Short-service employee wins £3,423 for unpaid bonus and notice pay

When a restructuring offer turns into a dismissal

This case shows how a seemingly straightforward restructuring meeting can lead to a dispute over notice pay and bonuses. The former employee, a Natural Justice Administrator, had only been with GTEP Administration Limited for four months when the company announced a restructuring and offered 4 weeks' pay in lieu of notice to administration staff. He accepted the offer by resigning, but the company later dismissed him for alleged insubordination and failed to pay the notice pay or a quarterly bonus that had been confirmed by his line manager.

What the tribunal decided

The tribunal first had to establish the claimant's employment status. Despite the contract being titled 'Agreement to Supply Exclusive Services', the tribunal found he was an employee under a contract of service. This was crucial because only employees can claim breach of contract and unauthorised deductions. The unfair dismissal claim was struck out due to insufficient service (less than two years), but the other claims succeeded.

The respondent argued the claimant was a worker, not an employee, and that no notice pay or bonus was due. However, the tribunal noted that the respondent had confirmed the notice pay in writing and that the bonus was a contractual entitlement. The respondent's failure to pay these amounts amounted to a breach of contract and an unauthorised deduction from wages.

What the losing side could have done differently

The respondent could have avoided this outcome by honouring its own written commitments. It offered 4 weeks' pay in lieu of notice and confirmed the bonus after a successful appraisal. Instead of paying these sums, it dismissed the claimant and refused to pay. The respondent also failed to attend the hearing, which meant the tribunal decided the case based on the claimant's evidence alone.

Why this matters for similar claims

This case is a reminder that employment status is determined by the reality of the working relationship, not the label on the contract. Even short-service employees have rights to contractual payments like notice pay and bonuses. If an employer makes a promise in writing, they must keep it – or face a claim for breach of contract and unauthorised deductions.