Complex payrise/notice issue

[Shattered04]

Imagine a scenario where pay rises are traditionally given out once a year, and apply from the 1st of that month. Pay day is toward the end of the month but the pay given will include the raise dated from the 1st. Letters confirming the pay rise are supposed to be given out near the start of the month, but in reality, it is more like a few days before payday due to company bureaucracy and under-resourcing.

If somebody gave their notice on the 10th of that month but before receiving the letter, should they still receive the pay rise they had been going to get?

Assume the company policy (not widely known or published - the employee could have no way of knowing it) is that pay rises can be taken away at "any stage in the process" if an employee gives notice. The contract also states that pay reviews are at the company's discretion but no mention of anything else relevant.

It goes without saying that the employee would probably not query the decision, had notice been given before the first of the month in which the pay rise applied from.

Most companies do not give rises or bonuses to those under notice.

Not certain what the actual legals are on this but my gut instinct is they are under no obligation to honour company wife payrises for a staff member who has resigned already unless it’s a contractual right, which is extremely rare (in the private sector at least)

if we had someone give 3 months notice a week before the pay rise was discussed / communicated, they simply would be removed from the discussion. Pay increases are largely about staff retention, and if they are leaving we wouldn’t even consider it.

Company wide* not wife!!

Our company stipulates that the pay rise is not applicable to staff under notice or currently being performance managed.

Definitely don't disagree with any of that! However, the moral quandary here is that the pay rises will have already been applied (in terms of what people are earning each day) by the time the notice was given, even if the pay itself had not yet been delivered.

You mention a ‘moral quandary’. Are you asking from the point of view of the business owner/manager deciding whether to give someone a pay rise from a moral point of view, or an employee wanting to know if they are legally entitled to demand it?

The question is mostly relating to this traditionally given out once a year is it contracted that payrises will be given in this month every year? If not then there is no liability for the rise and only an assumption from the employee that they will be getting one.

QforCucumber - I believe (haven't got it to hand right now) the contract only says "no less than once a year" - but pay reviews are company-wide in July for all eligible employees, which has been the case as long as anyone can remember. My pay rise had been decided, just not communicated to me.

flowery - In this case I'm the employee, and I'll quite happily admit my judgement is clouded as there's a lot of complex emotions involved, and I'll freely admit I'm quite hurt. Mainly this is due to my years of "above and beyond the day job" commitment to the company and its people, until I was effectively headhunted for a complete no-brainer opportunity elsewhere that they had no hope of matching.

Just to reiterate - I wouldn't have queried this had the pay rise not already been decided albeit not communicated, and in theory should already have been in effect for the ten days before I gave my notice. If I'd given my notice on 30th June I would fully understand that it would be a black and white case of no pay review.

I guess what I want to know is should they legally have given it? As if not, I won't chase it any further even if I do think they could have used the timings as a reason for an exception if they really wanted to.

How do you know you've got a pay rise if it hasn't been communicated yet?

That notwithstanding, at very best you might get the rise pro-rata'd from 1st -10th/date you gave notice.

As they are discretionary they have exercised their discretion to not give you the rise which they are allowed to do.

The only basis upon which you (or anyone else) is entitled to a pay rise is if you are contractually entitled to it, or if not giving it to you would be in breach of some other legislation, such as the Equality Act, or minimum wage regulations.

It sounds as though your contract is clear that pay rises are not a contractual entitlement, but a discretionary thing, which is obviously normal. It also sounds like there has been no contract variation letter (because of course a pay rise is a contract variation) or other correspondence confirming entitlement (to you, even if such correspondence has been sent to others). Your own contract hasn't been varied, therefore you have no contractual entitlement to the pay rise.

You've been excluded from a blanket contract variation (in the form of a pay rise), that is clear, so the only question is whether you were excluded on lawful grounds. The reason for your exclusion is that you are leaving, and leavers have no protection from being treated less favourably, therefore it's fine to exclude you.

Thanks all, much appreciated. In a way it's a relief there's no legal recourse, because it means I can close the door on it and move on! It would have really niggled otherwise.

I think ultimately I just wanted to know how much it was. I delivered a massive project not long before, and it's only human to want to know how much they felt that was worth to them!