Understanding employment contracts

A recent decision in the New South Wales Court of Appeal is a reminder for businesses throughout the country to ensure that bonus provisions in contracts of employment properly reflect the intent of both parties.

• It may now be considered breach of contract to not set performance criteria and not assess employee performance, when a contract states that you will do so.
• Making a bonus ‘discretionary’ will not excuse an employer from other obligations to consider how a bonus might be assessed.
• If a bonus is able to be withheld at the discretion of the employer, even if the performance objectives have been achieved, the contract must clearly state that as the case.

Posted on 10 August '11 by editor, under General News.