CONTRACTUAL BONUS DISPUTE LETTER
Important legal-advice, jurisdiction and formality warning
This fictional letter is a worked example, not legal advice, a tribunal claim, or a universal demand for payment. It is written for an employee and employer in England and Wales. Whether a bonus is contractual, discretionary or subject to implied duties depends on the employment contract, scheme rules, communications, objectives, employer conduct and facts. Check the contract, any collective or bonus plan, the Equality Act 2010, unlawful-deduction rules, tax treatment, ACAS guidance and the applicable limitation route. This letter does not extend a tribunal deadline or replace ACAS early conciliation where required. Preserve documents, avoid exaggerating the claim, and obtain independent advice before sending or relying on it. All details below are fictional.
By email and recorded delivery
From: Oliver James Penrose 31 Alderbrook Road, Cambridge CB4 2NX oliver.penrose@example.test Telephone: 01223 555 1846
To: The Managing Director and People Team Silveroak Data Analytics Limited Company number 12960418 55 Station Approach, Cambridge CB1 2JD people@silveroak.example.test
Date: 9 December 2026 Subject: unpaid contractual performance bonus for year ended 30 September 2026
Dear Managing Director and People Team,
I am writing to dispute Silveroak's decision not to pay my contractual performance bonus for the financial year ending 30 September 2026. I have worked for Silveroak as a Principal Client Manager since 12 April 2021. My base salary during the relevant year was £72,000 gross per annum. My employment contract dated 12 April 2021, as varied by the compensation letter dated 3 October 2025, provides for a target annual bonus of 12 per cent of base salary, subject to the written objectives and payment terms in the Silveroak Performance Plan.
1. Contract and agreed calculation
The compensation letter states that the bonus is earned by reference to individual and company performance, with 60 per cent of the opportunity determined by individual objectives and 40 per cent by company adjusted operating profit. It states that payment is due in the December payroll following the year end, subject to confirmation of results, and that an employee who remains employed and is not serving notice on the payment date is eligible for a bonus earned in the completed year. It does not say that the employer may withhold an earned amount merely because it prefers a different commercial allocation.
My written objectives, agreed with Helen Sloane, Commercial Director, on 15 October 2025 were: retain the Marlowe Health account at 20 points, deliver £1,200,000 of new recurring revenue at 20 points, achieve client satisfaction of at least 90 per cent at 10 points, and complete the strategic-account review programme at 10 points. Each objective was measurable and together accounted for the 60 individual-performance points.
The target bonus calculation is transparent. £72,000 multiplied by 12 per cent equals £8,640 at 100 per cent achievement. My individual score is 60 out of 60 points and the company score is 34 out of 40 points, giving total achievement of 94 out of 100 points. The resulting gross bonus is therefore £8,640 multiplied by 94 per cent, which equals £8,121.60. I understand that PAYE and National Insurance will be deducted from any payment. I am claiming the gross contractual sum, not a net estimate.
2. Performance evidence
The Marlowe Health account renewed on 28 February 2026 with an additional two-year support package, meeting the retention objective and producing 20 of 20 points. New recurring revenue recorded in the CRM at 30 September was £1,318,400, meeting the threshold for the full 20 points. The independent client survey issued on 6 October gave a weighted satisfaction result of 93 per cent, meeting the 10-point objective and producing 10 of 10 points. I delivered the strategic-account reviews for all 14 named accounts by 23 September, and Helen Sloane confirmed completion in her email of 25 September, producing 10 of 10 points.
The company finance presentation to the board on 20 November 2026 recorded adjusted operating profit of £2,550,000 against the plan threshold of £2,400,000. The plan's company table gives 34 of 40 points for that result. I have retained the objective sheet, CRM export, customer survey, the 25 September confirmation, the finance presentation circulated to senior managers and my performance review dated 14 October 2026, which rated my performance as “exceeds expectations”.
I was paid my normal September salary and remained employed without notice on the December payroll date of 1 December 2026. On 2 December, Ruth Calder, People Director, told me by telephone that no bonus would be paid because the board had decided to reserve cash for a proposed acquisition. Her email of 3 December described the bonus as “discretionary despite the target language”. No calculation, policy amendment or performance criticism was provided. The acquisition budget is a separate business decision and does not alter the completed objectives or the payment wording.
3. Dispute and requested resolution
I dispute the assertion that the bonus was wholly discretionary. If Silveroak relies on a discretion in another document, please identify the exact clause, provide the version in force on 30 September 2026, explain how the discretion was exercised, and identify the criteria applied to my award. I also ask the company to preserve board papers, bonus-calculation files, objective approvals, finance results, payroll records and communications concerning my bonus and comparable employees.
I request payment of £8,121.60 gross, less lawful deductions, in the next available payroll or by bank transfer no later than 23 December 2026. Please provide a written calculation, payslip and confirmation of the payment date. I am willing to meet Ruth Calder and Helen Sloane on 16 December to resolve any genuine factual issue. I would also consider a written agreement recording payment and any agreed treatment of confidential information, provided it does not waive rights without independent advice.
For clarity, I have not resigned, I am not serving notice, and I have continued to perform my role. I reserve the right to seek interest or any other remedy available under the contract and law, subject to the proper forum and limits. I do not presently claim compensation for distress or tax differences, and I will update the figure if the company identifies a contractual adjustment supported by the plan.
4. Proposed next steps
Please acknowledge this letter by 12 December 2026 and provide a substantive response by 23 December 2026. If the company maintains its refusal, please give the reasons, documents relied on and the name of the decision-maker. I am willing to use the internal grievance procedure without treating that step as an extension of any statutory time limit. I will take advice about ACAS early conciliation and the appropriate tribunal or court route if the dispute is not resolved.
Nothing in this letter is an admission about matters not expressly stated, and I reserve all contractual and statutory rights. I ask that correspondence is sent to my address or email above and that personal payroll information is handled securely.
Yours faithfully,
Oliver James Penrose
Signature: ____________________ Date: 9 December 2026
Enclosures retained by sender
1. Employment contract dated 12 April 2021. 2. Compensation letter dated 3 October 2025. 3. Objectives agreed on 15 October 2025. 4. Performance review dated 14 October 2026. 5. CRM and client-survey evidence dated 6 October 2026. 6. Email from Ruth Calder dated 3 December 2026.
This list records the documents relied on in this worked example; it is not a substitute for checking the complete evidence or the employer's disclosure obligations.