KEY POINTS:
Our company recently sold itself and as part of this process bonuses were offered to staff for meeting targets.
We beat the targets and bonuses are to be paid next month - but I have now resigned and will leave before the bonuses are paid out. My question is: am I still entitled to this bonus, even though it is scheduled to be paid when I am no longer working there?
Employees often wonder what will happen to their bonus if they resign. Employees sometimes delay their resignation until after bonuses are paid. Your bonus is due to be paid after your employment ends. Whether you are still entitled to it depends on the wording of the bonus scheme.
In your case, it sounds as though your employer must pay the bonus if employees meet the targets. The date for meeting the targets has passed. So the short answer is you are probably entitled to the bonus, unless you were told you would have to remain employed until the payment date, to receive it.
Bonus schemes can vary widely. They might form part of an employment agreement or they could be a stand-alone written or verbal agreement between the employer and employee. They might be mandatory - where the employer must pay a bonus if employees meet specified targets, or discretionary - where the employer can choose whether to provide a bonus at all and can withdraw the bonus scheme at any time for any reason.
Also, the scheme might say how the bonus amount will be calculated, or the amount might be entirely the employer's choice.
Having chosen to offer a bonus scheme, your employer must now follow the terms of the scheme it offered. Your rights depend on what those terms were.
From what you have said, the terms were that your employer is obliged to pay a bonus if targets were met by a particular date. You say the targets have been met and bonuses will be paid, but not until after you have left the company.
You should be entitled to the bonus even though you are leaving before the payment date, unless:
* You were told (verbally or in writing) that you must remain employed up until the date the bonus is paid (or another date that falls after you leave).
* Or the scheme allows the employer to refuse to pay the bonus to any particular employee for any reason it chooses. ie it was entirely discretionary.
* Or the scheme allows the employer to change its terms at any time, for any reason, so the employer can now say employees will only qualify for the bonus if they remain employed at the date of payment.
I don't know enough about your situation to know whether any of these apply. You will need to check what you were told about the scheme to see whether you are entitled to the bonus if you leave before it is paid. If this is not clear, you may wish to seek specific legal advice.
If your entitlement to the bonus did not depend on you remaining employed until it is paid, then you should tell your employer you are entitled to the bonus.
If your employer refuses to pay it, you can seek to have the problem resolved by mediation. You could lodge an employment relationship problem with the Employment Relations Authority.
* Rani Amaranathan is a solicitor in the employment team of transtasman law firm, Phillips Fox.
