ABSTRACT
Variable remuneration makes up a significant element of pay in the financial services sector. Such remuneration may take the form of profit share, commission, formulaic or discretionary bonus, or other performance-related pay. The starting point for ascertaining the scope of an employee's right to bonus will be the express terms of the contract of employment. These may range from formulaic, express commission and bonus clauses, to terms couched in terms of the widest possible discretion. Clark v Nomura was the first successful freestanding claim for non-payment of a discretionary bonus during the course of employment. It has been argued that an employee's reasonable expectations as to bonus may be a relevant consideration in determining whether an employer has acted irrationally in exercising a contractual discretion. The decision of the Supreme Court in Braganza v BP Shipping Ltd ICR 449 raises the prospect of a wider range of implied terms being applied to the exercise of contractual discretion by employers.
