NSW Bonus Eligibility Under Employment Contract if I Resign?

[djlenny]

Hi Forum! I have a query regarding the following statement in my employment contract. I have resigned and will leave the company mid Jan 2015, I asked if i would be intitled to a bonus as per the below in my contract and have been told "No as the company only pays if you are employed at time of bonus payed (around march) and there is not a written but a unspoken policy around this. I have been employed for nearly 6 years as well.

"Bonus Arrangement
1. You are currently eligible to participate in the Company's discretionary bonus arrangement. Your bonus opportunity is 12.5% of the Notional Base Salary. You are not automatically entitled to a bonus of 12.5% of a Notional Base Salary.

2. If you have more than six months service in the bonus year (January to December), but less than 12, your bonus will be calculated on a pro-rata service basis. If you have less than six months service in the bonus year, you will not be eligible for a bonus.

3. The Company may operate or amend or terminate one or more bonus or incentive schemes from time to time. Any amount of bonus or incentive scheme payment made to you is paid at the discretion of the Company and does not form part of your remuneration and will be inclusive of any superannuation contribution as stipulated in cl 4.3. the fact that the Company offers or provides such a benefit in any given year is not a promise or undertaking to offer or provide any similar benefit in any other period of your employment."

 

[Sophea]

Hi djlenny,

Whilst it does seem unfair that they would not pay you a bonus since you have served the full 12 months of the year, I think the clause is drafted so as to afford your employer maximum discretion when it comes to the payment of this bonus. The fact that its referred to as a discretionary bonus arrangement and the following statement:

the fact that the Company offers or provides such a benefit in any given year is not a promise or undertaking to offer or provide any similar benefit in any other period of your employment.

would likely absolve them of any 'obligation' to pay any bonuses.

An employment lawyer may be able to shed some more light on this, but as I read it, the company is not bound to pay you a bonus by virtue of this clause. And of course there is no legal requirement for employers to pay bonuses, so if they don't want to they don't have to, even when it is clearly unfair in your circumstances.

 

[djlenny]

Thanks for the response. Just the way Company has handled what was a simple request and all the carrying on about unwritten policies has been frustrating and i hope they take constructive advice to adjust and update contracts and policy for the next generation....