Can my company take away my bonuses or benefits?

Can my company take away my bonuses or benefits?

Employee Benefit Schemes

Untitled Document

If you started your job with a great bonus scheme and 28 holidays a year, but your employer is having financial difficulties, is it legal for them to remove these sections from your contract?

The good news is that if your bonuses, holiday entitlements and other financial benefits are specified in your employment contract, once you have signed it they are contractually binding between you and your employer.

However, entitlements which form part of your contract of employment should not be confused with the general benefits you may receive which are simply a matter of company policy; including:

  • Impromptu days off
  • Christmas parties
  • Birthday gifts
  • Staff days out
  • Subsidised food and drink

These benefits are simply part of the culture of a company and may be changed or withdrawn when a company feels it's time for a change or they wish to make cutbacks.

The same goes for laptops and mobile phones. If it's not a vital part of your working tools, you may get them taken off you if the company is looking to tighten the purse strings.

Under the terms of your employment contract, some of the benefits that you are entitled to may also be subject to change – but only with your consent.

In most cases a company that is feeling the pinch and wishes to make cutbacks on certain entitlements such as car allowances, travel allowances, will attempt to make these changes ‘across the board'.

In other words the company may appeal to its employees as a whole to make the sacrifices needed to help keep the company in business.

In this case, the best advice is to agree to the proposals. It's better to have a job with slightly fewer benefits than to have no job at all. If you feel these changes are only being asked of you individually, or you feel that only a certain group of employees are being affected, you may wish to stand your ground, or take the matter up with your union if you're a member.

You need to read the terms and conditions of your employment contract extremely carefully regarding bonus payments. These are often subject to changes - which is why they are named ‘bonus payments'.

Bonuses get renegotiated, modified, delayed and changed all the time. Even if you have been receiving your bonus automatically for several years there is no guarantee that parts of it will not be changed or modified at any stage in the future.

Performance related bonuses are generally linked to company performances as well as your own. You may have achieved well above your targets, but if your employer is haemorrhaging money elsewhere, you may not get a payout.

Anyone may, at some time, have problems or concerns with bonuses, benefits or entitlements. Remember, as much as you want to sort things out, it is also clearly in an organisation's interests to resolve problems before they can develop into major difficulties.

Should you have a grievance then try to deal with it at an early stage with your immediate superior. Most organisations have procedures in place to handle grievances so pursuing the informal, internal route may cause you less stress and be more effective.