Bonus Claims - Evolving Court Practice

Although performance-based compensation has long been an integral part of Hungarian employment law, neither the Labour Code nor the relevant commentaries provide a clear-cut definition of a 'bonus'. As a result, the definition and key legal principles governing bonuses have been developed by court practice. This update examines some notable decisions that illustrate the development of this practice. To better understand the developments, it will first consider the definition of a 'bonus' in court practice.

Definition of 'bonus'

The Labour Code's definition of 'wages' is broad. It includes any remuneration – provided directly or indirectly, in cash or otherwise – based on an employment relationship. This definition draws on international treaties, such as International Labour Organisation Convention 95 concerning the Protection of Wages and Section 157 of the Treaty on the Functioning of the European Union. These treaties define wages in the context of the equal