Worker

Employer

Anonymised Parties

A Warehouse Manager

A protective clothing company

Representatives

SIPTU

Ibec

Act

Dispute Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under section 13 of the Industrial Relations Act, 1969

IR - SC - 00003816

14/02/2025

The complainant is an employee of the Respondent company and received €800 instead of his normal €1,000 bonus.  The respondent contends that bonus is resulting from a collective agreement and subject to the profitability of the company.

The employee is employed as Warehouse Manager and has been in the employment from 1986.

Though it has never been formalised in writing, an annual bonus payment to staff has been in effect in the employment from at least 2015, payable in the following calendar year. Though the employee’s annual bonus rate was over €1,000 in earlier periods it was reduced to €1,000, by agreement, some years ago and no agreement was ever reached for it to fall below that. In 2022 the annual bonus payment to him was €1,000, the rate at which it had stayed for some years.

In April 2024 the employee received notification that the bonus for 2023 would be €800. He questioned this and, by mid-October 2024 the Respondent was still confirming their intention to apply the €200 reduction.

The employee alleges that an annual bonus was not paid to him in full given that there was a reduction in his bonus from €1,000 to €800 for the 2023 working year.  The Respondent disputes that he is entitled to the €200.  The employee’s Contract of Employment is silent in regard to any entitlement to an annual bonus.

The Respondent operates within a Unionised environment and negotiates pay for employees on an annual basis. The claim herein relates to the 2023 pay period where agreement was reached with the Claimants Union for this period. The said Agreement provides as follows;

As per previous agreement, a voucher, to the maximum value of €500, will be paid if sales targets for 2022 and 2023 are reached — payable in March 2023 for 2022 and March 2024 for 2023.

I have taken into account all relevant submissions presented to me by the parties.

The company is arguing that the above referenced collective agreement applied to the employee.  It is clear from the wording that he was treated somewhat differently although the extent of any such difference is not identified either in his contract or in any separate agreement covering him.  This is perhaps at the heart of the matter at issue.

There is no disputing that the payment relates to a bonus.  For a bonus to have any meaning there must be criteria to determine whether it is be paid (either in full or in part).  Bonuses are generally paid in an effort to motivate staff and as such it is a crucial principle that it is within the worker’s capability to earn the bonus.  The criteria should be identified to include this principle.  It is clear that the worker in this case believed that his general contribution to the efficient running of the company, including opening up the premises, entitled him to automatically be paid the same bonus each year regardless of the overall profitability of the company, which was the criteria generally applied to other staff.  It is unfortunate that an initiative intended to motivate staff has had the opposite effect in this instance.  For that reason I recommend that the company, in discussion with the union, identify appropriate criteria which will be used going forward to determine the rationale to be used in determining the extent of any bonus paid to the employee.

The amount of money at issue here is not very much and I recommend also that the company pay the employee the sum of €100 in settlement of the matter.

Part payment of bonus