Complainant

Respondent

Parties

Niall  O'Reilly

Cavan Box Limited

Representatives

Denis F McDwyer & Co, Solrs

 Peninsula Business Services Ireland

Act

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

CA-00075541-001

18/09/2025

The Complainant was employed as a Maintenance Manager and his terms of employment included a term relating to a bonus of 20,000 Euros. The Complainant was never paid any bonus and he alleged this was a breach of his contract and the Payment of Wages Act.

The Complainant commenced work in the Respondent company on 10th June 2024 as per the Statement of Terms executed on 19th April 2024. The due date was inserted as 1st June 2024 however the Complainant did not commence work until 10th June 2024.

As per the Statement of Main Terms (the "Contract"), under the heading “Benefits”, the term states “Your position has the benefit of a KPI Management Bonus Scheme of €20,000.00 details of which will be agreed on and be confirmed in writing after 3 months from start date. Operated on a 12-month window…”

This 12 month window has now expired, and the Complainant has not received any part of agreed bonus.

Despite this clause, no written details of the KPI scheme were ever provided to the Complainant after the stated 3-month period, and further the Complainant has never received the bonus of €20,000.00 bonus, or any part thereof, as provided for in the executed Contract.

The Respondent did agree to make a payment of €5,000.00 to the Complainant of part of the bonus in June 2025 however this payment did not and has not materialised and displays yet another failed promise from the Respondent.

In fact, the Complainant was not provided with a written copy of the KPIs within the 3-month period and despite the Complainant’s request for a copy of the written KPIs again on 2nd September 2025, same has not been forthcoming.

In excess of twelve months has now expired since the Complainant entered into the Contract and no bonus has been paid to him.

Due to family commitments, the Complainant did give one month’s notice in March 2025 and on the day he was due to leave the company, the Respondent asked him to stay. The Complainant and the Respondent discussed new terms, which were verbally agreed by the Respondent however when the Complainant sought confirmation in writing, they were not forthcoming and all promises were reneged on by the Respondent.

The Respondent mentions a discussion around this in his letter to the Complainant’s representative dated 15/09/25 where the Respondent denies any such conversation around new terms and states “…the terms of the contract were always discussed and understood”. Yet, our Complainant has still not received his bonus or any part thereof.

The Respondent had stated in open correspondence to the Complainant’s representative that a discussion took place with the Complainant in or around 16th September 2024 wherein KPIs were discussed and “an understanding reached that the KPIs were unlikely to be achievable in the period, due to CAPEX”. Nowhere in the Contract is CAPEX mentioned as being able to restrict the payment of the bonus scheme to the Complainant. Indeed, the Complainant instructs that in one of their many discussions, the Respondent admitted to the Complainant that he, the Complainant, had met all key performance indicators in order for his bonus to be paid however the bonus has still not been paid nor have the KPIs being forthcoming for 2024/2025.

The Complainant Representative maintained that who writes to contract must abide by its terms.

The Respondent made no written submission and their Representative set out the core of their case at the Hearing and the Owner gave evidence under affirmation which is outlined below. The Respondent Representative primarily alleged no breach of the Act took place as there was no written agreement to pay the bonus or regarding any KPI’s so therefore any bonus was not properly payable under the Act as a result.

The Respondent alleged that the bonus which is open to about 8 eligible employees is primarily based on the achievement of sales and as a minimum attaining 90% of sales target. It is only when this target is achieved that the individual bonus elements come into consideration.

The Respondent alleged the bonus is payable to staff based on a calendar year and not as outlined by the Complainant.

The evidence of Mr. Niall O Reilly (Complainant) was given under affirmation. He advised he signed a contract dated 19/4/24 following a second interview. He advised he was the Maintenance Manager responsible for plant and equipment and was offered a salary of 60k and a bonus of 20k. He advised the KPI’s never materialised and he was told that the company was happy with him in a number of meetings. He advised he had elderly parents to look after close to the job and this required some flexibility in what hours he worked. He advised he never received any complaints about his work. He advised there was never an issue with his work, hours  or attendance and he was paid on salary basis. He advised he requested multiple meetings with Mr. Lovett (General Manager) regarding the bonus but that Mr. Lovett had a culture of leaving the plant and not making himself available. He advised he requested working for 3 days instead of 5 days in late March 2025. He advised he was told at the two interviews that the 20k bonus would be paid in full. He advised that the Respondent never paid any of the bonus and offered to pay 25%. He advised he was willing to sit down and discuss KPI’s but that it never happened. He advised he had no experience of how to create KPI’s and that it was the responsibility of the employer to initiate it. He advised he considered leaving in March 2025 due to another member of staff issue that was not resolved. He advised he had a discussion with Mr. Lovett and agreed not to resign. He advised they discussed the bonus and 10% was agreed but it never materialised. He was paid at his normal salary for April/May and June and when he enquired with payroll about the change they advised they knew nothing about it. He went through his experience prior to joining the Respondent and he advised CAPEX was never discussed with him in any context. He advised the first he heard about the company not having the ability to pay his bonus was in their letter of 15/9/2025 after he left. He advised he raised the issue of the bonus a number of times while employed and was assured it would be paid 100%. He advised the job was originally advertised as 80K and he was dismayed when the original offer of 60K basic was made and was assured the 20K bonus would be paid to him.

The Complainant was cross examined by the Respondent Representative. It was put to the Complainant that any bonus was payable after 12 months and that he went out sick on July 18th 2025.The Complainant stated he was told the bonus would be paid in full. The Complainant was asked were the KPI’s ever put in writing and he replied that that it was not up to him to set the KPI’s and they were never put in writing. He advised he left an 80K employment for the job and it should not be up to him to put the KPI,s into writing.  He was asked was there anything on record regarding the KPI’s and he advised not to his knowledge.

The Respondent Representative put it to Mr. Lovett, General Manager (under affirmation) that the contract required the KPI,s to be agreed and once there is no agreement then it is not properly payable. Mr. Lovett agreed with this. Mr. Lovett expanded his answer to say the KPI,s could not be met due to capital expenditure that would be required which the company did not have at the time. Mr Lovett was asked to explain the bonus system and he advised it ran for the calendar year, Jan to Dec. He advised it was linked to the company accounts, each persons own speciality, sales and output. He advised he meets with the eligible individuals and discusses plans and goals with them. He advised there were ongoing conversations but nothing was ever agreed. He advised there was a 5 year CAPEX plan and that he had individual discussions in the first months with the Complainant about his role and a maintenance plan. He advised he had a discussion with the Complainant that he was not meeting his KPI,s. He advised they had a meeting arranged but when he went looking for the Complainant he was not at work but had not clocked out. He advised achieving 90% of the sales targets were key to paying any bonus. He denied that the bonus was guaranteed. He agreed he offered to pay 5k bonus around July and it would be paid from reserves if performance was not up to scratch.

Mr. Lovett was cross examined by the Complainant Representative and asked how would people realise the KPI’s were not going to be reached and Mr. Lovett replied that he published the sales targets and actuals achieved daily. He advised he circulated information by email and maintenance was discussed at management meetings.  It was put to Mr. Lovett he never had any discussion with the Complainant about KPI’s and he replied he offered the 5k in part payment and they agreed they would try settle the matter afterwards. He denied avoiding the Complainant. He advised the benefit section of the contract was four and a half lines long and was written in conjunction with Advisors. He was asked why the contract did not say the bonus was based on a calendar year as he claimed when it says it’s a 12 month window in the contract. It was put to Mr. Lovett that the company drafted the contact not the Complainant and they had to live with its contents. He was asked to confirm that he never replied to the Complainants solicitor request in September 2025 for a copy of the KPI’s and the Complainants contract. He advised there was no written overarching bonus policy.

In conclusion, the Respondent Representative stated that the bonus was not guaranteed and did not state that the KPI’s had to be written down and therefore it was not properly payable under the Act. The Complainant Representative stated that the Respondent at all times made out the bonus to be a guaranteed sum and by not paying it the Respondent was in breach of the Payment of Wages Act.

Findings

Payment of bonus is incorporated into the definition of wages in Section 1 of the Payment of Wages Act, 1991

"wages", in relation to an employee, means any sums payable to the employee by the employer in connection with his employment, including—

(a) any fee, bonus or commission, or any holiday, sick or maternity pay, or any other emolument, referable to his employment, whether payable under his contract of employment or otherwise, and

(b) any sum payable to the employee upon the termination by the employer of his contract of employment without his having given to the employee the appropriate prior notice of the termination, being a sum paid in lieu of the giving of such notice:”

Section 5(1) of the Act provides:

“(1) An employer shall not make a deduction from the wages of an employee (or receive any payment from an employee) unless— (a) the deduction (or payment) is required or authorised to be made by virtue of any statute or any instrument made under statute,

(b) the deduction (or payment) is required or authorised to be made by virtue of a term of the employee’s contract of employment included in the contract before, and in force at the time of, the deduction or payment, or

(c) in the case of a deduction, the employee has given his prior consent in writing to it.”

Section 5(6) of the Act provides: —

“(a) the total amount of any wages that are paid on any occasion by an employer to an employee is less than the total amount of wages that is properly payable by him to the employee on that occasion (after making any deductions therefrom that fall to be made and are in accordance with this Act), or

(b) none of the wages that are properly payable to an employee by an employer on any occasion (after making any such deductions as aforesaid) are paid to the employee,

then, except in so far as the deficiency or non-payment is attributable to an error of computation, the amount of the deficiency or non-payment shall be treated as a deduction made by the employer from the wages of the employee on the occasion.”

Issues concerning a bonus are always open to interpretation in that by their nature they are generally not guaranteed, and performance against objectives can be subjective.  In this case there is a more fundamental starting point in that a clause of the contract relating to how the Complainant could earn any bonus (wages) was not implemented and the issue of whether this is a fundamental breach of contract thus denying the Complainant the opportunity to earn any bonus has to be considered.  

The contract states the following regarding bonus; “Your position has the benefit of a KPI Management Bonus Scheme of €20,000.00 details of which will be agreed on and be confirmed in writing after 3 months from start date operated on a 12-month window”.  One assessment of this clause is that the bonus will commence after 3 months of employment and govern the next 12 months and no mention of it being based on a calendar year can be construed from the clause. It states that Key Performance Indicators (KPI’S) “will be agreed and to be confirmed in writing”. The contract does not state who will initiate the KPI agreement process. The Respondent was asked by the Adjudicator did they have a written general policy covering the KPI bonus scheme and they do not. In that context it is reasonable to conclude that the Respondent should have initiated the process and not expect a new Employee to initiate the way the bonus/KPI scheme would work. I deem this to be a breach of the employment contract by the Respondent that they failed to initiate and finalise this element of the contract and thus deprive the Complainant of a legal opportunity to earn what would be a large percent of his basic pay,  33 1/3 %.  

The Respondent Representative maintained that because the KPIs were not agreed and that they were not put into writing that no liability could exist under the Payment of Wages for any bonus and it was therefore not properly payable under the Act. While this argument was innovative I do not see any validity in it, as to agree to it would undermine the total intent of the clause relating to the terms regarding a bonus, and as outlined above, I deem the failure to set out the KPIs as being the primary responsibility of the .Respondent and the Complainant cannot be disadvantaged to have a bonus opportunity by an omission of the Respondent.

The issues for decision in relation to the Complainant’s complaint is whether or not the Respondent made unlawful deductions from his wages contrary to Section 5 of the Payment of Wages Act 1991 in relation to bonus payments which he claims were due to him during the cognisable period (six months before the submission of the complaint). In considering this issue, I must first decide whether the claimed unlawful deduction was in fact “properly payable” to the Complainant within the meaning of Section 5(6) of the Act. To ground a claim under the Payment of Wages Act 1991 an Adjudicator needs in the first instance to ascertain what wages are properly payable during the relevant period. Having established that the Adjudicator then needs to ascertain whether there was a shortfall in the proper payment and, if that was the case, whether the shortfall arose for one of the reasons set out in section 5(1) above. The final issue then, following on from conclusions to the first two issues, is what can reasonably be estimated/calculated, in the circumstances of this case, as the unlawful deduction and what, if any, is the appropriate redress.  

The Act at Section 5 prohibits an employer from making a deduction from wages that are properly payable to an employee unless the deduction (a) is required or authorised to be made by virtue of any statute, (b) is required or authorised to be made by virtue of a term of the employee's contract of employment or (c) the employee has given his prior consent in writing to it.

As the shortfall in the wages identified during the cognisable period for the within complaints was not (i) required or authorised by statute, (ii) the result of a clear contractual term in the Complainant’s employment, or (iii) made by virtue of agreement in writing where the Complainant consented to deductions, the Respondent cannot rely on Section 5(1) of the Act to say that the deductions made from the Complainant’s salary were lawful. 

The Adjudicator determines that an unlawful deduction from the Complainants wages occurred due to a breach of contract and it occurred when the Complainants employment ceased and I find  the complaint is well founded. Redress 

The Act as section 6 states provides that the Adjudicator can direct an employer to pay to the employee compensation of such amount (if any) as it considers reasonable in the circumstances not exceeding—

“(a) the net amount of the wages, or tip or gratuity as the case may be (after the making of any lawful deduction therefrom) that—

(i) in case the complaint related to a deduction, would have been paid to the employee in respect of the week immediately preceding the date of the deduction if the deduction had not been made, or

(ii) in case the complaint related to a payment, were paid to the employee in respect of the week immediately preceding the date of payment,

or

(b) if the amount of the deduction or payment is greater than the amount referred to in paragraph (a), twice the former amount.”

In this case, the Complainant suffered a deduction in wages of one payment that fell within the cognisable period for the within complaint.

During the Hearing the Complainant maintained he had performed well and was told by his line management he was doing a good job.  The Respondent advised that any bonus payable would have to be paid from reserves due to the financial situation of the company. The fact that the Respondent offered 5k in part payment and persuaded the Complainant to withdraw his resignation meant they did not argue they were unhappy with his general performance, which they did not do.

Having considered all the respective positions of the parties I conclude that the opportunity to earn a bonus was a fundamental and large part of the employment contract and the responsibility for not agreeing and documenting the KPIs rested with the Respondent and that the eligible period for consideration of a bonus would have been from September 19th 2024 to the date of the Complainants last effective working day, June 6th  2025, a period of approximately 8 and a half months. On this basis I deem the amount of bonus opportunity to be, proportionally, 14,166 Euros. On the basis that there were no stated performance issues, that the Respondent was keen to maintain the Complainant in their employment, that its rare an Employee meets all KPI,s  and a bonus is a matter of analysis of performance against goals (it is not a matter for the Adjudicator to assess the Complainants performance) and that the Complainant had the contractual right to have the opportunity for the bonus to be properly payable to him but that right was breached by the Respondent, I find given all these factors that an amount of 10,000 Euros Compensation to be the amount properly payable to the Complainant.

I find the Complaint well founded and award the Complainant 10,000 Euros Compensation for breach of his employment rights.

Payment of Bonus