Unpaid bonus

Case 5: The facts

City broker Mr Mouradian’s team was entitled to a share of its income as a bonus; as manager, he distributed the bonus in consultation with the chief executive. From a bonus pool of £1.4 million, he paid £1.3 million to himself and the rest to three team members. When he did not receive his share, he claimed unlawful deduction of wages. The issue on appeal was whether the tribunal had jurisdiction to hear the claim.

The ruling

The Employment Appeal Tribunal held that, if an employee believes that s/he is entitled to money s/he has not been paid but the amount due has not been decided, this must be brought as a breach of contract claim (which, unless the employment has ended, must be brought in the civil courts and not a tribunal).

However, since Mouradian was entitled to decide how much he was to be paid, the payment had already become due. His claim could therefore proceed as a claim for unlawful deduction of wages.