A discretionary bonus is a form of bonus payment that an employer may choose to pay to an employee, but is not contractually obligated to do so. Discretionary bonuses are often used to reward outstanding performance or achievement, and are typically awarded at the discretion of the employer.
The question of whether a discretionary bonus is contractual or not is an important one, as it can have significant implications for both employers and employees. In general, the answer to this question depends on the specific terms of the employment contract, as well as the specific circumstances surrounding the bonus payment.
If the employment contract specifically states that bonuses are discretionary and non-contractual, then the employer is under no obligation to pay a bonus, even if the employee has performed exceptionally well. However, if the contract states that bonuses are guaranteed or that they will be paid in certain circumstances, then the bonus may be considered contractual and the employer may be legally obligated to pay it.
In some cases, the question of whether a bonus is contractual may also be influenced by the policies and practices of the employer. For example, if an employer consistently gives bonuses to employees who meet certain performance criteria or achieve specific goals, then this may create an expectation that bonuses will be awarded in the future, even if the employment contract is silent on the matter.
It is also important to note that even if a bonus is considered discretionary and non-contractual, there are still legal requirements that must be followed when awarding or withholding bonuses. Employers must ensure that bonuses are awarded fairly and impartially, and cannot discriminate on the basis of race, gender, age, or other protected characteristics.
In conclusion, the question of whether a discretionary bonus is contractual depends on a number of factors, including the specific terms of the employment contract, the policies and practices of the employer, and the specific circumstances surrounding the bonus payment. Employers and employees should carefully review the terms of their employment contract and seek legal advice if necessary, to ensure that they fully understand their rights and obligations with respect to bonus payments.