They will analyse the nature of the bonus and the circumstances around it. Factors which may be taken into account when considering whether a bonus scheme is discretionary or contractual will be the wording used. Other relevant factors include the frequency of any such payments and the basis on which they are made. For instance, this may be the case if an employer pays a Christmas bonus over a number of years.
Although the contract does not say this and the employer has never sat down with the employee to specifically agree to it, it can form part of the contract. Finally, employers need to take great care that when they are exercising their discretion — they must not do anything that could amount to discrimination. They can give you tailored advice aligned to your business interests.
About us. Call us on Contact us. Types of bonus Broadly, bonuses can be contractual or discretionary in nature. What to look out for Courts and tribunals are not concerned about labels. In general, this will be the case where the practice is clear and certain is fair and reasonable has been going on for a long period of time the law does not set out a specific length of time is known to employees and they have a reasonable expectation of receiving it has been consistently applied to employees.
Latest news and insights. View the latest articles. Things that might change include:. Your employer might need to make a change to correct a mistake that was made in drawing up the contract. Depending on the situation, it might be in your best interests to allow the mistake to be corrected. In some circumstances action like a demotion or a pay cut might be authorised as a disciplinary measure. Check the disciplinary procedure to be sure. Agreed changes don't necessarily have to be in writing, but if they alter the terms explained in your 'written statement of employment particulars' then your employer must give you a written statement that shows what has changed.
This must take place within a month of the change. Your contract may include what are known as 'flexibility clauses', which gives your employer the right to change certain conditions for example, shift patterns, or a 'mobility clause' which allows changes to your job location. A flexibility clause that is vaguely worded for example: 'the employer reserves the right to change terms from time to time', cannot be used to bring in completely unreasonable changes.
This is because there's an 'implied term of mutual trust and confidence' in all contracts that requires the employer not to act completely unreasonably. You can't insist on making changes unless they're covered by a legal right, for example, opting out of Sunday working or the hour week.
You might be able to apply to change your hours under flexible working rights. If your employer wants to make changes to your contract, they should consult you or your representative for example, a trade union official , explain the reasons and listen to alternative ideas. Changes can be agreed directly between you and your employer, or through what is known as a 'collective agreement' between your employer and a trade union.
This might be allowed by your contract even if you're not a union member. If you don't agree, your employer is not allowed to just bring in a change.
However, they can terminate your contract by giving notice and offer you a new one including the revised terms - effectively sacking you and taking you back on. Your employer would be expected to follow a statutory minimum dismissal procedure. They may have to follow a collective redundancy consultation process if they plan to do this to a group of employees.
If you don't accept the new contract - or if you've accepted the new one but feel there was no good reason for ending the old one - you have the right to make an unfair dismissal claim provided you've at least one year's continuous service with your employer. You may also be able to claim redundancy if you have at least two years service. If there is a sound business reason for the change, and your employer has properly consulted you and looked into any alternatives, you could find it difficult to win your claim.
Your employer isn't entitled to simply bring in any change they wish. If your employer tries to make a change that you don't agree with for example trying to demote you or cut your pay , tell them immediately.
Put your objections in writing, asking for reasons for the change and explaining why you don't agree. Cancel Sign In. Please purchase a SHRM membership before saving bookmarks. OK Join. An error has occurred. From Email. To Email. Message Hi, I thought you'd like this article I found on the SHRM website: What is the difference between a discretionary and a nondiscretionary bonus? Send Cancel Close. Post a Job See All Jobs. Salary Increase Projections for Pay raises in the U.
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