Calculation of bonuses on termination checklist

Published on: 06/02/2015

Checklist to follow when calculating bonuses on termination.
 
A court will consider all the terms of the bonus scheme and the surrounding circumstances. Relevant issues may include the following:
  1. Is the scheme stated to be contractual or discretionary? Is the language used consistent on this point? If there is discretion, does this apply to the scheme itself, or merely to the level of bonus?
  2. In a discretionary scheme, what has been the past practice in relation to bonuses? Is there any argument that the employee has a reasonable expectation of a specific amount based on previous years?
  3. Does the employee have to meet certain conditions?