Complainant

Respondent

Anonymised Parties

Space Planning Manager

Pharmacy Chain

Representatives

Act

Complaint/Dispute Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991

CA-00029082-001

16/06/2019

The Complainant was employed as a Space Planning Manager from 15th October 2018 to 10th May 2019. She was paid €923.00 per week. She has claimed that the Respondent company made an illegal deduction from her wages by not paying her pro rata of her annual bonus entitlement.

The Complainant stated that she had a contractual entitlement to a 10 % of salary annual bonus. When she tendered her resignation on 10th April 2019 she enquired from her manager about the payment of the bonus and it was verbally confirmed to her that she would receive it. Later it was confirmed in an email by her immediate manager that she would receive a pro rata payment of the bonus amounting to €2,400. On 7th May 2019 she received a call from her manager to advise that she would not be getting the bonus. He told her that the owner had informed him that it was policy not to pay a bonus to employees with less than 12 months service. There is no evidence of this policy anywhere, either in her contract or staff handbook. The HR Manager confirmed that there was no other bonus policy. She emailed the owner who passed on the mail to her manager who reaffirmed that she would not be getting the bonus. She advised that her Health Insurance entitlements are also described as annual and had not been paid up to date but were in fact honoured. She believes that the Respondent has made an illegal deduction from her wages and has breached this Act. She is seeking €2,400.

The Respondent stated that the company had met her and advised her that her manager had made a mistake. It was not typical to pay a bonus mid-year. She had just finished her probation and so the owner had decided not to pay her a part bonus mid-year. They advised that her immediate manager made that decision to pay without consulting with HR. It was a mistake. This is not an illegal deduction from wages. This claim is rejected.

I note that in Sec 1(1)(a) of the Payment of Wages Act a bonus is defined as part of wages, it states “any fee, bonus or commission”.

I find that this bonus was part of the Complainant’s remuneration package.

I find that annual means once a year, the bonus accrues as the year goes on. In this case one wonders what would occur if a person joined the company mid-year and continued in employment. Would they receive a pro rata payment at year end?

I find that an interpretation of a contract is to give effect to the intention of the contract.

I find that the contract should specify the conditions under which the bonus is paid especially if there is ambiguity.

I find that if there is ambiguity then in a sense of fairness and equity one must be sympathetic towards the Complainant in such a situation.

I find that the Respondent is stating this this is an annual bonus so is paid annually. It is not typical to pay it mid-year and on a pro rata basis.

I find that there is no policy to provide for that. There is no custom and practice to support that position.

So, I find that the Respondent is trying to import into the contract what is not there.

I find that the principle of “Contra proferentem” should be considered in this case. This principle is also known as "interpretation against the draftsman", it is a doctrine of contractual interpretation providing that, where a promise, agreement or term is ambiguous, the preferred meaning should be the one that works against the interests of the party who provided the wording.

Therefore, I should find that the preferred meaning should be the one that works against the interests of the Respondent and in favour of the Complainant, as it was the Respondent that drafted the contract of employment.

I find that in the circumstances of ambiguity the interpretation should be that the Complainant is entitled to the part bonus as claimed.

Needless to say, it is up to the Respondent to clear up any ambiguity in the future. They should set out what they intend to happen in such a situation going forward and so specify what and how it should be stated.

I find that the Respondent has breached Sec 5 of this Act and they have made an illegal deduction from the Complainant’s wages.

Non -Payment of annual bonus on a pro rata basis