Employers who attempt to dress up what is intended to be a purely discretionary bonus in the language of entitlement are likely to be caught out, as the reservation of discretion must be absolutely clear.

A bonus scheme set out a formula applicable to a 2008 bonus, but went on to reserve the right to change the formula-linked bonus arrangement "at any time". The Court of Appeal ruled that this wording simply allowed the employer to use a different formula in future years, not to change the formula set for 2008.

The employer had also sought to change the employee's terms and conditions, including to remove the bonus, and had asked the employee to sign to indicate his acceptance. Because the change had no immediate impact on the employee (save for reporting to a different superior, held to be a "trivial" change), and the employee had not signed as requested, there was nothing to suggest that his continued work amounted to an acceptance.

This highlights the importance of following up a response from the employee where they have been asked to agree changes to terms. (Khatri v Cooperatieve Centrale Raiffeisen-Boerenleenbank BA, CA)