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Casual assurances can create expectations and may contribute to an argument that a bonus was contractually owed, depending on the wording used, the context and the employer’s general conduct. They are included in the employee’s gross taxable pay for the interval in which they are paid, not the period to which they might relate. Where a bonus scheme has been operated informally or inconsistently, employers should take recommendation earlier than making modifications or withholding funds, as the danger of inadvertently breaching implied terms or triggering claims is higher. For discretionary bonuses, employers have extra flexibility to amend or withdraw the scheme, however discretion must still be exercised fairly.
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