the respondent the claimant accepted that she instead would receive what was previously agreed on termination. At this point there was no suggestion that she would not receive those payments or that there was any dispute over those payments. In a scheduled meeting with the managing partner on the claimants last day of employment with the respondent on July 11th, 2017 she specifically asked about her third over target incentive and was told it would be paid and,”I don’t remember that, but fine”, there was still no mention that she would not receive the bonus or that bonuses were discretionary. The claimant left the meeting with the understanding that the bonuses would be paid. After a number of attempts to get her final leaving payments she finally received final payment figures including a bonus of €5000. The claimant emailed the managing partner saying the figures were wrong and he replied immediately saying she should take the €5000 on account and he would look into it for her. Over the course of the following 3 months the claimant sent numerous emails and request for call backs which were wholly ignored or was told the managing partner would respond to her later. Following a request by the claimant to meet, in a last effort to reach a reasonable resolution, the managing partner informed her he would only pay €6000 gross. No reason was given as to how he had arrived at this figure or the basis on which the respondent refused to pay the bonus previously verbally agreed. When the claimant questioned this she was informed that,” there is no entitlement to any bonus. Bonuses are discretionary. Always are and always have been.”

The respondent submitted that there is nothing within the claimant’s contract of employment that entitles her to a bonus. There is no right or entitlement to a bonus. The respondent may conduct reviews of employees and consider their eligibility for a bonus but it does so under a system and on a basis, that is entirely discretionary. The claim is wholly denied by the respondent. There is no agreement between the parties regarding an amount that could be deemed “properly payable”, or not, to the claimant. The claimant is attempting to impute an entitlement arising out of an alleged discussion the facts of which are entirely in dispute. The respondent submits that in all the circumstances of the case, their actions were those of a reasonable employer. They always retained absolute discretion with regard to the payment of bonuses and exercised this discretion in a reasonable fashion

Findings:

Both parties made written and verbal submissions at the hearing.

I find that which is already covered in the preliminary issue that;

“wages”, in relation to an employee, means any sums payable to the employee by the employer in connection with his employment, including—

(a) any fee, bonus or commission, or any holiday, sick or maternity pay, or any other emolument, referable to his employment, whether payable under his contract of employment or otherwise, and

(b) any sum payable to the employee upon the termination by the employer of his contract of employment without his having given to the employee the appropriate prior notice of the termination, being a sum paid in lieu of the giving of such notice:

. I find that the claimant did received a bonus annually and as such it became an applied term in her contract of employment. I find that the claimant is seeking €46,166as a bonus payment based on her contributions to the respondent business along with the understanding she had taken from the meetings.

I find that a number of meetings took place between the parties but there are no documentation or minutes such meetings.

I find the lack of minutes or written documentation leave a lot to be desired. I find based on the evidence that the claimant had an expectation of an enhanced bonus based on her productivity and returns. I find that the respondent offered the claimant the sum of €6000 which was not accepted by the claimant. I find that the respondent having made the offer accepts that bonus was due to the claimant.

In these circumstances and due to the lack of appropriate documentation I am making the following;

Decision:

Section 41 of the Workplace Relations Act 2015 requires that I decide in relation to the complaint(s)/dispute(s) in accordance with the relevant redress provisions under Schedule 6 of that Act.

I find that the complaint to be well founded and I award her €26, 000 gross as bonus payment.

Dated:   5th November 2018

Workplace Relations Commission Adjudication Officer: Jim O'Connell