Executive loses fight for bonus

MATT NIPPERT
Last updated 16:16 23/07/2014

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A former Huawei executive has discovered discretionary bonuses are just that, after failing in a bid to claim a $75,000 bonus.

Joseph McDaid claimed his terms of employment with Huawei had been misrepresented in 2010 when he was negotiating to join the Chinese technology giant and he should be compensated and awarded damages.

Employment Relations Authority (ERA) member James Crichton called McDaid's claims "inconsistent" and dismissed them in their entirety.

The authority heard McDaid had been offered a base salary of $220,000, a sales incentive plan amounting to $94,000 a year, $4800 in transportation allowance to relocate to Auckland from Melbourne, and an annual bonus that could amount to four months salary.

The overall package offered to McDaid was said to be equivalent to $380,000 a year.

In 2011 Huawei elected not to award bonuses as sales were below expectations and McDaid complained he had been promised a bonus during negotiations.

McDaid claimed his superior had threatened his continued employment if he persisted in trying to claim the bonus, a claim Huawei denied.

Huawei said the bonus was clearly labelled as a "discretionary benefit" in McDaid's employment agreement and they were under no obligation to pay it.

McDaid also claimed his sales incentive plan allowance had been unfairly removed when the company changed policy and sought to remove the payments from employment agreements.

The ERA heard McDaid had accepted a payment of $69,567 in return for the sales incentive payments being stopped.

The ERA said it could not believe McDaid did not understand the terms of his employment agreement.

"It cannot seriously be contended that a senior commercial manager with special expertise in a particular industry would not understand that the concept of a 'discretionary bonus' imported the idea that a discretion vested in the employer to pay or not pay and if to pay, what level payment was to be made," the decision said.

Crichton said other claims by McDaid, that his employment relationship changed significantly after the bonus dispute as he was fearful for his job, were "simply incredible".

"I have not found Mr McDaid very believable," Crichton said.

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