Wherever you are in your career, it can be a difficult situation to navigate. You’ve just discovered the bonus you will (or won’t) be paid, and despite performing well throughout the bonus year, the figure is far lower than you had expected. What now?
Firstly, take a deep breath. Regain your composure. You don’t want to ruin your relationship with your employer or come across as being unreasonable. Begin by rationalising the grounds on which you can legitimately challenge your bonus. If you can’t articulate why you deserve more, your complaint probably won’t get very far.
When should I challenge my bonus?
Start by checking your employment contract. Does it say anything about the payment of a bonus and how it should be calculated?
Some bonus schemes say that the employer has absolute or partial discretion to award a bonus. Alternatively, it might say you are contractually entitled to participate in a bonus scheme. It might even go further than that and say you are entitled to a certain amount of bonus in accordance with a specific bonus formula – for example, company financial performance or sales or performance targets specific to you.
If your employer has failed to comply with the terms of your employment contract (or separate bonus policy), you may have grounds for challenging the sum offered by your employer.
Even if there’s nothing in your contract about bonuses, or your contract says the bonus scheme is discretionary, but you’ve received one on a regular basis in the past and you reasonably expected to receive a bonus this time around, you may be entitled to a bonus by reason of custom and practice.
Likewise, if you feel that your employer has exercised its discretion in relation to the bonus award in an arbitrary, irrational or capricious way, you may have good grounds for contesting the failure to make an award of a bonus (or the size of the award if its lower than it ought to be).
If you suspect you’ve been treated unfavourably or less favourably than a colleague on the basis of a protected characteristic, for example, because of your age, sex, or race, you might assert that the employer’s conduct in relation to the bonus award is discriminatory.
Take a deep breath. Regain your composure. You don’t want to ruin your relationship with your employer.
How do I contest a disappointing bonus?
In most cases, the best course of action is to approach your line manager or HR first. Speak to them informally. Do not blame anyone specifically or use aggressive language.
Explain that you have been left feeling disappointed by the bonus offered and point to the alleged breach of your bonus terms. Your employer might have good reasons for its decision, which may have resulted from a matter affecting the entire company, not just you.
If your employer’s response remains unsatisfactory, you should speak to a lawyer and take advice on what you can do next.
Talking’s not working. What now?
Your lawyer will be able to advise you on the steps you should take (which will depend on your objectives and the terms of the bonus scheme). That might involve raising a formal grievance or even litigating.
At Stewarts, we often resolve disputes arising from the non-payment or amount of a bonus by negotiating with our clients’ employers on their behalf. When the situation calls for it, we will bring legal proceedings in the High Court and Employment Tribunal to recover bonuses owed.
To discover how Stewarts can help assist you with bonus disputes, or any other employment matter, please call 020 7822 8000 or visit stewartslaw.com