bonus payments with held

[Marbo]

On 2/8/10 pay period a colleagues bonus pay was due to be paid. This was earned from the Dec & Mar quarter 2010 FY & the date it was to be paid was noted in a meeting & notarised.
It will now not be paid until 30/8/10 & this colleague is concerned that as he is intending to resign before that date that he will not be paid this bonus. The contract mentions nothing about bonus payments & new contracts are about to be received.
I have no precendent to this so your feed back would be appreciated.

[Moz]

Originally Posted by Marbo

The contract mentions nothing about bonus payments ....

So how did the bonus payments come about?
and how long have bonuses been paid?
Does your colleague have a copy of the notes from the meeting that say when the bonuses will be paid?

Just because someone resigns does not mean an employer can simply forget about bonus payments that are due. However if the bonus payments are not formalised and/or awarded at the discretion of the employer, I can understand why your colleague might be worried. He may need to consider delaying his resignation until the bonus has been paid.

What about bonuses earned since March?

[Pious]

It really also depends on whether the bonus has been "earned". I appreciate you say there is nothing in the contract about it, but usually you will see situations where, as examples :
1.an employer starts a bonus scheme as an incentive - if certain future targets are achieved then X% will be paid as a bonus (this seems implicit from your situation). It has become part of the employment contract, even though it isnt in writing. In that case, assuming that the employee was on that scheme and achieved the targets, I'd think most likely the bonus will be payable regardless.
2. the employer calls a meeting at the end of March and says "you've all worked hard, we've acheived great sales, I'm going to give you a bonus of $x on 1 August". In that case I dont think that it is likely that the employee can force the bonus payment. It wasnt a term of his employment, really it was an incentive to remain employed which would (I think) be lost on resignation. There would be an exception to this to the extent that the employee committed himself to expenditure based on the promise that the money would be paid by 2 August based on estoppel, but it is tricky, depends on what was said and done, and would need a lawyer to look at it.

[Marbo]

As you have indicated this was a reward system for sales goal acheivements. when it was announced formally (meeting & powerpoint documented) the team had "already achieved" the December quarter bonus (to great applause...) then the team were told they had acheived the March quarter bonus also. We are still to have the March bonus notarised formally.

The resignation date has been delayed once & he feels that to do it again may jeopardise the new position.

Yes I feel legal advice is the go now.
thanks for your feedback.

[FWI]

Common law matter. The Fair Work Act expressly excludes bonus and incentive payments from the basic periodic rate of pay, therefore, unless it forms part of a collective agreement or other instrument such as an ITEA or old AWA, there is no legal obligation on the employer to make such payment.