ADJUDICATION OFFICER DECISION
Adjudication Decision Reference: ADJ-00003207
Complaint for Resolution:
Complaint/Dispute Reference No.
Date of Receipt
Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991
In accordance with Section 41(4) of the Workplace Relations Act, and following the referral of the complaint to me by the Director General, I inquired into the complaint and gave the parties an opportunity to be heard by me and to present to me any evidence relevant to the complaint.
The Complainant was employed from 4th November 2013 until the employment terminated on 25th March 2016. The Complainant was paid €74,000.00 per annum and he was provided with a written statement of his Terms and Conditions of Employment.
The Complainant referred a complaint to the Workplace Relations Commission on 18th May 2016 alleging the Respondent had breached Section 5 of the Act in that he was not paid a Bonus of €13,750.00
Summary of Complainant’s Position.
The claim is in respect of quarterly bonus due and owing to him for the years 2015 and 2016 and they sought an extension of time.
The Complainant was paid a quarterly bonus of €1500 quarter 1 in 2015 - €1500 Quarter 2 in 2015 - €750 in Quarter 3 in 2015. He was not paid his bonus due in Quarter 4 in 2015 and Quarter 1 in 2016. He is claiming payment of €3,750.00 in Quarterly bonus.
He is also claiming payment of an annual bonus. He was paid €10,000 in 2014 and he is claiming payment of €10,000 in 2015 and €2500 for the first quarter of 2016.
This is provided for in his Contract of Employment but the Respondent is contending that this is at the absolute discretion of the Respondent and that the Complainant was warned of his “significant dip” in his performance which justified the halving of his bonus for Quarter 3 in 2015 to €750.00 and none thereafter. The Respondent did not bring issues of performance to the attention of the Complainant either formally or informally. This is provided for at Clause 10 of the Contract which does provide for formal reviews on a regular basis.
The Complainant asserted that the non-payment of the bonus had nothing to do with performance but had to do with a series of incidents when the Complainant travelled to the office in Pakistan in October 2015. At this time the HR Manager in Ireland resigned and emails are alleged to have been sent to the Complainant and another named employee which it is now accepted hey never received as the Complainant was travelling back from Pakistan on 10th October 2015. However on 12th October 2015 a second email was sent to the Complainant threatening he could lose his job unless he replied to the email of 10th October 2015 which he never received. This was confirmed by the IT Department of the Company. The Complainant responded to the email raising his concerns.
The Complainant stated that he gave constructive feedback on his official trip to Pakistan and he raised some concerns he had about operations between Ireland and Pakistan. There was an aggressive response from the named CEO.
He received a phone call from Pakistan on 15th October 2015 and requested he speak to a named individual who he was informed was the new Finance Manager. He had a skype discussion with the CEO on 4TH November 2015 in which he was informed the CEO had no confidence in him
The Complainant requested HR to put in writing to him the reasons why he did not receive his Q4 Bonus. He did not receive a response. However he is aware that the staff in Pakistan all received their Bonus as these were invoiced to Ireland.
In relation to his annual bonus the Complainant provided evidence from the CEO in relation to the payment of Annual Bonus in 2014 which the Complainant stated he had been informed was part of his remuneration package when he was recruited in 2013.
The Complainant referenced the decision of the High Court in Cleary v B & Q Ireland Ltd (2016) in support of their argument. They also referenced a number of other cases.
Summary of Respondent’s Position.
The Complainant commenced employment as Chief Financial Officer on 4th November 2013 until on 25th February 2016 he served one month’s notice of the termination of his employment. His employment terminated on 25th March 2016.
Clause 9 of the Contract of Employment sets out the conditions of the Performance Related Bonus. The Complainant received all his Quarterly Bonus until Q3 of 2015 where following discussions concerning his performance he received a reduced bonus for Q3 in 2015 and he was not paid a Bonus for Q4 in 2015. No employee received a Bonus in Q4 2015.
Due to a restructuring and development of the Company in Ireland and Pakistan the Complainant was given a once off bonus of €10,000.00 in 2014.
The Respondent argued the Complainant had no contractual entitlement to a bonus payment and it is not properly payable as defined by the 1991 Act. The Respondent properly exercised its discretion in relation to the reduction in the bonus for Q3 in 2015 and not to pay a bonus in Q4 2015. The Respondent stated that they had numerous discussions with the Complainant about a dip in his performance. The Complainant does not have an entitlement to the payment of what was a once off discretionary payment of£ 10,000 in 2014 for 2015. This is not a contravention of Section 5 of the Act.
The Respondent referenced a number of decisions of the Courts in support of their contention that they have not breached Section 5 of the Act
Preliminary Issue – Section 41 (6) of the Workplace Relations Act, 2015.
This section of the Act provides that an Adjudication Officer shall not entertain a complaint if the complaint has been presented to the Director General after the expiration of 6 months of the alleged contravention unless as provided for at Section 41 (8) an adjudication Officer is satisfied that the delay is due to a reasonable cause.
These complaints were lodged with the Director General on 18th May 2016. One of the complaints relates to the payment of a Bonus for Q3 of 2015, to be paid in October 2015. The Complainant sought an extension of time and stated that the issue had been the subject of internal discussion.
However I note that the only correspondence in relation to this was in April 2016.
Decision; I find that this does not meet the criteria of “reasonable cause” as set out by the Labour Court in a number of key decisions
Q4 Bonus 2015.
Section 9 of the Terms and Conditions of Employment between the Parties (but undated) provides as follows – The employee will be eligible to participate in the Company’s quarterly Performance Related Bonus Scheme and may earn €1500 per quarter, a total of €6000.00 per year. This bonus is directly related to individual and company performance and is at the absolute discretion of management each quarter……The Company reserves the right to vary, discontinue or withdraw the Performance related bonus scheme without notice or without compensation……the bonus payment will be made quarterly in arrears. The employee must be currently employed in the company at the time of the bonus payment
Section 10 of the Terms and Conditions provides as follows – The employee shall receive constructive feedback on an on-going basis from his/her Manager and formal reviews of performance will take place on a regular basis in line with Company policy……The employee should note that commission and performance-related bonus are not considered by the Company to be a holistic or complete view of performance…..
Section 9 of the Terms and Conditions are clear that the payment of the Quarterly Bonus is directly related to both individual and Company performance. The Respondent did not present any evidence to the Hearing in relation to any individual performance review undertaken by the Company in relation to the Complainant in connection with the payment of the Q4 2015 Bonus. Neither did the Respondent present any evidence to the Hearing in relation to Company Performance to justify the non-payment of the Q4 2015 Bonus to the Complainant.
Q1 Bonus 2016
Section 9 of the Terms and Conditions are very clear that the quarterly bonus, if payable, is paid in arrears and also provides that the employee must be employed in the Company at the time of the bonus payment. Both Parties confirmed at the Hearing that the Complainant terminated his employment on 25th March 2016, therefore he was not employed by the Company in April 2016 when any bonus would be paid.
Annual Bonus 2015
The Terms and Conditions of Employment are silent on the payment of an annual Bonus to the Complainant. Both Parties confirmed that the Complainant was paid an annual bonus of €10,000.00 in December 2014. There was a conflict of evidence in relation to the basis for the payment of this bonus.
The Respondent stated that at the end of 2014 the Company was in a large development stage of its offices in Dublin and Pakistan. The Complainant was left to manage the Dublin Office and the Respondent decided to give a once off bonus of €10,000.00. The Complainant was informed this was a once off payment. This was not put in writing to the Complainant.
The Complainant stated that he was interviewed and recruited by a named Financial Controller of the Company and he was to take over the Accounting function worldwide. Following discussions, including discussions with the named CEO and founder of the Company, it was agreed that his annual salary would be €74,000 and that he would be paid an annual bonus of €10,000.00. Again this is not in writing and does not form part of the Terms and Conditions of employment.
On the basis of the evidence and my findings above and in accordance with Section 41(5) of the Workplace Relations Act, 2015 I declare the complaint is well founded in part.
Q3 2015 Bonus. I declare I do not have jurisdiction to hear this complaint as it is statute barred by reference to Section 41(6) of the Act
Q4 2015 Bonus. I declare this complaint is well founded. I direct the Respondent to pay the Complainant his Q4 2015 Bonus of €1500.00, subject to any lawful deductions, within 42 days of the date of this Decision.
Q1 2016 Bonus. I declare this complaint is not well founded. The Terms and Conditions of his Employment provided an employee must be employed in the Company when the Quarterly payments are made. The evidence was that the Complainant was not an employee of the Company in April 2016 when the Q1 2016 Quarterly Bonus was due to be paid.
Annual Bonus 2015. I declare this complaint is well founded. The Complainant commenced his employment in November 2013. He was paid an annual bonus in December 2014. The Respondent stated this was related to Company developments while the Complainant stated this was an agreed annual bonus to be paid to him each year and was paid on his first year of employment. There was no evidence presented by the Respondent to support their contention whereas the payment of the Bonus in December 2014 would support the Complainant’s contention that this was agreed at the interview and recruitment stage in November 2013.
On this basis I direct the Respondent to pay the Complainant his annual bonus of €10,000.00, subject to any lawful deductions within 42 days of the date of this Decision.
Date:__30th January 2017_________________________