In Commerzbank AG v Keen  IRLR 132 CA the Court of Appeal held that an employer did not act in breach of the implied terms of a contract of employment in awarding to a highly paid employee lower bonuses than those recommended by his manager. Further, the terms of employment contracts are not covered by the provisions of the Unfair Contract Terms Act 1977.
This article looks at some of the significant judgments in the area of equal pay over the past year and their implications.
In Commerzbank AG v Keen  IRLR 132 CA, the Court of Appeal has held that, in order to show that an employer has breached a discretionary bonus term, the employee must demonstrate that the employer exercised its discretion irrationally or perversely.
In Hoyland v Asda Stores Ltd  All ER (D) 133 CS, the Court of Session holds that despite being described as "discretionary" a bonus scheme was "regulated" by the employee's contract of employment and therefore fell outside the scope of the Sex Discrimination Act 1975.
In Cheshire and Wirral Partnership NHS Trust v Abbott and others  IRLR 546 CA, the Court of Appeal in an equal pay case has held that, in choosing a group of employees to act as comparators in a claim of indirect sex discrimination, the whole advantaged group should be chosen where possible and a section of the advantaged group should not be arbitrarily excluded.
A model contract clause on production-based bonus payments.
In Abbott and others v Cheshire and Wirral Partnership NHS Trust  All ER (D) 140 (Jan) EAT, the Employment Appeal Tribunal has held that an employment tribunal in an equal pay claim failed to consider the balance between the discriminatory effect of not paying bonuses to a group of employees and the objective justification for that decision.
HR and legal information and guidance relating to employee incentives.