Complainant

Respondent

Anonymised Parties

A Worker

A Communications Company

Representatives

  The claimant represented herself

employment counsel

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-00033871-001

19/01/2020

In her complaint form to the WRC, the claimant submitted as follows:

On 9th December 2019 I gave 1 months’ notice of my intention to cease my employment with the respondent The 31st December was the end of Quarter 2 and I had completed the Quarter & worked hard with the team to reach and exceed the targets set. Aside from meeting the Quarter target we had been advised that exceeding this target would mean that we would be given the target that we missed out on in Quarter 1. This meant that the bonus due to be paid to me would have been €1,450 full bonus for Quarter 2 plus €725 group target from Quarter 1, a total of €2,175 (gross). Bonus payments are normally paid two pay dates after the Quarter ends. I was finishing up on 9th January which happened to be pay day. Although final figures were not confirmed it was evident that the targets had been met. I had previously asked Mr A , Head of Credit Management if I would receive my bonus payment in my final pay packet or if it would be paid in February. He advised I would not receive my bonus as I would no longer be an employee with the respondent when the payment was being made. I argued that this was unfair and wrong as I had been present and worked the full Quarter and had contributed positively to the targets being reached. Mr.A advised this was company policy. I then argued that I was currently still a company employee and that the bonus could be put through for me in my final pay. Mr.A advised this would not happen and advised I contact Ms.A HR Business Partner to state my case. She confirmed company policy was not to pay bonus payments if a person was not an active employee at the time of payment even if the bonus was earned and dismissed my argument that I was a current employee and there was time to have my bonus calculated and put through payroll before I left. I attended a team meeting on 9th January, the day I was leaving, in the conference room.

All of the team were present except Ms.B (out sick) and the meeting was led byMr.A . The purpose of this meeting was to inform the team that we had a very successful second quarter and that all personal and group targets had been reached and as a result our bonuses would be paid in full but we were still awaiting confirmation from Mr.B , Finance Director that the missed Quarter 1 bonus would be paid. My colleagues have since confirmed that indeed this bonus payment has also been confirmed.

The note advising you have to be a current employee in order to be paid a bonus is a line in my contract. However, I did not think it applied to me as I was still in employment after the Quarter end and had yet to receive my final wage. This is unfair as I had worked to contribute and support the team and my colleagues. I had not been informed by my line manager Ms.B or by Mr.A when I handed in my notice that I would not be paid my bonus if I was to leave before February's pay date. I feel this is a deliberate manipulation by the respondent not to pay monies earned in the form of bonus or commission without any good cause or reason and as this bonus is part of my pay deal and not an extra, I feel they are withholding what I have earned.

At the hearing the claimant advised that her complaint related to 2 periods , quarter 1- 1.07.2019-30.09.2019 -€725 and Quarter 2 – 1.10.2019 – 31.12.2019 - €1,450.She set out a chronology of the target achievements and explained that the bonus was paid to all team members on the 6.02.2020.She contended that the custom and practise was that bonuses were paid on the second pay date following the quarter end.The claimant submitted that she was a fully contributing team member for the entire period at issue and elaborated on the challenges of getting payments during the festive period at the end of the year – she reiterated that all targets were achieved. She contended that the company could have paid her on the 9th.Jan. 2020, which was the day she left. She referenced the authorities being invoked by the respondent and submitted that in Cleary & Others v B&Q Ireland Ltd. the Court had held that the employer’s discretion must be exercised reasonably but the company had failed to act reasonably with respect to the claimant. The claimant argued that her contract was extremely vague and had been manipulated by the company without regard to her welfare. She stated that the references to the bonus was written in such a way that in order to have received the bonus she would have had to give 2 months’ notice or alternatively 1 months’ notice and forego 20% of her pay.The claimant asserted that all discussions about her terms and conditions of employment took place with the recruitment company and not the respondent and that discrepancies later emerged between the conditions outlined by the recruiting agency and the respondent. She was informed that personal bonuses were to be paid monthly but this was later changed to quarterly and had she been made aware of these changes, it was unlikely that she would have taken the job. The claimant submitted that her line manager had failed to advise her that she would be foregoing her bonus when she gave her notice and she contended that it was the lack of fairness by the company that triggered this complaint.

Under cross examination the claimant stated that she did not take note of the provision in her contract which provided that the bonus would only be paid to serving employees. The claimant stated that the clause was unfair and acknowledged that she herself had decided on her departure date.

In their written statement, the respondent submitted as follows:

A. GENERAL BACKGROUND:-

1. The respondent company is a national telecommunications service

provider. The respondent currently employs approximately 3,000 employees across Ireland.

2. The Claimant was employed as a Credit Management Representative in its Shared

Finance function pursuant to a contract of employment with a commencement date of 18 July

2018. The contract states under paragraph entitled “Incentive Payments” that:

You may be eligible to receive such incentive payments as are set out in the Schedule hereto.

Any such incentive payments are payable purely at the discretion of the Company and shall not form part of your contractual or pensionable remuneration under this Agreement. The Company reserves the right to alter the terms of any incentive targets or withdraw t them without any prior notice.

You will only benefit from the Incentive Bonus if you are a current employee at the time of payment.

The Company will reimburse you for any other reasonable business-related expenses provided same are submitted in accordance with Company expense policy and only on production of a valid receipt.

Any employment benefits or benefit plans that you may be eligible for participation in pursuant to this Agreement or otherwise shall be subject always to the rules and conditions applicable to each benefit and/or benefit plan. The Company reserves the right at all times to vary or discontinue any benefit plans in which you may be entitled to participate. The Company shall also have the right to substitute new benefit plans for any plan in which the Company may be eligible to participate. The Company shall be under no obligation to replace any terminated or discontinued benefit plan and/or to provide the same or similar benefits in lieu thereof.

The Claimant’s bonus entitlement as set out in the Schedule to her employment contract was in the range of 0-20%. Bonuses are payable on a quarterly basis for the Claimant’s role and would be in the payroll run following the announcement i.e. if bonuses were declared in January, payment would be made the following month.

3. On or around 9 December 2019, the Claimant resigned from her employment by giving one months’ notice to her manager in accordance with her contract of employment. This resignation was accepted by the Claimant’s manager and the leaver process was instigated accordingly with a leave date of 9 January 2020 in line with the Claimant’s notice.

4. On the 6 January 2020, the Claimant spoke with Mr. A Business Risk and Collections Manager and queried the status of her bonus. Mr. A informed the Claimant that the company policy was that you must be an employee at the time of payment otherwise you would not be eligible to receive the bonus. The Claimant informed Mr. A that she would be contacting HR in relation to the bonus and she subsequently contacted Ms A., HR Business Partner by email seeking confirmation that her bonus for the quarter ending 31 December 2019 would be paid to her in her final payroll. Ms. A responded by return that an employee must be employed at the time of payment in order to be eligible to receive the bonus payment.

5. The Claimant subsequently left employment on 9 January 2020 in line with her resignation notice. No bonus payment was paid to the Claimant.

6. The claimant states in her complaint form that she attended a team meeting on 9 January 2020 and alleges that the purpose of the meeting was to announce that personal and team targets had been reached and bonuses would be paid in full. The company’s evidence will be that the purpose of this meeting was by way of a “catch up” following Christmas break and to notify the team of the Quarter 3 targets. It is not correct that Mr. A announced that all personal and team targets were reached and bonuses would be paid in full. Mr. A will state that, in response to a team member question, he informed the team that personal targets had been reached but he was awaiting Finance confirmation as to the cash collection figures which he required to assess the team target. These figures were not available at the time of the meeting. The Quarter 1 bonus referred to by the Claimant was not actually a bonus referable to Quarter 1. As the team did not meet their targets in Quarter 1, it was proposed that if they exceeded targets in Quarter 2, they would get an extra amount to represent the bonus amount missed in Quarter 1.

7. No announcement was made until all targets were confirmed as reached and furthermore, no bonus was declared until the figures were signed off by Mr. B, Finance Director. The governance process regarding bonuses was not completed until 22 January and therefore applicable bonus was not declared until then. At the time of the claimant leaving employment, there was no declared bonus as there was no confirmation of targets and no approval of bonuses.

8. The said bonus was not paid until 6 February at which point, the Claimant was no longer an employee of the respondent. Accordingly, no bonus was paid to the Claimant.

PAYMENT OF WAGES ACT 1991

Section 1 of the Payment of Wages Act 1991, as amended defines “wages” as:

“in relation to any 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….:”

It is a well-established precedent that “sums payable” shall mean “properly payable” therefore, there must be an entitlement to such sums in order for same to be “payable” within the meaning of the Act.

This is incorrect for the Claimant to claim that her bonus payment was “part of her pay deal” and imply that it is a mandatory entitlement. The contract of employment clearly states that incentive payments are payable “purely at the discretion of the Company” and shall not form part of the contractual or pensionable remuneration under the contract of employment.

The contract of employment is clear that an employee must be a current employee at time of payment in order to benefit from the payment. The Claimant is aware of this provision in her contract and although she claims she did not think it applied to her as she was still an employee at the Quarter end, this position is, at best, misconceived on her part. The bonus was payable on a quarterly basis and payments would always have been made in the payroll run following the declaration of bonuses i.e. if bonus was declared in January then payment would be in the following month. The Claimant would have been aware of this payment schedule due to her years of employment with the respondent and therefore she would have been aware that if she handed in her notice in December, she would be leaving in January and therefore she would not be an employee at the time of payment. It was open to the Claimant to hold off on her resignation until January to ensure she was still an employee in February in order to receive the payment. Accordingly, it is submitted that the Claimant was not entitled to payment of the Quarter 1 or Quarter 2 bonus payment as she was not an employee of the respondent at the time said bonuses were declared nor at the time of payment of the bonuses as per the contract of employment. Accordingly, it is submitted that said bonus payments were not “payable” within the meaning of the 1991 Act.

We refer to the Labour Court decision in Bord Gais Energy v Thomas PWD1729 whereby the employee claimed an entitlement to a performance related bonus in circumstances where he terminated his employment prior to payment of said bonus. In that case, the Labour Court placed considerable weight on the fact that the employee’s contract sets out the eligibility requirements for payment of the bonus. The Labour Court found that the employee did not meet the criteria to be eligible for a payment under the bonus scheme and therefore said bonus was not “properly payable” and no contravention of the Act occurred.

A copy of this determination is attached.

The Claimant’s contract of employment clearly sets out that terms and conditions are applicable to incentive payments. The Claimant signed and accepted this contract. The Claimant, in her claim form, clearly shows an awareness of her contractual provisions. It is also submitted that the termination of the Claimant’s employment and date of termination were set by the Claimant herself for personal reasons.

Accordingly, we respectfully submit that the within claim be dismissed. In response to the notes that were read out by the claimant at the hearing and later furnished to the WRC., the respondent submitted as follows:

1.     The Claimant claimed that the Company’s treatment of her in respect of her final bonus was “unfair” as she claimed she had “earned” the bonus by meeting her targets. As per Mr. A’s evidence, it was not confirmed that all targets had been met by the time of the Claimant’s leave date and the required governance process had not been completed in relation to any bonus payments due until 22 January 2020.

2. The Claimant herself admitted that the “custom and practice” of the company was for bonus payments to be paid approximately 2 pay dates post confirmation of the bonuses. This is to allow for the governance process to take place. The Claimant was aware of that fact when she handed in her months’ notice and she was aware of the contractual requirement that she had to be an employee at the time of payment. In any case, the bonus payment which was the subject of this claim was paid approx. 6 weeks after being declared.

3. As stated in the hearing, the Respondent are not relying on the Cleary v B&Q case. We rely on the Bord Gais Eireann v Thomas Labour Court decision which referenced the Cleary case by way of distinction.

4. The Claimant has submitted a copy of “minutes” allegedly from the meeting of 9 January 2020. The Claimant states that these “minutes” were provided by her former colleague. We submit that no evidential weight can be attributed to these “minutes” as same amount to hearsay evidence. No witness was provided by the Claimant to be questioned on said notes during the hearing and therefore the evidence could not be tested by the Respondent. In any case, the “minutes” do not back up the Claimant’s claim that she was told by Mr. A at this meeting that “personal and team targets were reached, and bonuses would be paid in full”. There is no reference in the “minutes” to payment of bonuses. In fact, the “minutes” accord with Mr. A’s evidence that in response to a team member question, he informed the team that personal targets (i.e. the 90%) had been reached. We respectfully submit that no account may be taken of these “minutes” submitted by the Claimant.

5. Furthermore, no evidential weight can be attributed to the claims made by the Claimant regarding what the Recruitment Company allegedly informed her of the contract. Firstly, in relation to “flexibility”, this does not form part of the Claimant’s claim under the 1991 Act and secondly, in relation to allegedly having a monthly personal bonus, this was not ever the case in the within company and is not reflected in the contract signed by the Claimant nor has she submitted any evidence of same. No evidence was put forward by the Claimant to support these allegations (which are denied) and the respondent are a stranger to same. The fact is that the Claimant received an offer of employment, she clearly reviewed the terms and she accepted and worked to the terms and conditions of the role on that basis.

By way of summary, we submit that the Claimant can only be awarded what she is entitled to i.e. what was properly payable under the 1991 Act. There is no question of fairness to be considered. The Claimant was contractually required to remain an employee at time of payment in order to receive the bonus. She was aware of this requirement and voluntarily and willingly accepted it as part of her terms and conditions of employment. It was within her control to time her departure in order to receive the bonus. However, for her own personal reasons, the Claimant did not do so and the Respondent applied its bonus policy and contractual right to the Claimant in the same manner as it has to all other staff. Notwithstanding that there is no question of fairness to be considered in the within claim, we submit that it would be manifestly unfair to require the Respondent to deviate from its pre-existing policy in circumstances where the Claimant did not meet the criteria for payment when all circumstances arose as a result of the Claimant’s own actions which she took willingly and voluntarily and were within her control.

Again, we respectfully submit for the within claim to be dismissed.

At the hearing it was submitted that the bonus provisions in the claimant’s contract were extraordinarily clear. Mr.A gave evidence on behalf of the respondent and set out his account of his engagement with the claimant following the tendering of her resignation and the team meeting on the 9th.January – he maintained that he advised the meeting that the authorisation of bonuses would not arise until the 22nd.January.Mr.A advised that a number of former employees had fallen foul of the bonus provision as they did not benefit if they had left the company’s employment.

I have reviewed the submissions and the evidence presented at the hearing and noted the respective position of the parties. While I acknowledge the extent to which the claimant is aggrieved by the denial to her of the bonus(es) in circumstances where she contributed to its achievement , there is no dispute between the parties in relation to the contractual clause which provides that “ You will only benefit from the Incentive Bonus if you are a current employee at the time of payment”. The claimant left the company on the 9th.Jan. 2020 and the bonus was paid on the 6th.February 2020. In these circumstances the bonus(es) could not be deemed to be properly payable and accordingly I do not uphold the complaint. I am satisfied that this decision is consistent with the deliberations of the Labour Court in PWD1729.

Contract Clause re bonus