Witholding of bonus payment by employer constituted an unlawful deduction of wages

Appellants are ten employees of the respondent who commenced their employment on different dates between the years 2001 and 2008 respectively in different retail premises operated by the respondent - first, second, third, fourth, fifth, sixth and tenth appellants claim an entitlement to be paid a winter/summer bonus under their respective contracts of employment - the bonus was normally paid twice annually and amounted to 6% per annum of gross salary - those commencing employment in 2009 did not benefit from this bonus scheme - employer discontinued the bonus scheme applicable to the appellants in January 2012 but later indicated that it would take effect from 1st April 2012 - the appellants claim that the summer bonus, payable in 2012, should nevertheless have been paid since it was earned and/or accrued during the previous August to January - appeal is from a number of determinations made by the Employment Appeals Tribunal on 14th May 2014 in respect of appeals against decisions of the Rights Commissioner following complaints brought by the appellants - appellants seek declarations that the respondent made unlawful deductions from the appellants wages, that the winter/summer bonus and/or zone allowance are properly payable to the appellants and that the appellants are entitled to compensation for unlawful deductions - the court is satisfied that the winter/summer bonus at issue in this case was not declared by the employer at any stage, and the tribunal was not invited to and did not make any finding that a bonus had been declared - the terms of the contract and bonus scheme must be interpreted in the overall context of the contract - employer had a wide discretion under the terms of the contract and scheme to withdraw the scheme which must be exercised reasonably - there is a very high onus on an employee who claims that the discretion was unreasonably exercised - the respondent was obliged to seek examinership and was clearly in a very difficult financial situation and therefore the decision to withdraw the bonus could not be regarded as unreasonable - the tribunal’s decision is rooted in the finding that the employee’s handbook provides a consistent clause common to each contract to the effect that all bonus schemes are discretionary and are subject to scheme rules and may be reviewed or withdrawn at any time - the payment of the bonus crystallised as a contractual obligation once it was “earned” in accordance with the terms of the scheme as operated - employer bore a contractual obligation to pay the 3% bonus accrued to each employee during the relevant six month period and that this was a bonus properly payable as “wages” under section 5(1) of the 1991 Act.