A friend of mine has not received bonus money for months. He has a contract that combines a base salary with bonuses, made from sales. This combination is the salary that he needs to modestly support his family. He has raised the issue of non-payment of the bonuses with his boss. However, no action was taken. The company is a large one. Is this acceptable practice for an employer? Can you recommend a course of action?
THE FIRST ANSWER
Vice-president, human resources, League Financial Partners, Victoria
A few questions need to be asked before I can point your friend in the right direction to get this situation resolved. Does his employment contract detail the structure of his compensation, both base and bonus? Are there explicit criteria for how and when bonuses are earned? Are there other people in the same sales group, and is the same thing happening to them?
It seems possible that the employer is having cash flow or timing issues. If this is otherwise a good company to work for, perhaps your friend should suggest a bonus payout timeline, such as monthly or quarterly payments, that would ease pressure on the employer but still make sure he gets what he is owed.
If the reality is that the employer is willfully breaking its contractual obligations, there are ways to get this addressed, but typically it will result in your friend having to leave the company before receiving what he is owed.
This might be seen as an unfortunate outcome, but if the company is not holding up its side of the bargain, there really is little choice but to take action, and frankly why would he want to continue working for such an employer? He will have entitlement to all bonuses earned, especially if the bonus was an integral part of the compensation package. This is the kind of case provincial employment standards offices love.
THE SECOND ANSWER
Former deputy prime minister
This is absolutely unacceptable behaviour. A company that promises remuneration via a combination of base salary and bonus is required to pay both in a timely fashion. Your friend’s boss must be aware of the financial burden that non-payment is placing on his financial stability.
If his manager has been made aware of the situation, it is time to move the issue up the corporate ladder. This is a large company, so your friend should first request a meeting with the boss to discuss the issue. He should send a written request for the meeting with a copy to his boss’s superior. This communication ensures the company is fully aware of this potential breach of employment contract.
At the meeting, he should clearly lay out the agreed time frames of bonus payment and the difficulties that non-payment have created. If his manager is unwilling to act, the next step should be a meeting with the boss’s superior.
Throughout the process, your friend should keep copious notes of all attempts to secure payment. If he is forced to seek compensation via the legal route, written documentation will buttress his case.
It may be that the company is experiencing financial problems. But that is not germane to its obligation to remunerate employees properly according to signed contracts.
Any refusal to respect an employee’s contract puts the company in breach of the law. The last resort (which usually accompanies departure from the job) is a complaint to the relevant provincial labour board and/or a lawsuit. This route is costly and time-consuming so any pressure that can resolve the issue internally is preferable. Good luck to your friend!
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