Employee awarded $185,000 in unpaid bonuses

The ERA has ordered textiles company C-Force to pay Grant Thompson $185,000 in bonus arrears. Photo / File

An Auckland textiles company has been ordered to pay its former general manager $185,000 after it short-changed him on his bonus payments.

Grant Thompson worked for C-Force Textile Industries between 1999 and 2011, first as a sales manager and later as general manager.

He claimed the company failed to pay his bonuses in his final three years of employment and took the dispute to the Employment Relations Authority (ERA).

Thompson told the ERA that C-Force breached his employment agreement after it stopped his bonus payments between July 2008 and October 2011.

The ERA heard Thompson knew his bonus payments stopped in July 2008 but he did not take action at the time because he worried about losing his job.

"He says he viewed his unpaid bonuses as a nest egg which was accruing to him throughout his employment," said ERA member Rachel Larmer.

"Mr Thompson said it was not until he was made redundant that he decided to pursue his alleged unpaid bonus entitlements."

The ERA said it did not accept C-Force's argument that by failing to bring the matter up, Thompson had accepted the change to his bonus payments.

"Mr Thompson has six years within which to pursue his claim. I consider it was within his rights to decide at what point he wished to do so," Larmer said.

Thompson started at C-Force as a sales manager in 1999 and was paid his bonus entitlement based on total company sales.

In June 2001, he was appointed general manager and continued receiving his bonus pay at the same calculation, up until July 2008.

The Mt Wellington-based company counterclaimed against Thompson for $266,000, being the total bonuses it paid him between June 2005 and June 2008.

"It claims this amount was incorrectly paid to Mr Thompson because it wrongly calculated his bonus entitlement based on total company sales instead of his personal sales only," Larmer said.

The ERA dismissed the counterclaim, saying the company's general director Mr Zhang should have picked the error up at the time.

"If Mr Zhang genuinely believed Mr Thompson was only entitled to bonuses on his personal sales then he should have easily identified that the amount of bonus being paid to Mr Thompson was substantially higher than expected had it been based on personal sales only."

In its final decision, the ERA ordered C-Force to pay Thompson $185,144.72 in bonus arrears, plus holiday pay on those arrears.

The bonus payments awarded were calculated against total company sales, not personal sales.

Thompson failed in his bid for interest to be paid on the bonus arrears.

"I do not consider it just to award interest in respect of the bonus or holiday pay entitlements which Mr Thompson is owed," Larmer said.

"If Mr Thompson had elected to raise his concern about unpaid bonus payments with C-Force promptly in 2008, then the issue of interest may not have even been relevant."