Miss V. Olatunji v LEXefiscal LLP — 2022

Miss V. Olatunji worked for LEXefiscal LLP as an office administrator from 24 May 2021 to 11 November 2021 under a contract providing for basic salary of £26,000 and a gross bonus of £4,000 subject to mutually agreed targets. An unfair dismissal claim had already been struck out on 29 April 2021 because she did not have sufficient qualifying service.

At the hearing, the claimant withdrew the holiday pay claim after accepting that the respondent had already paid £950 in lieu of 9.5 accrued but untaken days of leave. The tribunal rejected the wrongful dismissal aspect of the breach of contract claim because the contract permitted termination on one month’s notice or payment in lieu, which the respondent provided.

The tribunal found that the respondent was nevertheless in breach of contract because the notice pay was not paid when due on 1 December 2021 and was only paid later. No damages were awarded for that breach, however, because the claimant did not prove financial loss attributable to the delay; the payments identified from her bank account were treated as pre-existing liabilities or voluntary payments rather than loss caused by the late payment.

The unlawful deduction from wages claim, based on non-payment of the £4,000 bonus, failed. The tribunal accepted that a bonus can be wages and that the contract created a legal entitlement in principle, but it found that the bonus depended on mutually agreed targets, no targets were discussed or set, and therefore no entitlement to the bonus arose during the employment.