An employee is not precluded from recovering a discretionary bonus in court where he or she can demonstrate that the employer is in breach of its obligations, or where an employee successfully seeks damages for loss of opportunity.
“I am satisfied that the proper construction of the Employment Contract is that although the relevant polices may not have general application as contractual terms, they do for the specific purpose of determining (the employee’s) termination entitlements on redundancy,” Federal Circuit Court Judge Lloyd-Jones ruled.
Accordingly, notwithstanding that a bonus may on its face be entirely discretionary, an employer cannot hide behind that discretion if it fails to follow its own policies and practices which if adhered to would, objectively, have entitled the employee to the bonus on merit
Although the judge recognized that the employee’s contract expressly excluded policies being included in it as terms and conditions the judge did uphold the employee’s argument that the contract specified that if the manager’s employment was terminated due to redundancy, then his entitlements would be calculated in accordance with bank policies.
Russo v Westpac Banking Corporation (2015) FCCA 1086 delivered on12 May 2015.