Bonuses - the Hidden Pitfalls

Employers commonly believe that they can forgo payment of a bonus by terminating the employment relationship before the payment due date, particularly where the employment contract makes payment conditional upon the employee remaining in service and not being under notice at that date. A recent High Court decision (in the case of Takacs v Barclays Services Jersey Limited) suggests that employees may be able to challenge a failure to pay bonuses in such circumstances.

Mr Takacs was employed as a trader whose contract entitled him to a minimum bonus award in the first two years of his employment, as well as an additional award for each of the two years if he achieved certain sales targets. He did not achieve the sales targets in either year and was dismissed.