Updated to include information on Hills v Niksun Inc, concerning the burden of proof in establishing if contractual discretion was exercised reasonably.
David Malamatenios is a partner at Colman Coyle Solicitors. He rounds up the latest rulings.
Definition from the XpertHR glossary.
In Small and others v Boots Co and another  All ER (D) 200 (Jan) EAT, the EAT held that the fact that the employer had stated that a bonus was discretionary did not necessarily mean that it had no contractual effect. The employer's discretion could relate to: whether or not to operate a bonus system at all; whether or not to award a bonus in a given year; or the amount of bonus to be awarded.
This week's case of the week, provided by Thomas Eggar, covers discretionary bonuses.
A contractual discretion whether or not to award an equity trader any, and if so what, bonus, which was "dependent upon individual performance", was one that had to be exercised both by reference to an assessment of performance of the trader's contract and not irrationally or perversely, holds the High Court in Clark v Nomura International plc.
HR and legal information and guidance relating to discretionary contractual terms.