An employee may be able to bring a deduction of wages claim for non-payment of bonus, even if elements of the bonus appear to be discretionary.

Wages claims in the employment tribunal may be more advantageous then bringing a breach of contract claim in the courts (where the costs regime is more onerous) or in the employment tribunal (where the employment must have ended and there is a £25,000 cap on compensation). An employer can also counterclaim against contract claims in either forum, but not against wages claims. Compensation tribunal claims can be adjusted by up to 50% for breach of the statutory grievance procedure or, from April 2009, by up to 25% for unreasonable breach of the new Acas code on discipline and grievances.

A wages claim is possible if the amount of the bonus is sufficiently quantifiable. In a recent case the employer fixed a bonus pool using an agreed contractual formula. An employee's contract allowed him to determine his own share of the pool subject to consultation with the CEO, whose decision was final. However, in reality the CEO had never been involved and the employee had absolute discretion to decide his own share. Once he had done this, he could bring a wages claim contesting the calculation of the amount of the total pool. The fact that the employer had a discretion how to pay the bonus (in cash or into some scheme or trust) made no difference. (Tradition Securities and Futures SA v Mouradian, CA)

From this April tribunals will have a wider discretion to award compensation for additional and consequential loss caused by the employer's unlawful deduction (eg, bank charges or interest).