An employer announced that it intends to grant a bonus to employees for past achievements in two installments. The employer refused to grant the second half of the bonus to an employee who announced her resignation, because she would no longer be deemed an employee on the date of the second payment.
The Court rejected the employee's claim to receive the balance of the bonus because the grant of a bonus is part of the employer's prerogative to manage its business and there is no justification for interfering with it. The principle decision whether to pay a bonus is at the discretion of the employer. The true essence of the bonus is to provide an incentive to the employees, looking towards the future. Here, there was no provision in the employment agreement that obligates the employer to pay a bonus, even more so after the termination of the employment relationship. The discretion given to the employer also includes the possibility that the bonus will be paid, in whole or in part, only to employees employed by the employer or in installments. Therefore, there is no justification for intervening with the employer's prerogative and its decision not to grant the employee the balance of the bonus after her employment terminated.