Performance bonus

I was a part of senior management of a South African company and was given the company’s highest rating at an annual performance appraisal and compensated with a $100,000 performance bonus as well as a salary increase of 20%. The letter stated as follows: “Your hard work, dedication and loyalty are herewith acknowledged and you are similarly thanked therefore. As a most valued employee it was further decided to reward you with a performance bonus of $100,000 as well as a salary increase of 20.00%...”

In the same letter the company stated that I will be liable to pay the said $100,000 back in the event that I resign within 1 year from the date of the letter. Unfortunately I resigned after five months from the date of the letter.

The company has now filed a motion in the local High Court for me to pay the $100,000 dollars back.

Although I know that the company stated that I will be liable to pay the money back if I resigned within 1 year, I never thought (or rather believe) that such a condition can be enforceable. Mainly, because I believe, and maintain, that the performance bonus was paid for past performance. Also, there was no written agreement between me and the company for the repayment of the said bonus – the repayment condition was just stated within the performance appraisal letter. For instance, I was not asked to sign the letter as an acknowledgement of the condition.

I’m about the file a motion to defend myself but would first like to get some opinions from labour or contract law practitioners. Please advice?

Questions:

1. Can a company include such a condition for past performance?
2. Can such a condition be enforceable and accepted by any competent court of law?
3. In the worst case scenario where such a condition is enforceable and the company is right, what amount should I repay? $100,000? Or a portion of it? What portion and why?

Originally Posted by Unregistered

I was a part of senior management of a South African company and was given the company’s highest rating at an annual performance appraisal and compensated with a $100,000 performance bonus as well as a salary increase of 20%. The letter stated as follows: “Your hard work, dedication and loyalty are herewith acknowledged and you are similarly thanked therefore. As a most valued employee it was further decided to reward you with a performance bonus of $100,000 as well as a salary increase of 20.00%...”

In the same letter the company stated that I will be liable to pay the said $100,000 back in the event that I resign within 1 year from the date of the letter. Unfortunately I resigned after five months from the date of the letter.

The company has now filed a motion in the local High Court for me to pay the $100,000 dollars back.


Contact me at 082 569 41 98 if you need professional advice. Marius

Although I know that the company stated that I will be liable to pay the money back if I resigned within 1 year, I never thought (or rather believe) that such a condition can be enforceable. Mainly, because I believe, and maintain, that the performance bonus was paid for past performance. Also, there was no written agreement between me and the company for the repayment of the said bonus – the repayment condition was just stated within the performance appraisal letter. For instance, I was not asked to sign the letter as an acknowledgement of the condition.

I’m about the file a motion to defend myself but would first like to get some opinions from labour or contract law practitioners. Please advice?

Questions:

1. Can a company include such a condition for past performance?
2. Can such a condition be enforceable and accepted by any competent court of law?
3. In the worst case scenario where such a condition is enforceable and the company is right, what amount should I repay? $100,000? Or a portion of it? What portion and why?

Pleas contact me at 082 569 4198 for professional advice. Marius