Western Australian Industrial Relations Commission

Applicant entitled to annual bonus after meeting performance indicators

The Commission has upheld a claim for a denied contractual benefit by an operations manager who said that he was denied an annual bonus to which he was entitled to under his contract of employment.

The applicant was employed in April 2019 under a written contract of employment, which provided for an annual bonus of $15,000 on achievement of key performance indicators.

The applicant said that he undertook a performance appraisal with the general manager in March 2020 and testified that he met all the key performance indicators.

On 11 May 2020, the applicant received a letter informing him that his position was to be made redundant. Senior Commissioner Kenner noted that the letter referred to payments upon his departure, including an “annual bonus $15,000”.

However, on 18 May 2020, the applicant received another letter referring to the termination of his employment to be effective on 27 May 2020. This letter referred to what was described as a “discretionary bonus payment”.

The respondent argued that the bonus was only payable on the combination of the achievement of personal key performance indicators and the key performance indicators of the respondent’s business as a whole.

Kenner SC found that the bonus entitlement set out in the contract was plain and clear, and that on a proper construction of the applicant’s contract of employment, he was entitled to a $15,000 annual bonus on the satisfaction of key performance indicators given to him at the commencement of his employment.

The claim was upheld, and the respondent was ordered to pay the applicant the annual bonus of $15,000.

The decision can be read here.

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