The High Court ruled that B&Q Ireland Limited had to pay eligible employees a 3% summer bonus earned during the six-month period from August 2011 to January 2012, even though the company had withdrawn its bonus scheme before the payment was due. The court did not disturb the Employment Appeals Tribunal’s decision on the separate zone allowance claim.
The case was an appeal on points of law under the Payment of Wages Act 1991 against Tribunal determinations made on 14 May 2014. The Tribunal had overturned Rights Commissioner decisions that had upheld the employees’ complaints.
The ten appellants were employees of B&Q. Their contracts included an employee handbook clause saying bonus schemes were discretionary and could be reviewed or withdrawn at any time. The scheme provided eligible staff with a bonus of 3% of basic pay after each six-month trading period, subject to service and accrual conditions.
B&Q announced in January 2012 that it would end the scheme from 1 April. The affected employees argued that the summer bonus was already earned through work completed in the previous August-to-January period. B&Q maintained that the withdrawal clause allowed it to withhold payment. The Tribunal had accepted the employer’s position.
The High Court said the employer could withdraw the scheme prospectively, including for work periods that had not yet begun. But it found that the discretion did not extend to withholding the bonus for a period employees had already worked and for which the scheme quantified a payment. The court held that the Tribunal had erred in law: the accrued bonus was properly payable as wages under the 1991 Act. It also found that B&Q’s difficult financial position did not make its decision to end future bonus accrual unreasonable.
The employees’ separate claim concerned a €0.41-per-hour zone allowance paid to eligible staff at B&Q’s Dublin-area stores in Swords, Tallaght and Liffey Valley. B&Q removed the allowance from 1 April 2012, describing it as compensation for working in those areas, where living costs were considered higher. The company had offered a buy-out and a cushion payment, which the appellants refused.
The High Court found no legal error in the Tribunal’s treatment of the allowance as an expense under the Act, rather than wages. It therefore rejected the appeal on that issue. The judgment’s conclusion was limited to the two claims before it: the bonus was payable for the completed accrual period, while the zone allowance claim did not qualify for relief under the 1991 Act.