Phil Jacklin v Planit Software Testing Limited [2026] NZERA 264

This determination is a contract interpretation case that spilled into a Personal Grievance (PG) claim. A senior manager believed a short term incentive (STI) clause guaranteed 25% of salary, paid quarterly, and required KPIs to be provided by the first day of the financial year. The Authority rejected that reading, so the constructive dismissal claim failed. But the Authority still found a breach of the "KPIs and eligible amounts will be set at the beginning of each Financial Year" obligation, and awarded compensation for unjustified disadvantage. The full determination is embedded at the end of this page.

The contract clause at the centre of the dispute

Mr Jacklin's employment agreement included this short term incentive clause:

6.2 In addition, you are eligible to receive an annual short term incentive bonus of up to 25% of your annual salary. KPIs and eligible amounts will be set for you at the beginning of each Financial Year. All bonuses and incentives are at the absolute discretion of the Chief Operating Officer or Chief Executive Officer.

Mr Jacklin's case depended on reading clause 6.2 as creating a contractual entitlement to a 25% bonus (or commission-like payment), and that it would be calculated and paid quarterly. Planit said clause 6.2 created eligibility only, with payment discretionary, up to 25% (not a guaranteed 25%), and that (for general managers) STIs were annual.

What happened

Recruitment, expectations, and the missing KPI plan

Planit offered the role in early November 2023. Mr Jacklin said the salary was set to match his previous remuneration and that he expected an additional 25% STI. Timing of STI payments was not discussed at recruitment, but he assumed quarterly payments because that was his industry experience.

Mr Jacklin signed the agreement on 9 November 2023. Planit was undergoing an international restructure, and KPIs and eligible amounts were not set at the start of his employment. The financial year (as understood in this case) began on 1 April, and Mr Jacklin wanted KPI/eligible amount information by then.

April to June 2024: escalating requests

On 8 April 2024 Mr Jacklin emailed the executive general manager (Mr Sethi) asking about incentive plans for general managers for FY25. He said he received no response until a meeting later in April where he was told it was still with the chief revenue officer (Mr Bargent).

On 24 May 2024, with Q1 nearly complete, Mr Jacklin emailed Mr Bargent and Mr Sethi stating he was "miffed" there was still no commission plan, and asserted an assumption: if he hit budget, he expected 100% attainment for the quarter, calculated and paid quarterly. He said he had achieved 103% of his revenue target for the quarter and viewed the STI as part of his contractual remuneration.

Planit's position was that STIs for general managers were annual and discretionary. Mr Jacklin said he was surprised by the annual-payment explanation and did not accept that a short term incentive could be annual.

August 2024: HR involvement and ongoing delay

By August 2024, Mr Jacklin contacted the Head of People Australasia (Ms Brbich). He said he needed clarity because only a revenue target had been provided, and he considered it unfair to define requirements later to his detriment. He asked for payment of a quarter of the bonus for Q1 achievements.

The dispute remained unresolved through September 2024. Mr Jacklin took preplanned leave and returned on 24 September 2024 to find no substantive resolution. Two days later, on 26 September 2024, he resigned effective immediately, stating Planit had materially breached his employment contract.

The claims and what Mr Jacklin sought

Mr Jacklin framed the resignation as a constructive dismissal caused by Planit's contractual breaches. He sought, among other remedies:

• Lost wages from the date of constructive dismissal to the determination date.
• Damages/compensation for hurt, humiliation, and injury to feelings (including a separate sum he claimed for dismissal impact).
• A Q1 incentive payment claim (he quantified this at $19,720, being one quarter of 25% of base salary for April to June 2024).
• Penalties for breach and for alleged breach of good faith.

Planit denied there was any constructive dismissal or unjustified disadvantage and said no contractual breach had occurred.

Why the constructive dismissal claim failed

The Authority applied the established constructive dismissal framework (including the "breach of duty leading to resignation" category). The core question was whether Planit breached a duty in a way that caused the resignation, and whether the breach was serious enough that resignation was a reasonably foreseeable consequence.

The Authority held the constructive dismissal claim failed because Mr Jacklin's resignation was driven by an incorrect reading of clause 6.2. On a plain reading:

• The STI was discretionary, not guaranteed.
• The clause said "up to" 25%, not a fixed 25% entitlement.
• The STI was described as annual, not quarterly.

Because there was no contractual entitlement to the quarterly 25% payment Mr Jacklin believed he was owed, Planit was not in breach in the way alleged. The Authority therefore found the resignation was not a dismissal and the constructive dismissal claim was unsuccessful.

Unjustified disadvantage: KPI and eligible amount information

Although the bonus payment theory failed, the Authority treated the KPI/eligible amount obligation as a distinct contractual commitment: "KPIs and eligible amounts will be set ... at the beginning of each Financial Year."

Planit argued there was flexibility in timing, and that global restructuring and budget uncertainty delayed setting KPIs across the business. The Authority accepted there were real reasons for delay and that, as a general manager, Mr Jacklin would have understood some of that context. But the Authority held Planit still had to comply with the clause, or at least make sure Mr Jacklin was clearly informed why it could not comply and what that meant for him.

The Authority found Planit could have done more to communicate the problem, provide clarity, and reduce uncertainty. Even on a liberal interpretation of "beginning of the financial year", Planit had not set KPIs and eligible amounts by the time Mr Jacklin resigned in late September. That failure was held to be a breach of an express term that disadvantaged him in his employment.

Remedies and orders

The Authority awarded compensation for the disadvantage, assessed as hurt, humiliation, and injury to feelings arising from the uncertainty and the handling of the KPI/eligible amount obligation. It declined to award a penalty because the negative effect was already addressed by compensation.

Practical takeaways

• Eligibility is not entitlement: clauses framed as "eligible" and "up to" with "absolute discretion" are difficult to convert into guaranteed payments.
• Define the incentive mechanics early: if KPIs and eligible amounts are promised "at the beginning" of a financial year, employers should set them promptly or clearly explain any delay and its practical consequences.
• Separate issues can produce different outcomes: a worker may lose a constructive dismissal claim but still succeed on an unjustified disadvantage claim tied to a contractual/process breach.
• Penalties are not automatic: the Authority may decline penalties where compensation already addresses the impact and a penalty would be disproportionate.

Read the full ERA determination (embedded)

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Source: Employment Relations Authority determination hosted on determinations.era.govt.nz.