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Think about job security before challenging a bonus


A discretionary bonus normally makes up a large part of my pay, but this year my award is really low. What can I do about it?

Victoria Clark, associate in our employment team, says:

First, review your employment contract alongside any policy your employer has in relation to the bonus scheme. Is it clear that you will only receive a bonus at your employer’s absolute discretion? If so, you might have difficulty challenging the level of payment received.

You are likely to have stronger grounds for a challenge if your employment contract or policy suggests you will receive a fixed amount each year, or if there is a prescribed calculation that has not been followed.

Similarly, your argument will be stronger if your employer has historically paid you the same amount of bonus – suggesting that a fixed bonus payment is an implied
entitlement under your contract.

However, the most effective way to challenge the bonus is to arrange an informal meeting with your employer. You should go prepared with a clear and concise report to demonstrate where your performance has exceeded targets, and to explain how you have added value to the business during the year.

Your report should also touch on the level of bonus you believe would more accurately reflect your input over the past 12 months.

If relevant, you should also be prepared to discuss areas where you feel the employer has deviated from either the express or implied terms of your employment contract or the company’s bonus policy.

By approaching your concerns in this way, your employer is likely to appreciate your efforts over the past 12 months more fully and consider a solution that suits you both.

Source:  The Financial Times, May 2013

Disclaimer: Anything posted on this blog is for general information only and is not intended to provide legal advice on any general or specific matter. Please refer to our terms and conditions for further information. Please contact the author of the blog if you would like to discuss the issues raised.