Dispute: Defect in employment contract
A solicitor has failed in a claim for a bonus of nearly £10,000 after a contractual dispute an employment tribunal found “entirely” of his law firm’s making.
Judge Tinnion held that the established practice of Fullers Family Law was to calculate contractual bonuses by reference to annual work anniversaries, rather than its financial year.
However, it failed to tell Alex Anastasiou that this was the case, either orally or in his contract.
This was the sole issue the London Central Employment Tribunal had to decide – if it was calculated on the financial year, Mr Anastasiou would have been entitled to a bonus of £9,608; on the basis of his work anniversary, he had not earned a bonus.
Mr Anastasiou started working as an associate director and team leader at the London firm in December 2022 under a contract that featured a bonus scheme paying 30% of all fees received over three times his £90,000 annual salary.
This became an issue in 2024 after the firm’s year-end. Fullers refused to pay a bonus – in Mr Anastasiou’s work year to December 2023, he had generated £250,000 in fees – and rejected the grievance he raised over the issue.
Judge Tinnion held that Mr Anastasiou, now a legal director at Sherrards, had not proven his contract required the firm to calculate the bonus using its financial year.
Though the solicitor was aware that Fullers’ financial year ran from 1 April, they had neither discussed nor agreed what 12-month reference period would be used to calculate the potential bonus; the judge said this was “an undoubted defect” in the drafting of the contract.
The tribunal was satisfied, however, that Fullers’ practice was to calculate contractual bonuses based on start dates.
“This fact was known by the respondent, was not known by the claimant, but was information reasonably available to him at the time – had he asked the question, he would have been told that, and there is no reason to think that if he had been told that, he would have been dissatisfied with that answer, or sought to renegotiate that part of the contract to provide for a different reference period.”
It did not matter that performance reviews were based on the financial year as the bonus was not discretionary, the judge continued.
“It will be of no comfort to the claimant, but the tribunal accepts the dispute which has arisen is entirely of the respondent’s own making, arising from its failure to notify the claimant in writing at the outset of his employment what the contractual bonus reference period would be.”
Leave a Comment