Bonus Claims revisited
News that 79 bankers are suing Dresdner for unpaid bonuses after the take-over by Commerzbank, as well as the recent G20 summit on bankers’ remuneration, brings the law on discretionary bonuses back into the public eye. It is alleged the promised bonuses were cut by 90%. Further claims are expected.
But when can you sue for a bonus which is said to be entirely payable at your employer’s discretion? Such claims are certainly possible in some cases, effectively based on “trust” principles such as acting in good faith, not arbitrarily or capriciously, and only taking relevant considerations into account.
What does that mean? If your contract says you are entitled to a bonus based on your performance, the bank must consider your performance properly when deciding what to award. If the bank awards you zero, although you had a stellar year, it would have to justify its decision to the Court. If the only reason you got zero was, say, because they planned to make you redundant, this would be a breach of contract.
It has been reported in the press that Commerzbank have been granted an extension of time for filing their Defence to the proceedings.
We have advised in numerous bonus cases over the last year and if you would like any advice on your own position, please call either Dale Langley or Michael Scutt on 0207 464 8433 for a preliminary discussion or email This e-mail address is being protected from spambots. You need JavaScript enabled to view it or This e-mail address is being protected from spambots. You need JavaScript enabled to view it