The decorations are back in the loft, the shops would be full if it wasn’t for the VAT rise. It must be January. And that also means that it is bonus season, the time when managers start to take a close look at the bonus pot and wonder how to divide it between their staff.
This year more than many in recent times, many in the City are holding their breath to discover if they will be one of the unlucky ones to receive a donut – a big, fat zero – or worse, to be fired. This is the time of year when an employer has the best chance to reap the maximum benefit from your work without having to pay you.
For that reason, just as February to May is known as the hiring season, because that is when people working in financial services can leave without jeopardising the previous year’s bonus and without having worked too much of the current year to make them too expensive to buy out, this time of year is the firing season.
So, what should you do if you find yourself staring at a P45 when you thought you would be looking at a big bonus award? Will the law really allow your boss to get away with it?
The first place to start is by looking at your contract. The good news if you have been sacked is that if your contract does not specifically include words to the effect that you have to be in employment at the time when bonuses are paid to receive one, then you could still be entitled to one.
In other words, the good news is that the default position is that in the absence of any contrary wording in your contract, even if you are not working for an employer at the time bonuses are paid, if you have worked the year (or most of it) the law will say that your employer must still pay you a bonus. That still leaves you with the problem that any bonus is paid at the discretion of the employer. But the law does imply that discretionary bonus decisions must be “rational”, so the case for a bonus can clearly be made.
But what if your contract does have that kind of wording in it (and most do)? The short answer is that, unfair as it may seem, you are going to have to work very hard legally to get around it. The nub of the problem is that in most cases it is unfair but nothing more. Contract law is not about fairness; it is about enforcing agreements, so that will not help.
There is the Unfair Contracts Terms Act which disapplies unfair contract terms but that has been held only to apply to consumer contracts (and specifically not bankers’ employment contracts) and so that is no help in this context.
The law does put a price on fairness via the unfair dismissal legislation, but that is at about £65,000 – unless you can get yourself reinstated, which is very rare. For most bankers that figure is much less than they expected to be paid.
In short, unless you think the reason you were fired was because you were a whistle blower (for example, you had accused your firm or a client of malpractice) or was the result of discriminatory attitudes (because of your age, nationality, sex etc) then you are going to need a creative lawyer, a large appetite for risk and a sympathetic judge to stand a chance of getting your money.
So, happy New Year, but watch your back.