If you decide to make your staff a Christmas bonus, make sure that the payment is discretionary and that it does not become part of the staff’s contract. If a payment is genuinely of a one – off nature, an employer has little to worry about; however, if the payment is made year after year or if, during the course of the year, an employer pays its staff regular one – off bonus payments, an employee could argue that they are contractual workplace custom and practice entitlements. The simple way to avoid this happening is to make it clear to staff that the payment being made is purely of a one – off nature. If a further one – off payment is then made in the future, it should again be made clear to staff that the payment that is being made is entirely discretionary and not contractually binding. In spite of this, it could be argued by staff that consistent “discretionary” bonus payments should be interpreted as a contractual entitlement. The way to prevent this happening is to not pay staff a discretionary bonus to employees in successive years.
If you require any employment advice or representation, whether you are an employer or employee, feel free to contact Alan Davidson for a consultation: 01756 692 869.