The path towards addressing money-related issues is never a straightforward one. If an employee resigns prior to the payout of a bonus, is the employee still entitled to that bonus?
The path towards addressing money-related issues is never a straightforward one. If an employee resigns prior to the payout of a bonus, is the employee still entitled to that bonus?
In order to answer the question above, employers must be retrospective and think of why they adopted the practice of giving out annual bonuses in the first place.
If the reason is tied to motivating employees in order for them to deliver good performance, then employees who have performed well should be given their due credit – regardless of whether they have tendered their resignation. It is only fair on the part of employers to deliver on their promises.
But if these bonuses had multiple purposes, which include retaining staff, then there is reason to consider withholding from – or cutting back on – the payout. As employers, you should not feel obliged to give an annual bonus if performance has not been justified, or when the company’s policy prohibits additional payment to employees who are no longer actively employed.
At the end of the day, in order to steer clear from legal issues and maintain moral standards, it is best for such policies to be clearly established in the company’s constitution. They should also be clearly communicated to employees before they sign on their contracts.
