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Bonus schemes

Bonus schemes or arrangements usually fall into one of the following five categories.Employers need to be very careful on the application of these. In all cases you should state that bonus payments made in any year will not imply that payments will be made in future years.

  • No mention of bonus in the employment contract, but the employer has paid bonuses in the past - if a bonus is paid habitually and there is little ambiguity as to the amounts to which employees are entitled, a contractual entitlement to a bonus may arise. Employers should therefore ensure that habitual payments are clearly stated to be discretionary and that no contractual obligation is intended.

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