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Employment question: sign-on bonuses

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  • Employment question: sign-on bonuses

    Hi folks,

    Im looking at a new job, and employer is offering a sign-on bonus to sweeten the deal. While this is nice, it wont influence my decision to join in the least.
    They are suggesting, though, that if either party terminates the contract within three years, that the bonus is to be paid back in full.
    While I am happy to pay it back should I resign before 3 years, Im not sure it is fair for me to have to do this if they terminate.
    Does this sound reasonable/commonplace to anyone ?


  • #2
    Re: Employment question: sign-on bonuses


    a) Both of you ( the "parties" concerned) need to have a "Letter of Offer" of the position to you in place, setting out all the terms and conditions etc. It protects both parties and you both sign. This includes matters relating to confidentiality, anything related to expected conduct, and the method of judging your performance.

    b) You should ask that the condition in the Letter of Offer that sets out the "structure" of this "bonus", should say words to the effect

    1) that if you terminate for any reason before 3 years you pay it back and

    2) that if they terminate you before 3 years because of a disciplinary matter or non performance then you pay it back and

    3) that if they are terminating you for a reason other than a disciplinary or performance related matter (ie eg the position doesnt work out, or they re structure, whatever etc)....then you dont have to pay it back.

    4) that if the parties dont agree the reason for termination and you want to argue, that the matter goes to a mediator.

    etc etc etc.  

    Cant be fairer than that, its all reasonable and is not unheard of.

    Hope this helps.

    very first CS site sponsor.


    • #3
      Re: Employment question: sign-on bonuses

      I got a few sign-on bonuses when I left the bank Id worked at for 20 years.
      The new mob were basically taking over the IT Dept. so wanted all the existing staff.
      Their record of retaining new staff obtained in this way was quite high so maybe this influenced them but I dont recall any mention of paying anything back.
      Also though they were one of the largest companies on the planet so could afford a bob or two.

      Having said that, Attilios example looks very good to me and I imagine could be applied to any size organisation.

      As he said "Cant be fairer than that".


      • #4
        Re: Employment question: sign-on bonuses

        i would see if you can negoitate it to be a pro-rata sign on bonus.
        but it might be their normal procedure to be 100% paid back

        many companies have a relocation policy that is paid back pro rata if they move you to X destination and you quit within x period, but if they relocate / retrench you again or you transfer within the company that you dont pay it back.

        100% payback is asking a lot if they are paying you the sign on IMO... get it written into the contract whatever you do


        • #5
          Re: Employment question: sign-on bonuses

          Hello Buff. Ill preface this by stating that I have completed an Industrial Law subject as part of a post-grad degree in HR.

          Contracts of employment are fundamentally master/servant agreements. If ever a case arises for unlawful dismissal, or breach of contract, a Court will generally favour the employee,

          a) Because the employee wanted the job, but could not have it unless the employers contract is signed, and

          b) Because an employer is considered likely to have deeper pockets.

          Like it or lump it, thats the way it is. There are other reasons too, but not necessary to go into these here.

          I doubt that any court would enforce a clause described as you have, unless you are a particularly high-flyer on something like a $500k salary. I gather you are not in this range, otherwise you wouldnt be asking the question here, but directing it to your lawyer.


          • #6
            Re: Employment question: sign-on bonuses

            Thanks for the replies guys. I have taken everything on board and discussed with the prospective employer. I may well end up getting lawyer to look at contract, though.


            • #7
              Re: Employment question: sign-on bonuses

              Are you happy to share the reason for the sign on bonus?

              You cant be that good ;D


              • #8
                Re: Employment question: sign-on bonuses

                I am glad we at CosmoreX Coffee are a ***fair*** employer and ask newcomers to take our Letter of Offer home and discuss with wife and family in case there is anything in there that they would like to discuss further and / or change to suit both parties more fairly......

                But you are saying "contract".

                I was talking "Letter of Offer" which is basically a kind of appendix of specific terms and conditions relating to your exact position, and that fits in with the standard conditions that are contained in the pertinent Award, or Statutory Whatevers that apply to the industry or occupation you are going to work in.

                The minute you say "contract" or "employment contract" I agree you should see a solicitor.