In a case reportedly decided by a Beijing court in January 2014, the
employer was ordered to pay the year-end bonus to an ex-employee.
The parties had entered into a year-end bonus agreement, which provided
for the target amount of the bonus and payment time. The ex-employee
separated from the employer without being paid the year-end bonus, and
then brought a claim for the bonus. The employer argued that the yearend
bonus was not a guaranteed payment, but rather dependent on the
company’s business performance, and that its business performance was
poor. Therefore it decided to not pay any bonus to the employee. The
court was not convinced by this argument and ordered the employer to pay
the year-end bonus to the ex-employee.
The judge pointed out that a bonus is a part of the employee’s expected
compensation. He therefore reasoned that it would be unfair for a
company to unilaterally decide whether or not to pay such bonus, even in
the case of “discretionary” bonuses.
