The Role of the Employment Solicitor in Securing Employee Bonus Payments

Bonuses have become controversial in recent years with bank executives receiving obscene amounts of money for what is viewed by some parts of society as diabolical performance. In all of this bad press there are those not employed by the large financial institutions that have bonuses withheld every day. There are a few simple guidelines that a good employment solicitor can help with that can either avoid the issue in the first place or can certainly help employees who are having a bonus withheld.

The first thing to note is that before starting work in a new role potential employees should have an employment specialist look over their employment contract especially if there are bonuses included as part of the remuneration package. A good employment solicitor will ascertain whether the bonus payment is guaranteed or discretionary. This piece of information alone could ensure that before an employee’s starts a new job they know what the ground rules are to ensure that they stand the best chance to receive their bonus.

Guaranteed bonus payment

A guaranteed payment is usually the most common type of bonus and for the employee provides the most straight forward bonus structure. The employer as part of the employee’s employment contract, guarantees payment of a bonus irrespective of the performance of the company or the employee. If the employer fails to pay the bonus then the employee has the right to claim the bonus through the courts. Sometimes these bonuses are paid as a ‘golden handshake’ when an employee arrives at the company as a way of being compensated for any loss of earnings the employee has incurred by leaving the previous job early for example to take up their new role.

Discretionary bonus payment

The discretionary bonus payment is far more complex and is often the cause for dispute; largely due to the fact that payment may be dependent on performance of certain criteria or targets of individuals, or the company as a whole. These performance factors are key as to whether a court will rule that a bonus should or should not be paid to an employee if the bonus has been withheld.

The court will look at some of the following information to help them make a decision;

  • The performance and treatment of the employee against other employees in a similar role
  • The performance of the company and its departments as a whole.
  • Other similar cases in similar industries.

The fact is that employees and employers alike will undoubtedly need the services of an employment specialist to ensure that employment contracts are legally binding and if they are not where breaches of the law have occurred.