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Bonus Discrimination
What sort of bonus payments are there?
Bonuses are an important part of how many people get paid. Some are paid across the board to the whole company, others are discretionary and based on individual performance. There can be problems when it is not clear how bonuses are paid and sometimes they can be discriminatory.
What sort of things would count as sex discrimination?
It is direct discrimination if as a female you are paid a lower bonus than a comparable male colleague and your employer can't give a good reason for this. There have been cases, particularly in the City, where discretionary bonuses weren't transparent. Because the employers had no written records, they couldn't explain why female employees had been awarded less than male employees.
It is also direct discrimination if you get a lower bonus and you can show this was because you were pregnant or on maternity leave. In this case, you would not have to compare your bonus with a male employee.
Can my employer reduce my bonus if I am on maternity leave?
It depends. If your bonus is contractual and not related to your individual performance, your employer can calculate the amount on a pro-rata basis to reflect your maternity absence period.
However, if your bonus is contractual, but the amount is related to your individual performance, it may be sex discrimination if you get a lower amount because of your maternity leave.
This is a difficult area and each case will be different, so it is important you get legal advice.
What about age discrimination?
Since October 2006, it has been illegal to discriminate against someone at work because of their age.
It might be indirect age discrimination if a bonus is awarded only after a certain length of service, because older people are more likely to have long service.
However, employers may pay bonuses to reward loyalty or recognise experience. So your employer is allowed to pay a fixed bonus for five years' service or less. If they want to pay a bonus for more than five years' service, they will have to justify it. This means they will have to show it reflects a higher level of experience, encourages loyalty and motivation, or meets another business need.
You may be able to claim age discrimination if you don't get a bonus but one of your colleagues of a different age does. Your employer would have to show that the different treatment is justified. This is quite hard to show and your employer will need evidence.
This fact sheet will give you some basic information about discrimination in bonus payments.
Please be aware that this is not legal advice and if you are concerned about any of the issues mentioned you should speak to a lawyer.
You can contact Russell Jones & Walker's solicitors at enquiries@rjw.co.uk.
For more information you can download this fact sheet to read offline or print.
