We are a small company who are part of a bigger group ZZZ.

The staff in our company have a clause in their contract which states “You are eligible to participate in “Our Company Name” bonus scheme. The scheme pays an annual bonus subject to the financial performance of company and to rules governing the Company’s Bonus Scheme”

There have never been any written rules governing the bonus scheme but it has always been a performance bonus based on XXX performance. The bonus has been paid out every year since the company has been in existence (5 years)as the company has always performed well and achieved its targets.

ZZZ have recently issued a memo to senior managers of operating companies within ZZZ group stating that for the year 2009-2010 (and we assume until firther notice) that the bonus scheme is being suspended due to trading factors in the remainder of the group ZZZ. XXX is not affected by these trading conditions and continues to operate profitably and achieve targets. Whilst we have sympathy with the rest of the group, if it were the other way round and we weren’t achieving targets and the rest of the group were, we would expect our bonuses not to be paid.

The contract of emplyment states that it is XXX bonus scheme and not ZZZ.

Are ZZZ in breach or are we “screwed”.

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