Bonus Payments Solicitors

Bonuses often form a key part of an employee’s remuneration package, so any issues with the payment of your bonus can significantly impact your earnings, as well as leaving you confused, frustrated and demotivated. Knowing how to challenge underpayment or non-payment of a bonus the right way can help to get the financial reward you deserve for your hard work, so taking expert legal advice as soon as possible is strongly recommended.

IBB Law’s employment law team regularly advise and represent employees in bonus disputes, using our many years of experience and dispute resolution expertise to help you find a positive solution, quickly and cost-effectively.

We are highly skilled in dispute resolution, including negotiation, workplace mediation and Acas early conciliation proceedings, so we will do our best to secure a good outcome for you without the need for formal proceedings.

However, our litigation team has a very strong track record of success with employment tribunal and civil claims, so if formal proceedings are required, we can guide you through every stage of the process, giving you the best chance of achieving the result you need.

Our employment lawyers can also advise you on your bonus scheme when you are signing an employment contract, or if you are considering leaving your current employer and have concerns about how this may affect your bonus.

For advice on bonus payments, including bonus disputes, please contact our experienced employment solicitors at our local offices in Chesham, Reading and Uxbridge, or you can email employmentlaw4 you@ibblaw.co.uk.

How to claim for non-payment of a bonus

If your employer has failed to pay a bonus that you believe you were entitled to under the terms of your employment contract, we can advise on you on your legal options.

In the first instance, it is normally a good idea to discuss this with your employer to find out the reasons for non-payment or underpayment of your bonus. If you cannot agree a way to resolve the matter with your employer, you should ask them for a written explanation of why the bonus you were expecting has not been paid. This can then form the basis of any further action you decide to take to resolve the matter.

In many cases, it may be possible to make a claim to an employment tribunal for unlawful deduction from wages and if you are no longer employed for breach of contract. It is also possible to bring a claim in the civil courts for breach of contract while still employed. Whether you have grounds for such a claim will depend on many factors, including the terms of your contract of employment and your employer’s reasons for non-payment of your bonus.

If you have left your job because of your employer failing to pay a bonus to which you believe you were entitled, you may also have grounds for a claim of constructive dismissal. We always recommend speaking to an experienced employment lawyer before resigning as a result of such disputes, to ensure you do not unintentionally undermine your right to claim.

However, such matters can in some instances be resolved through negotiation, workplace mediation or Acas early conciliation, allowing you to receive the bonus you are entitled to without the need for formal proceedings in the employment tribunal or civil courts.  If a solution is reached in this way, it will be quicker, and the legal costs will be lower. It also lets you keep the matter private and avoids the stress and uncertainty of tribunal proceedings where the outcome will be out of your hands.

Types of bonus payments we can advise on

Contractual bonuses

This is where your right to a bonus is written into the terms of your employment contract, usually with a specific formula for calculating the value of your bonus, based on set criteria. Contractual bonuses are often linked to your individual performance (e.g. sales targets achieved) or the performance of the company.

Contractual bonuses create the most straightforward situation for you. They offer a transparent way of determining your bonus entitlements and place a contractual obligation on your employer to pay your bonus according to the terms agreed.

If your employer does not pay your bonus in line with the terms of your contact, you are likely to have a clear case to bring a claim in the employment tribunal or civil courts.  If as a result of not being paid, you find that you can no longer remain employed and decide to resign, you may have a claim for constructive dismissal against your employer.

Discretionary bonuses

It is common practice for employers to pay bonuses on a discretionary basis. This means that, although there may be a formula for how bonuses are calculated based on criteria, such as individual sales performance, it is up to the employer to decide whether to pay a bonus and what level to set the bonus at.

However, where your right to a bonus is at the discretion of your employer, your employer has a duty to exercise that discretion in good faith, with the decision based on reasonable grounds.

If you believe your employer has not acted in good faith and/or lacks reasonable grounds for refusing to pay a discretionary bonus to which you believe you are entitled, you may have a claim.

Long Term Incentive Plans

Long term incentive plans can be used by employers to give employees stocks or shares in a business when certain conditions have been met e.g. completing a set period of employment or achieving agreed performance goals. This is usually dealt with through restricted stock units (RSUs).

RSUs are a way an employer can grant company shares to employees. The grant is ‘restricted’ because it is subject to a vesting schedule, which can be based on length of employment or on performance goals, and because it is governed by other limits on transfers or sales that the company can impose.

Unlike stock options, RSUs always have some value to you, even when the stock price drops below the price on the grant date.

On the termination of your employment, RSUs stop vesting. The only exception occurs in certain situations when vesting may be allowed to continue or may even be accelerated (e.g. death, disability, retirement and depending on your plan and grant agreement).

Failure by an employer to issue stocks or shares as agreed under the terms of a long-term incentive plan can be grounds for a claim. Therefore, it is important to take legal advice as soon as possible if you believe you have been denied your entitlement under such a scheme.

Maternity equality clauses

Where you have a contractual entitlement to a bonus, you have the right to be paid a bonus for any year in which you have taken statutory maternity leave. However, your employer will only be required to pay a bonus for the part of the relevant year where you were:

  • at work (before and/or after your statutory maternity leave)
  • on the standard 2 weeks of compulsory maternity leave

Where your bonus scheme is discretionary, your employer must act in good faith with regards to deciding your entitlement to any bonus for a bonus period where you were on maternity leave.

Common questions about bonus disputes

Can your employer change your bonus scheme?

If your bonus scheme forms part of your contact of employment, your employer will need your permission before making changes to the scheme. Should your employer attempt to change the terms of the scheme without your agreement, this could be grounds for a claim of constructive dismissal if you feel you can no longer remain in your job as a result.

Can your employer withhold your bonus if they dismiss you?

This will depend on the circumstances. If the bonus scheme is contractual and you are dismissed for gross misconduct, your employer may be under no obligation to pay you any outstanding bonus. This is because you will be seen to be in breach of your contract of employment.  This may not be the case if you are dismissed with notice e.g. due to redundancy.

However, if you believe your dismissal was unfair, any bonus payments you have been denied could form part of a potential claim for loss of earnings as part of an unfair dismissal employment tribunal claim. Our employment lawyers will be happy to advise you on this complex matter, to help ensure your claim is handled effectively.

Can your employer withhold your bonus if you resign?

This will depend on the terms of your contract. If the contract states that you must be employed on the agreed bonus payment date, resigning before this date could mean that you lose your entitlement to your bonus for the relevant period. You should therefore give careful consideration before choosing when to end your employment and always take legal advice on the terms of your contract first.

Our expertise with bonus payment disputes

With decades of experience advising and representing employees across a range of sectors, including the banking and finance industry, our employment lawyers have achieved favourable outcomes for clients dealing with all types of bonus disputes.

IBB Law is one of the South East’s top ranked legal firms for employment law, having secured Tier 1 ranking in the highly respected Legal 500 client guide. Marc Jones from our employment team has been individually recognised by the Legal 500 as a leading individual in the field of employment law.

Having specialised in employment law for more than 20 years, Marc advises and represents employees of all levels in bonus disputes involving large multinationals, small to medium-sized enterprises, public sector bodies and charities.

Contact our bonus payments solicitors

IBB Law’s employment law specialists represent individuals at all levels no matter the size or sector of the company.

If you would like to advice on challenging non-payment of a bonus or any other issues related to bonuses, please contact our experienced employment solicitors at our offices in Chesham, Maidenhead, Reading and Uxbridge, or you can email employmentlaw4you@ibblaw.co.uk.

The material contained in this web page is provided for general purposes only and does not constitute legal or other professional advice. Appropriate legal advice should be sought for specific circumstances and before action is taken.


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