Not all compensation is the result of an unfair dismissal claim. You may have an employment law claim for a bonus without a dismissal. If you do have an unfair dismissal claim or a wrongful dismissal claim then your bonus or commission payment may be a vital part of the compensation you are seeking.
Bonus schemes are popular with employers. A bonus system can be effective in motivating employees and a useful tool in rewarding and retaining top performing employees. However, they are also a rich source of employment law disputes, both in unfair dismissal, wrongful dismissal, discrimination and contract claims.
For quite some time, many employers have looked to make bonuses discretionary - a bonus system is used to motivate and reward employees but one that is entirely at the employer's discretion. Where an employer has a bonus scheme with open rules, or entitlement to a bonus is set out in the contract, it is easy for the Court to include the bonus in any award made to the employee, provided that the employee would have been employed at the time the bonus vested, if he or she had not been wrongfully dismissed.
The more difficult question has always been where the bonus is expressly stated to be discretionary and there are no fixed rules as to how it is determined. Unsurprisingly, this dilemma has produced a flood of case law. Effectively the Courts have now concluded that a discretionary bonus can only be determined at the employer's discretion to the extent that the employer's decision is bona fide and rational. This is the case even if the decision whether to pay a bonus at all is discretionary. If the employer decides not to pay that ‘discretionary' bonus and that decision is not rational or bona fide then the Court must make its own rational judgment as to whether the employee would have been paid and a bonus and how much that bonus would have been.