Q. I worked for a bank and was paid an annual "discretionary" bonus depending upon how much money I brought into the bank. I had a good year last year and the Bank had decided to pay me bonus. However, later I was dismissed (for reasons not connected with my performance) and the Bank have reneged on the promised bonus saying that, as the bonus was discretionary, I cannot insist on it being paid. Surely they can't do this?
A. Although the bonus scheme was described as discretionary, this does not mean that the Bank has absolute freedom to cancel it. The Bank must exercise its discretion in a way which is reasonable and rational. If, on your previous years performance, any other reasonable employer would have awarded you a bonus on your performance, then it would be very difficult for the bank to deny you this and you could bring a claim against them for breach of contract and possibly also for an unlawful deduction from your wages.
Q. I was later dismissed because I would not take on additional duties which I thought put too much pressure on me. Can they use this to justify cancelling the bonus?
A. You said above that the bonus was expressed to be assessed on your financial performance. If that is correct, then that is the only criterion which the Bank are entitled to take into account when deciding the bonus question. The Bank may have had grounds to get out of paying it if they had used a wider assessment criteria (one which, for example) also, took into account general performance at work and willingness to take on new duties etc). However, here it appears that they concentrated upon financial targets alone and as you hit those targets you are entitled to be paid the bonus.
Should you have a queries regarding a legal matter please contact Keith Swan of Patterson, Glenton & Stracey Solicitors by email at ks@pgslaw.co.uk or by telephone on 0808 231 7043. Patterson, Glenton & Stracey have provided legal advice to the people of South Tyneside for over 125 years. For details of their full range of services and to view previous Gazette articles please log on to www.pgslaw.co.uk.
