In Niall O’Reilly v Cavan Box Limited (ADJ-00061856) the Workplace Relations Commission (“WRC”) awarded a former employee €10,000 after finding that his employer had breached his contract of employment by failing to implement a contractual bonus scheme. The Complainant brought the claim to the WRC under the Payment of Wages Act 1991 (the “Act”).
Facts:
The Complainant commenced employment with the Respondent as a Maintenance Manager on 10th June 2024. His contract provided for a basic salary of €60,000 and stated under the heading “Benefits”:
“Your position has the benefit of a KPI Management Bonus Scheme of €20,000.00 details of which will be agreed on and be confirmed in writing after 3 months from start date. Operated on a 12-month window…”
However, the key performance indicators (“KPIs”) were never finalised or confirmed in writing and the Complainant did not receive any part of the €20,000 bonus.
The Complainant’s position was that he had repeatedly raised the bonus during his employment but had not been provided with written KPIs. The Complainant gave evidence that the job was originally advertised with a salary of €80,000 and he was dismayed when the €60,000 basic salary was offered. He maintained that he had been told during the recruitment process that the bonus would be paid in full.
The Complainant told the WRC that he received no complaints concerning his performance, hours or attendance. He also gave evidence that the Respondent had offered to pay him €5,000 as part payment of the bonus in June 2025, but that this payment did not materialise. The Complainant submitted that it was the Respondent’s responsibility to set the KPIs and that he was willing to engage in discussions about them. He further maintained that the Respondent had admitted during one of their discussions that he had met the relevant performance indicators.
The Respondent disputed that the bonus was guaranteed. The Respondent’s General Manager gave evidence to the WRC regarding the company’s bonus system – that he ran it for the calendar year and that it was linked to the company accounts, each employee’s own speciality, sales and output. He submitted that achieving 90% of sales targets was key to the payment of any bonus and that he had informed the Complainant that he was not meeting his KPIs.
The Respondent’s representative argued that, as the KPIs had never been agreed or put in writing, the bonus was not properly payable under the Act.
Decision:
The WRC Adjudicator, Peter O’Brien, upheld the Complainant’s claim. The Adjudicator noted that a bonus falls within the definition of “wages” under the Act. The central issue was therefore whether the bonus, or any part of it, was “properly payable” to the Complainant for the purposes of the Act.
The Adjudicator acknowledged that bonus arrangements are often open to interpretation, as bonuses are generally not guaranteed and an assessment of performance against objectives may be subjective. However, the more fundamental issue in this case was that the process through which the Complainant could earn the bonus had never been implemented.
Although the contract did not expressly identify which party was responsible for initiating the KPI agreement process, the Adjudicator considered it reasonable to conclude that responsibility rested with the Respondent. The Adjudicator asked the Respondent whether they had a written general policy concerning the bonus scheme and they confirmed they do not. In that context, the Adjudicator concluded that it was not reasonable to expect a new employee to initiate and devise the way in which the scheme would operate.
The Adjudicator found that the Respondent’s failure to initiate and finalise the bonus process amounted to a breach of the Complainant’s contract and deprived him of the opportunity to earn a bonus representing a significant proportion of his remuneration.
The Adjudicator described the Respondent’s argument (that because the KPIs had not been agreed or put in writing, no liability for a bonus could arise) as “innovative” but found that it had no validity. The Adjudicator’s view was that accepting that position would undermine the entire purpose of the contractual bonus clause and would allow the Respondent to rely on its own failure to put the relevant arrangements in place. As the Adjudicator stated:
“the Complainant cannot be disadvantaged to have a bonus opportunity by an omission of the Respondent.”
The Adjudicator therefore found that an unlawful deduction from the Complainant’s wages had occurred due to the Respondent’s breach of contract.
In considering redress, the Adjudicator found that the eligible period for the bonus ran from 19th September 2024 to the Complainant’s last effective working day on 6th June 2025, a period of approximately eight and a half months. On a pro-rata basis, the potential bonus for that period was calculated at €14,166.
The Adjudicator took account of the absence of any stated performance issues, the Respondent’s efforts to retain the Complainant in employment and its previous offer to pay €5,000 towards the bonus. At the same time, the Adjudicator recognised that it would not be appropriate for the WRC itself to assess the Complainant’s performance against KPIs that had never been established. Having considered all of the circumstances, the Adjudicator awarded the Complainant €10,000.
Takeaway for Employers:
This decision highlights the importance of ensuring that contractual bonus schemes are properly implemented. Employers should take note that according to this decision, an employer cannot rely on its failure to set key performance indicators or otherwise implement a contractual bonus scheme as justification for not paying an employee a bonus payment. If an employee’s contract of employment provides for a contractual bonus subject to key performance indicators being confirmed and set out in writing then an employer will be expected to fully implement the bonus scheme. A failure to properly implement a contractual bonus scheme may expose the employer to a claim under the Payment of Wages Act 1991, even where the employee’s entitlement to the bonus would have been dependant on an assessment of performance.
Employers should also ensure that the wording of an employee’s contract is consistent with the operation of the scheme in practice. In this case, the Respondent maintained that the scheme operated by reference to the calendar year and was dependent on individual performance, company sales and capital expenditure. However, those conditions were not expressed in the contractual bonus clause.
Link – https://workplacerelations.ie/en/cases/2026/august/adj-00061856.html
Authors – Tara Kelly and Jenny Wakely
24th September 2026
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