Spencer is able to advise employees and employers in high-value bonus disputes. Bonus claims are governed by contract law. Spencer can advise you on the terms of the bonus scheme and any executive contracts.
Types of Bonus
Bonuses normally fall into one of three types
- Non-contractual, discretionary bonusesNon-contractual, discretionary bonuses give the employer the broadest discretion possible when awarding bonuses. It can be difficult for an employee to challenge a bonus award made under this type of scheme. It is common for employees to argue that, despite appearances, the scheme is in fact a contractual one or that the employer has discriminated against him/her in its distribution of the bonus.
- Contractual, discretionary bonusesDisputes involving contractual discretionary bonuses arise where the employee has a contractual right to be considered for a bonus. Whether or not a bonus is awarded and the amount of the bonus can depend on the exercise of the contractual discretion. The terms of the contract will determine how broad or narrow that discretion is and how it might be challenged.Even if a bonus is described as being payable entirely at the discretion of the employer a court will often expect an employer to exercise that discretion in a rational way. Where an employer’s decision to refuse a bonus is arbitrary or capricious courts have sometimes been willing to intervene.
- Contractual bonusThese are normally known as guaranteed bonuses. If a bonus is a guaranteed bonus then the employee would normally receive a bonus each year. The contract usually sets out how much the employee should receive and what conditions must be met before an employee will receive the bonus. For instance, it is common for the employer to require that, in order to receive the bonus, the employee must still in employment.
Bonus Disputes and Claims
Whether the bonus is guaranteed or discretionary the starting point for considering any bonus claim is a careful and thorough review of the contractual terms. It is important to get expert advice from a lawyer quickly. You can increase your chances of avoiding litigation by identifying the strengths and weaknesses of your case at an early stage and using that knowledge in negotiations. Spencer can help you avoid legal proceedings by negotiating with the other party or engaging in alternative forms of dispute resolution such as mediation. If court is unavoidable Spencer can help you deal with the litigation robustly. As a barrister, Spencer can use his practical knowledge of court proceedings to give you pragmatic and realistic advice.