Mr D Thorpe v Apex Evolution Limited — 2023

Mr D Thorpe brought claims for unlawful deduction from wages and breach of contract concerning unpaid bonus payments he said totalled #15,000. The respondent, Apex Evolution Limited, relied on a contract term stating that any incentive scheme was discretionary and not contractual, and that payment would only be due if the employee was still in employment when any bonus became payable. At the hearing, the claimant accepted that term formed part of his contract and that it meant bonus payment was entirely within the respondent's discretion.

The Tribunal found that the claimant discussed bonus arrangements with managers and was told a bonus scheme would be set up, but no scheme rules were in place before he left on 11 November 2022. The respondent had nevertheless paid bonus sums of #1,140, #1,099.44, #4,242.80 and #2,014. The Tribunal accepted the respondent's evidence that the total profit generated by the projects was #167,220.53, and that 1.5% and 3% of that figure were #2,508.31 and #5,016.62 respectively.

On the unlawful deduction claim, the Tribunal applied section 13 ERA 1996, the definition of wages in section 27 ERA, and the authorities of New Century Cleaning Co Ltd v Church and Farrell Matthews and Weir v Hansen. It held that the claimant had no legal entitlement to the bonus sums he claimed, and that a non-contractual bonus only falls within wages once paid. On the breach of contract claim, the Tribunal referred to Baird Textile Holdings Ltd v Marks & Spencer Plc and held that, even taking the claimant's case at its highest and assuming a collateral contract to set up a bonus scheme at 1.5% to 3% of profits, any damages would be less than the discretionary bonuses already paid. The claim was therefore dismissed in full.