Can employer change bonus guaranteed in contract to target driven instead?

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shona123

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Hi all :)

I hope someone can tell me if I’m right or wrong. Im with my current employer almost three years. In my contract it states

“€*** per annum paid monthly in arrears by credit transfer, plus a quarterly bonus of €***.

This has always been guaranteed.

I have been told this year it will be based upon a target i must reach. I had said this was meant to be guaranteed and when I took on the role I was factoring this bonus into my salary so I can’t afford to lose it.

I raised this with my manager who said this is just the way it is and his bonus was also changed.

Am I wrong to think this shouldn’t be allowed?

I like my job and don’t want to leave but can’t afford to lose the bonus either.

Thank you for any info!! The thought of having to start over in a new job is stressing me out!
 
It was unwise of them to insert a clause that the bonus would be paid unconditionally.

However, they did so and what they’re now proposing constitutes a change to your contracted terms and conditions which can’t be amended without your consent. Don’t sign anything agreeing to the change.

If the company enforces the change without your consent they’re in breach of employment law.

The best approach would be to quietly point this out and have them drop it but you would definitely have grounds for taking it further should they refuse.
 
Bonuses would usually be just that, a bonus, tied to personal and company performance. You're well within your rights to force payment if your contract didn't qualify this.

But beware of winning the battle and losing the war. Are there any benefits or flexibility you get which are not in your contract? Can you choose when to take your annual leave entitlement? Do you get annual salary increases? Is the bonus significant enough to potentially be worth a few years with no increase?
 
You could send them an email stating that stopping your bonus would be in violation of Section 5 of the Payment of Wages Act 1991. State that any changes to your employment contract must be agreed by both yourself and your employer. State that you do not agree to the deduction from your wages.

This will demonstrate that you are aware of your employee rights and might persuade them to back off.

Bear on mind the advice from MugsGame before you do this.
 
Are there any other clauses in the contract that mention bonus?

If the company want to control wages cost, and if they can't unilaterally reduce bonus they are likely to just pause wage increases to do it.
 
An individual line taken out of a contract is never enough in itself and can always be taken out of context. Is there any other reference to bonus in the entire contract itself, (or remuneration) that would contradict, clarify or back up the line?. Also is there any line in the contract that states "subject to" or "in line with company policy" or words to that effect.
 
shona123 said:
“€*** per annum paid monthly in arrears by credit transfer, plus a quarterly bonus of €***.

This has always been guaranteed.
Click to expand...

How long have you been receiving this for?

If you have been receiving it for a few years then custom and practice would also support what looks like a pretty clear contractual entitlement.

Have you received salary increases since you started?

What is the bonus as a percentage of your salary?

If they agree to pay you the bonus of €1,000 a quarter, can they, in effect, claw it back through not increasing your salary?

But if it's 25% of your salary, then that would be different.

I would initially write a nice letter and not be quoting the law, at this stage.

"Dear Employer

I took the job on the understanding that the bonus was guaranteed and indeed it has been paid for the past 10 years so my understanding was correct. I always regarded it as integral to the basic pay structure.

It was critical to my decision to take the job. I could have got a higher basic elsewhere but with no bonus.

I am glad I did because I enjoy my job and working for the company.

I welcome the introduction of a target based bonus system, but before it will be introduced, it will be necessary to increase my basic pay by the amount of the guaranteed bonus. "
 
I'm in agreement with Burgess but there are too many I's. How about ............

Dear Employer

Having taken the job on the understanding that the bonus was guaranteed I always regarded it as integral to the basic pay structure, and indeed it has been paid for the past 10 years.

It was critical to my decision to take the job rather than a higher basic elsewhere with no bonus. It goes without saying working for the company in this job is enjoyable.

The introduction of a target based bonus system is welcome, but before it will be introduced, it will be necessary to increase my basic pay by the amount of the guaranteed bonus.
 
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Assuming everyone else is the same boat, it’s probably best if you can present a united approach rather than going off on a solo run that will ultimately benefit everyone anyway but might have you cast as troublesome.
 
I agree that a united approach is better.

But an employee who asserts their rights in a professional manner is often respected by their employer rather than seen as troublesome.

Brendan
 
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