RECLAIMING MOTION IN THE CAUSE OF GAVIN LOUDON AGAINST STEWART MILNE GROUP LIMIITED [2022] ScotCS CSIH_3_2 (18 February 2022)

RECLAIMING MOTION IN THE CAUSE OF GAVIN LOUDON AGAINST STEWART MILNE GROUP LIMIITED [2022] ScotCS CSIH_3_2 (18 February 2022)

The employee's entitlement to bonuses under the contract was earned by identifying and introducing sites before termination, even if the payment event (planning permission or acquisition) occurred after termination. The good leaver clause was intended to confer a substantive benefit beyond common law, ensuring that bonuses for work done before termination remained payable if the relevant conditions were later satisfied. The commercial judge was correct to distinguish between earning and payment of bonuses, and the employer remained liable to pay bonuses on the agreed timescale for qualifying sites.

Citation
[2022] ScotCS CSIH_3_2
Parties
Pursuer and Respondent: Gavin Loudon; Defenders and Reclaimers: Stewart Milne Group Limited
Jurisdiction
Scotland
Judgment Date
18 February 2022
Procedural Posture
Reclaiming Motion (appeal) in Civil Employment Contract Dispute / Inner House, Court of Session (appellate Decision)
Outcome
Reclaiming motion refused; commercial judge's decision affirmed.
Legal Topics
Bonus Entitlement, Interpretation of Employment Contracts, Accrued Rights on Termination, Good Leaver Provisions
Employment Law Contract Law Bonus Entitlement Interpretation of Employment Contracts Accrued Rights on Termination Good Leaver Provisions

Case Brief

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Parties

Gavin Loudon

Pursuer and Respondent

Stewart Milne Group Limited

Defenders and Reclaimers

Procedural Posture

Reclaiming Motion (appeal) in Civil Employment Contract Dispute / Inner House, Court of Session (appellate Decision)

Legal Issues

  1. 1 Whether the employee was entitled to be paid bonuses after his employment contract ended by agreed redundancy (good leaver)
  2. 2 Proper interpretation of the bonus provisions in the employment contract, specifically the distinction between when a bonus is 'earned' and when it is 'payable'
  3. 3 Whether the entitlement to bonuses survives termination of employment by agreement

Ratio Decidendi

The employee's entitlement to bonuses under the contract was earned by identifying and introducing sites before termination, even if the payment event (planning permission or acquisition) occurred after termination. The good leaver clause was intended to confer a substantive benefit beyond common law, ensuring that bonuses for work done before termination remained payable if the relevant conditions were later satisfied. The commercial judge was correct to distinguish between earning and payment of bonuses, and the employer remained liable to pay bonuses on the agreed timescale for qualifying sites.

Court Disposition

Reclaiming motion refused; commercial judge's decision affirmed.

Orders

  • Declarator that the respondent is entitled to bonuses for sites identified and introduced before termination, payable if and when the contractual conditions are satisfied.
  • Declarator that the respondent is entitled to a bonus of 13.5% of management fees paid to the employer for the Robroyston project, including fees paid after termination.