ADJUDICATION OFFICER DECISION
Adjudication Reference: ADJ-00026515
Facilities Services Company
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
Date of Adjudication Hearing: 05/08/2020
Workplace Relations Commission Adjudication Officer: Eugene Hanly
In accordance with Section 41 of the Workplace Relations Act, 2015 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 as a Manager from 13th July 2017 to 13th or 19th December 2019. He was paid €3,208.33 gross and €2,717.88 net per month. He has claimed that the Respondent has made an illegal deduction from his wages by not paying him the bonus for 2019.
The Respondent has rejected this claim.
Summary of Complainant’s Case:
The Complainant stated that his salary in total encompassed a basic salary and performance incentive plan (PIP) bonus. This was subject to the achievement of personal and company targets. The bonus was based on the calendar year and payable in Quarter 3 of the following year. In 2019 his salary was increased and his bonus potential also. He had completed all the targets for 2019. His departure date reflected his holiday entitlement, but he worked a full calendar year in 2019. When he resigned his position the end of December he should have received his bonus. No reference was made to the payment of the bonus. It was not until he took part in a Workplace Relations Commission (WRC) mediation that he was informed that he would not be getting a bonus after he lodged his claim on 14th January 2020. In 2018 he received a bonus despite the company not achieving all of its targets
He was concerned that all other staff would receive the bonus, but he wouldn’t as he would not be in employment in Quarter 3 of 2020. He was made aware just before this hearing that no bonus would be paid to any staff in the company. He has argued that the company should have notified him much earlier, they failed to produce any financials to support their position that the bonus could not be afforded. He has claimed a total of €3,325.
Summary of Respondent’s Case:
The sole reason why the Complainant was not in receipt of a Performance Incentive Plan Payment for 2019 fiscal year is the Plan was contingent on both the Complainant’s performance and the Company’s overall performance. However, in 2019 the Company’s performance was not as hoped and no employee was paid any bonus under the Plan.
They raised a preliminary point that the Complainant had claimed on the claim form that he did not receive payment in lieu of notice. The Complainant gave notice on the first week of November and his final day at work was 13th December, so he worked his notice. So, there is no case to answer.
Regarding the claim for the bonus payment, on 18th June 2019 the Complainant received written details on the bonus payment and what was required by the Company to meet KPIs. The letter also outlined that if the minimum was not met, no bonus would be paid to any employee. The Company encountered financial difficulties in the second half of the year. The Complainant resigned his position in November 2019 and sought clarification in relation to the payment of the bonus. The Company responded that the bonus would be based on the company’s performance for a 12-month period and this would not be available until the 2019 accounts were finalised and that he would be contacted then. He received a letter from the Chief Executive on 10th January advising that despite everyone’s best efforts a significant loss was incurred and therefore no bonus would be paid for the financial year 2019. The Complainant submitted a claim to the Workplace Relations Commission on 14th January 2020.
Therefore, this bonus was not “properly payable” to the Complainant. His contract of employment states “will be subject to both Company and individual performance and achievement of agreed KPIs”. No employee received a bonus in 2019. Therefore, the Complainant has no basis for this claim and this claim is not well founded.
Findings and Conclusions:
Preliminary point: - minimum notice
I note that the Complainant referred to non-payment of minimum notice on the claim form but in the dialogue box of the claim form he particularised a claim for the non-payment of the bonus only. He made no reference and no claim for minimum notice.
Decision on preliminary point
I find that this claim only concerns the non-payment of the bonus in respect of 2019.
I note the Complainant’s contract of employment and in particular the provision for a bonus payment stated, “will be subject to both Company and individual performance and achievement of agreed KPIs”.
I note that when the Complainant resigned his position he enquired about his bonus and he was advised that it would be addressed when the results of the fiscal year were finalised.
I note that the Respondent stated and supplied a letter sent to employees from the Chief Executive advising that no bonus would be payable in 2019 as a result of significant losses occurred.
I note that the Complainant stated that he was not told that he would not be getting a bonus until he took part in mediation under the auspices of the WRC, he also advised that he was not informed until days before this hearing that no bonus was paid to any employee in respect of 2019.
I find that if this was the case then the Complainant submitted a complaint to the WRC before he knew that there was an alleged infraction.
I find that in order to succeed with a claim under the Payment of Wages Act the Complainant must have a contractual entitlement to the monies claimed.
I find that his contract of employment clearly stated, “will be subject to both Company and individual performance and achievement of agreed KPIs”.
I note that the Respondent advised that the Company did not achieve its own objectives for 2019 and so no bonus was paid in respect of 2019 to any employee.
I find that I accept the Company’s statement regarding its financial standing and it does not require an examination of its financial returns in this forum that justified its decision not to pay the bonus in 2019.
Therefore, I find that according to the Complainant’s contract of employment he does not have a contractual entitlement to the monies claimed.
I also find that the Complainant’s concerns in his claim form that all other employees would receive a bonus except him because he was not still in employment in Quarter 3 is unfounded.
I find that the Company choose to exercise its discretion with regard to the 2018 bonus but were not in a position to do so in respect of 2019.
I find that the claim is not well founded.
Section 41 of the Workplace Relations Act 2015 requires that I make a decision in relation to the complaint in accordance with the relevant redress provisions under Schedule 6 of that Act.
For the above stated reasons, I have decided that the Respondent Company did not breach Sec 5 of the Payment of Wages Act and that this complaint is not well founded and so it fails.
Workplace Relations Commission Adjudication Officer: Eugene Hanly
Alleged non-payment of annual bonus