Scottish contractor ordered to repay ‘unlawfully’ withheld bonuses

A Scottish contractor has been ordered to a pay a former employee £3,306 in unpaid bonuses.

Glasgow-based Redpath, which specialises in refurbishment and interiors, did not pay the bonus money to project manager David McCann after he resigned in July 2022 – despite being obliged to do so.

The company pays bonuses to certain employees, including project managers, upon the profitable and timely completion of projects. In June 2020, McCann was told by Redpath co-founder Alister Sloan that he would be paid £4,906 in bonuses.

The email explained: “As we are still suffering a bit from a covid hangover, we will spread the bonus payments over three months – with £1,600 in June and July and the balance of £1,706 to be paid in August.”

However, after McCann resigned in July, Redpath did not pay the second bonus instalment of £1,600 at the end of the month as previously promised, and nor did it pay the third instalment of £1,706 in August.

Redpath argued that it was not obliged to pay the bonus payments after McCann had left.

However, McCann said that under the terms of the company’s written bonus scheme, his £4,906 bonus money should have all been paid in June before he left, rather than in instalments – and that he did not consent to the bonus being paid in instalments.

An employment tribunal found that Redpath’s bonus scheme was discretionary, not contractual – and that McCann had accepted the payment in instalments. However, it said once a bonus had been promised to an employee it should be paid, unless certain conditions or terms are broken.

It found that Redpath did have a policy not to pay bonuses to staff that leave the company, but that this policy was not clearly attached to the bonus in question.

The employment tribunal therefore concluded McCann was entitled to the second and third instalments of his bonus and that Redpath had made “unlawful deductions” from McCann’s wages. It ordered the money be repaid to McCann, minus any tax or national insurance deductions.

Redpath was contacted for comment.