Richard Howes v Direct Commercial Limited — 2023

The claimant, Richard Howes, resigned on 10 January 2022 and was later offered a conditional £2,000 performance bonus by letter dated 26 January 2022. The letter set three agreed targets about progress on the DEFnS project and handover, and said the bonus would be assessed on the final day of employment. The tribunal allowed an amendment to add the s.1 Employment Rights Act 1996 particulars issue, but declined the separate ACAS Code amendment.

On construction of the bonus letter, the tribunal held that the obligation was entire and indivisible, so all three conditions had to be met. It accepted that the claimant had made some progress on the project before his employment ended, had identified a script issue and sought external assistance from RDT, and had carried out handover work through meetings, emails, and written handover documents. The tribunal gave limited weight to later criticism from the replacement employee and later correspondence, because those matters arose after the assessment date and were not a proper basis for deciding whether the bonus conditions were met.

The tribunal found that the claimant satisfied Conditions 1, 2 and 3 and that the respondent had not exercised its discretion reasonably when it refused payment by relying on later events and on broad assertions that the handover was insufficient. It therefore held that the respondent was in breach of contract and ordered payment of the conditional bonus of £2,000. On the updated particulars issue, the tribunal found that the one-hour earlier start on a Monday did not change the overall hours of work, was not shown to be a permanent change, and the existing contract already allowed flexibility for business needs, so the claim under s.1 ERA 1996 failed.