The Company I have recently joined acquired another approximately 1 year ago. It was recognised that this was covered by TUPE.

Under the employees T&Cs with the previous employers they were eligible for bonus payments – both individual and corporate – ‘at discretion of management’.

We have records showing that the Corporate bonus was not always paid – dependent on overall business profitablity for year. However, it would appear that the ‘individual’ bonuses (variable up to 5% of salary – based on the Team Manager’s recommendation re performance) have always been paid.

As the bonus payments were ‘discretionary’ are they covered by TUPE? Our letter to them at time of takeover stated ‘as with your employment with …… payment of any bonus is entirely at the discretion of the Company’.

We are to commence consultation with all the staff (collectively/ individually)to change the criteria for payment of bonus pay but my Chairman would like to know if we can just use the Company’s discretion and not pay anything or if (under TUPE)we must continue to award something.

My thoughts are that even though something is ‘discretionary’ this discretion must be used reasonably.

If recognising that, although an individuals performance has been good and meeting expectations(a level which we believe is what we pay basic salary for), if nothing outstanding is identified would it be reasonable to use the discretion not to pay?

Any help/advice on this would be very much appreciated.

Thank you
Sue
Sue Martin