Wages\Bonus payment question

[alferret]

First a quick bit of company background.

3 teams.
Team 1 consists of 7 people and bonus payments are made as a group, we earn £1000 bonus it gets split 7 ways.

Team 2 is made up of 9 people, these get paid bonus on the work they do as an individual. Person A, makes £1000 he gets the full amount.

Team 3 is 2 people their bonus payment is as a group they get 50% each.

Nowhere in the contract does it state that bonus payments will be withheld or stopped although it is at the companies discretion that bonus payments are made.

Here is the question.
A member of team 1 made a mistake on the sizes of a quantity of material, this wasnt picked up until the assembly process where the item in question is 25mm to short and no good to man or beast.
The company brought in extra material to replace the said item at a cost of £550, it took an additional 7 or so man hours to machine the material and get it into assembly.
The owner of the company gave the guy a *******ing (which is fair enough) but here is where the problem I think starts.
We have been told that we as a group (team A) will have to cover the additional costs incurred by loss of bonus until £750 has been paid back.
As this was the fault of an individual why isn’t his bonus stopped until the money has been recovered. Why do we (the other 6) have to lose out on our bonus payment.
Is it legal for the company to stop payments to others, other than the individual in question.
Or is it legal at all if there is nothing in the contract that states that the company will recover money from employee’s if there is a mistake.
I would like to see something from an official Gov site as regards stopping payments if possible.


Hope I have been clear about the issue and would appreciate any help. Oh and I am not the person in question who cocked up.


Cheers


Al

[jellybaby]

I think as the bonus's are paid at the companies discretion they can do as they please. Also, as its from group A, where the bonus is made and shared by a group, i suppose this also works the other way round ie the loss is shared by the group also. This of course is my opinion of things.

[Aragorn]

I guess it all depends on what, if anything, is in your contract of employment. I'm no expert, but afaik 'bonuses' are completely at the discretion of the employer and if as a result of a a mistake a 'group' makes £750 less profit then the employer is entitled to say the 'bonus' pot is £750 less.
Probably not what you want to hear and if I'm wrong we'll both be happy.

[Angua]

Where it does seem a bit arbitrary is not having a time limit on when this bonus will have covered the cost. If you never get another bonus they will not get their money and nor will you have any incentive to collectively work for the bonus in the future.

[Aragorn]

Just found an interesting legal view on 'commission and bonuses'. More relevant to commission but still reinforces the generally discretionary nature of bonuses.

---------- Post added at 16:01 ---------- Previous post was at 15:59 ----------

Another opinion here.

[joglynne]

Due to the recent furor about bonus's in the banking world there are quite a lot of articles out there dealing with the types of bonuses in existence.

From what I can see everything depends on what type of discretionary bonus is laid out in your contract as a “discretionary bonus” can have a variety of meanings.

Here's one of the many articles I found. This one hinges around a withheld bonus payment and concludes that :-

This case highlights the importance of setting out the terms of any bonus scheme very carefully, and at the very least making it clear where the employer can exercise its discretion- be that over the status of the scheme, the calculation of any bonus payment, and/or the terms of entitlement to any bonus payment. The simple fact that a bonus scheme has been described as “discretionary” will not in itself give the employer the opportunity to withhold or refuse to make a bonus payment to its staff.

http://www.hallett-els.co.uk/News/Article.aspx?id=184

[Xaccers]

Had a great one at my last permanent role. We used to get £400 every quarter for meeting our objectives, then as the company got closer to making a profit, they cancelled the bonuses.
Eventually they reinstated them, but we (the support team) would only get a bonus if the sales team hit their targets too.
Well, with new business coming in, and no extra staff, everyone was doing the work of 2 or 3 people.
We had someone from senior management come in and tell us how much they appreciated how hard we were working, customer satisfaction was actually up, but the sales team hadn't hit their targets so we'd get no bonus.
Because a bunch of smarmy asshats hadn't wined and dined enough people, our extra work was pointless.
And they wondered why moral was low!

[papa smurf]

theres no iin team

[Xaccers]

Originally Posted by papa smurf

theres no iin team

But there is "me"

[alferret]

I have been looking for my contract but it seems to be missing so I'll ask for a copy on Monday just to check the wording. But IIRC it says something along the lines of.
Bonus is paid at £5.00 per hour or part there of on a monthly basis. If you exceed the chargeable hours for any job then bonus is taken away from the whole amount of hours across the pay month and not just for that particular job.


Example:
Job A, estimated 100hrs, taken 80hrs, bonus = 20hrs
Job B, estimated 33hrs, taken 35hrs, bonus = -2hrs
Job C, estimated 68hrs, taken 79hrs, bonus = -11hrs

Bonus payable for the month = 7hrs

[martyh]

in my opinion if one person in a team makes a mistake that costs the company money then the company has every right to withhold the money from the hole team after all they pay the bonus out of good will and a team is supposed to work together to make sure such mistakes don't happen
maybe you speak to the culprit and get your share of the bonus back off him/her

[Kymmy]

Unless the bonus is built into the contract and not "at the company's discretion" then you simply should not expect one..