Complainant

Respondent

Parties

Michael  Notdurfter

Staycity Limited

Representatives

  N/A

 N/A

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-00060226-001

24/11/2023

The Complainant worked as a Digital Marketing Executive for the Respondent from 19 September 2022 until 9 June 2023. The Complainant earned an approximate gross annual salary of €44,612.49 (or an approximate net annual salary of €32,893.54). The Complainant worked approximately 37.5 hours per week. The Complainant submits that he was entitled to a bonus payment of approximately €2,097.85. The Respondent disputes his entitlement to the bonus payment.

The Complainant submitted that he worked as a Digital Marketing Executive in the Respondent’s Digital Marketing Department. He submitted that he was tasked with implementing the global marketing strategy in the German market. He submitted that he was also tasked with starting local initiatives in the German market. The Complainant submitted that in 2022 he worked remotely while living in Italy; and that from February to May 2023, he lived and worked in Dublin.

The Complainant submitted that in August 2022, prior to accepting the job offer, he was informed by the Respondent over the phone that he would receive a bonus payment of between 10% and 20%, which would depend on the company’s performance. The Complainant submitted that he was also told this verbally, while working for the Respondent. The Complainant submitted that on 24 August 2022, he emailed the Respondent and requested further details, but he did not receive a response. The Complainant provided a copy of his contract of employment dated 5 September 2022 which states:

“Bonus payments: There is a discretionary bonus scheme in operation in respect of your employment, details of which will be issued to you separately.”

The Complainant submitted that he received no further written details regarding the bonus.

The Complainant submitted that he was never told that he would have to stay with the Respondent to receive the bonus. He submitted that the Respondent first informed him in an email dated November 2023 that he had to be employed by the Respondent to receive the bonus.

The Complainant submitted that he received his 2022 bonus in two parts – in December 2022 and February 2023. The Complainant submitted that his last day of employment was 9 June 2023. He submitted that he “assumed” that his 2023 bonus would be paid pro rata for the time that he worked for the Respondent in 2023, as he had “contributed” to the Respondent during this time. The Complainant submitted that he believed that the 2023 bonus would be in the region of 15%. The Complainant submitted that his calculation of €2,097.85 was based on the 2022 bonus payment he received. He submitted that he should have been paid this 2023 bonus after he left the Respondent.  

Ms. Callaghan submitted that she is the Head of People Experience and that she started working for the Respondent in April 2023.

Ms. Callaghan submitted that the 2023 bonus was a discretionary bonus, as per the Complainant’s contract of employment. Ms. Callaghan submitted that the bonus is dependent on company and individual performance. Ms. Callaghan submitted that the bonus payment is a company decision, taken on an annual basis. Ms. Callaghan submitted that three years ago, no bonus was paid to employees. Ms. Callaghan submitted that “in terms of capturing it, it is framed as 10%”. She further submitted that the 2022 bonus payment was actually 15%.

Ms. Callaghan submitted that the Respondent makes a decision concerning the bonus amount towards the end of the year. She submitted that it is then then paid in two parts – 50% in December and 50% February. Ms. Callaghan submitted that the 2022 bonus was paid in December 2022 and February 2023. She further submitted that the first part of the 2023 bonus was paid in December 2023 and that the second part will be paid in February 2024. Ms. Callaghan submitted that the Complainant left the company in June 2023 and was not employed by the Respondent when the Respondent reached a decision concerning the bonus amount or when the first part of the bonus was paid in December 2023.

The Law:

The Payment of Wages Act 1991 as amended (the “PWA”) regulates deductions to an employee’s wages and prohibits unlawful deductions.

Under the PWA, “wages” are defined as:

"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”.

Section 5 of the PWA deals with the regulation of certain deductions made by employers.

Section 5(6)(b) of the PWA states that failure to pay amounts due on the occasion when due “…shall be treated as a deduction made by the employer from the wages of the employee on the occasion.”

Section 5(6) of the PWA was considered in Marek Balans v. Tesco Ireland Limited [2020] IEHC 55. In that case, MacGrath J. re-affirmed the proposition that the first matter to be determined is what wages are properly payable under the contract of employment. If it is established that a deduction within the meaning of the PWA has been made from the wages properly payable, it is then necessary to consider whether that deduction was lawful.

As regards discretionary bonus payments, in Cleary & Others v. B&Q Ireland Limited [2016] IEHC 119, McDermott J. accepted that while an employer has a wide discretion under the terms of the contract and scheme, it must act reasonably. Moreover, he found that “[t]he discretion to withdraw the bonus scheme at any time, in my view, was always intended to apply in futuro and attached to the conferring of bonuses, as yet un-accrued, under the terms of the scheme.” The interpretation of this decision is that once a bonus has been earned it cannot be revoked. However, it’s important to note that this is in the context of a written contractual obligation. In this case, the employees had been provided with written details of the bonus calculation and the bonus scheme eligibility criteria. Moreover, the bonus was not contingent upon the profitability of the company or the satisfactory performance of the employee.

Findings and Conclusion:

The Complainant submitted that he did not receive the 2023 bonus of approximately €2,097.85, which he was entitled to. The Complainant submitted that his last day of employment was 9 June 2023 and that he should have been paid a bonus pro rata for the period that he worked in 2023.

I note that the Complainant’s contract of employment provides:

“Bonus payments: There is a discretionary bonus scheme in operation in respect of your employment, details of which will be issued to you separately.”

I note that the Complainant was not provided with any other written information concerning the discretionary bonus scheme or its criteria. In particular, he did not have any details concerning eligibility criteria or pro rata payments. It was the Complainant’s evidence that he “assumed” that he would be paid the bonus on a pro rata basis when he left.

I note that the Complainant left the Respondent in June 2023, some five to six months before: a decision had been reached concerning the 2023 bonus amount; and the first part of the bonus was paid in December 2023.

In the absence of a written agreement specifying the details of the discretionary bonus scheme and the bonus eligibility criteria, I cannot find that it was “properly payable” to him. Therefore, I find that this complaint is not well founded.

For the reasons outlined above, this complaint is not well founded.

Payment of Wages Act 1991, Bonus.