But still a binding obligation, as Dresdner Bank found out in Attrill v Dresdner Kleinwort Ltd, [2012] EWHC 1189 (QB). In 2008, Dresdner was in the process of being sold by Allianz SE to Commerzbank AG. Many Dresdner employees felt uncertain about their future and left the bank, so to stem the tide of resignations Dr Jentzsch, the bank’s CEO, announced at a town-hall meeting in August 2008 that a ‘guaranteed’ minimum bonus pool of €400 million had been set aside for 2008, to be allocated on a discretionary basis according to individual performance (‘in the usual way’ and ‘no matter what’). In December, employees received written notice of their provisional bonus entitlements, which were said to be subject to a ‘material adverse change’ (MAC) clause. The sale to Commerzbank was completed in January 2009 and apparently new brooms sweep clean: Dr Jentzch was replaced, the MAC clause was invoked and the bonus pool reduced by 90% in response to public concerns about bankers’ bonuses.

The bankers fought back and won. Owen J found that the announcement of a specified bonus pool gave rise to a binding promise that was sufficiently certain as to its terms. The Dresdner employee handbook provided that unilateral changes to compensation terms affecting a group of employees had to be communicated over the bank’s intranet, but the town-hall meeting had been posted there, and in doing so the bank had effectively waived any requirement for employees to indicate their acceptance of the offer. Consideration was given in the form of the employees’ continued service to the bank in exchange for a bonus entitlement. The insertion of the MAC clause was a breach of the oral agreement to pay the full amounts conveyed in the December 2008 bonus letters (and possibly also a breach of a duty of implied trust and confidence under the bank’s contracts with its employees). Even if the MAC clause had been proper, the bank didn’t apply it correctly according to its terms. The bankers were entitled to the full amounts specified in the December 2008 bonus letters.

[Link available here].