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Original poster

City bonus and Maternity leave

13 replies

squiffy · 26/01/2007 11:37

I'm back at work after a period of maternity leave and my annual bonus assessment is imminent. I know that the bank routinely scales down annual bonuses for the period of maternity leave and I also know that this is probably illegal (but there are no definitive cases - my bonus is completely discretionary and the law is only clear on contractual bonuses). I also know that our company lawyers always advise the mgmt each year to pay bonus in full (I've been present at such meetings as I am at mgr level myself), and the company is advised every year to not scale it back but they do it anyway...
What I don't know is if others have been in similar situations and fought it, and if so what the outcomes were? It will be a significant amount so am really keen to find out whether it is worth kicking up a stink or not - I quite like where I work and think this is farily standard treatment across the city, but am hoping that others might have experience here on what happens when you complain about this.

OP posts:
hecciesmum · 26/01/2007 15:24

I didn't get pro rata'd the first time. I will find out in a few weeks whether they will do it to me this time, but i was pretty emphatic that i thought it was illegal as it would be discriminatory to pay a lower discretionary bonus because someone has been away on maternity leave. I also said that if tehy want me to be demoralised and not feel important to the organisation - then that would be a great way to do it. Given that they need me I am hoping they won't be that daft.
I don't know what will happen this time, but i do know a few people who it happened to in the past. they complained big time and the powers that be coughed up.

Stand your ground. Just because you have been off for 6 months does not mean that your intrinsic value to the firm has deteriorated in any way.

good luck - hope the bonio fairy is good to you. God I hate this time of year - the suspense is killing.

Original poster
squiffy · 27/01/2007 07:59

Thanks for the info. I agree about the suspense - it's bad enough most years, but this year I'm having kittens about the whole thing. fingers crossed for both of us.

OP posts:
clerkKent · 29/01/2007 13:01

I work in HR for a city investment bank. We scale back the bonus for AML, not OML (which would be illegal). If you have been off work for a year it is difficult to argue why you should get the same 6- or 7-figure bonus as someone who has been working full-time throughout.

dassie · 29/01/2007 13:07

So if I go on maternity leave for a year (say a claendar year) - I am still entitled to 50% of my usual bonus?

At my bank maternity pay is based on average earnings (so includes bonus) but only if your maternity leave starts after May. Is that illegal?

CountessDracula · 29/01/2007 13:08

Surely a discretionary bonus is payed on performance, if you have been off on mat leave then presumably you have not been performing!

dassie · 29/01/2007 13:21

That's what I thought too.

My main worry is that when I come back (I leave end of Feb) I won't get 2/12 of this years bonus.

jellybellie · 29/01/2007 15:42

I work for a Bank in the City but am not in the realms of 6 figure "city bonuses". Our bonus scheme however does state that if you are on maternity leave then your annual bonus entitlement will be pro-rated for the time you were actually at work during the financial year the bonus relates to. The start of my maternity leave coincided with the start of the financial year so I was off for the first six months but back at work for the second six - my bonus for the year was effectively halved. I raised the issue with my boss but was told that as the bonus is performance linked they were entitled to prorata it - I didn't take it any further but would be interested in other posters experiences.

clerkKent · 29/01/2007 17:59

At a previous investment bank, the spiel went soemthing like this. Annual bonus is dependent on company performance, division/department performance, and individual performance. So even is you are not there, you still get some bonus. In some jobs, the outcome of good work is very long term - your work in 2005 affects the department's performance in 2007, even if you are absent. The bank had a top-secret scaling factor for maternity leave, e.g. off for 11-12 months equates to a maximum bonus reduction of, say, 90%. Everything was carefully worded to ensure this was not pro-rating (which may be illegal), even though in reality it was.

foxabout2pop · 29/01/2007 18:12

Squiffy - the Equal Opportunities Commission have a section on what's legal in terms of bonuses/mat leave on their website. Sorry I can't do the link, but its eoc.org.uk.

Judy1234 · 29/01/2007 18:15

Have you read the rules of the bonus scheme to see what they say about it and do you know what teh bonus is based on - you performance that year, earlier years, other people's performance or what?

Steppy1 · 29/01/2007 18:28

I was paid a substantial bonus, based on previous years performance, just after I went onto maternity leave with DS. The fact that you're on maternity leave shouldn't impact your bonus payment....but back on planet earth everybody knows that being treated the same as if you're at work full time when you're on leave simply doesn't happen. I agree with Xenia and would check out what appears in the commpany's policy...... Good luck !!

Original poster
squiffy · 07/02/2007 16:27

Thanks all for the input.

Dassie - the legal view is that if the bonus is fully discretionary with no contractual element (eg there is no set formula for calculating it) then it is outside the scope of maternity pay provisions, and if it is scaled back (either OML or AML) then there is a strong case that this scaling back is sex discrimination. Linklaters come in every year and tell all the managers in our bank that they must never never never scale back and must pay a full years' bonus regardless of length of absence. However, my company policy per their website says quite clearly that they will do so, and I know this is the same at many banks. Most banks hide behind their discretionery policy - eg personal/dept/company performance and so on, to justify the 'you weren't here, you didn't contribute' argument, but that doesn;t stop it actually being illegal.
Dassie you should be fine for your two months at least but anything after that I think is pot-luck.

I came into office quite a few times when on leave to sort out issues, and came back properly when DD was 9 weeks old so I think I will fight them tooth and nail if they dare to scale my stuff back (esp as the only other person doing the same job as me is a guy who was given 4 weeks paid exceptional leave on top of his vacation because of his wife's PND, and he definately ISN'T getting scaled back)... we shall see.

OP posts:
dassie · 07/02/2007 16:55

Thanks!

You seem to have a very good case so I would definitely fight it.

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