A recent decision in the New South Wales Court of Appeal is a reminder for businesses throughout the country to ensure that bonus provisions in contracts of employment properly reflect the intent of both parties.
- It may now be considered breach of contract to not set performance criteria and not assess employee performance, when a contract states that you will do so.
- Making a bonus ‘discretionary’ will not excuse an employer from other obligations to consider how a bonus might be assessed.
- If a bonus is able to be withheld at the discretion of the employer, even if the performance objectives have been achieved, the contract must clearly state that as the case.
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