Bonus, gratification, year-end bonus... The names used by the parties are diverse and sometimes erroneous. Depending on the circumstances, the bonus will be described as a gratification or variable salary, without the terms used by the parties being decisive. The right to payment of the bonus and the consequences of a termination of the employment contract will depend on the qualification of the bonus.
The gratification, by definition, depends at least partly on the goodwill of the employer. It is a gratification when the employer is free to decide on the payment and the amount of the bonus. The employee has no right to such a payment.
A bonus is considered to be a gratification if it is promised in principle but the amount depends on the employer's discretion. The employer is obliged to pay such a bonus but has some leeway as to its amount.
The bonus becomes part of the salary when the parties have agreed on the principle of payment and its amount is determined in advance or depends on predetermined objective criteria.
The difference between discretionary bonus and salary is of great importance. When the bonus is considered as salary, it must be taken into account in the payment of overtime or when the employee requests an advance. It is also due in the event of termination of the employment relationship or release from the obligation to work.
Loss of discretionary character
A gratification may become part of the salary if the employer pays it for several years without reservation or if he pays it systematically, even though he had good reasons not to do so in certain years.
When granting the bonus, the employer may not treat employees of the opposite sex differently, without objective reasons. Nor may an employee be put at a disadvantage compared to a large number of colleagues without good reason.
The bonus is a special payment granted on certain occasions. It must be of secondary importance in the employee's remuneration. A very large amount compared to the annual salary may be reclassified as salary, even if the employer has expressed reservations about its optional nature.
On the other hand, when the employee receives a very high salary, contractual freedom prevails. The bonus will remain optional, even if the amount is very high in comparison to the salary.
Burn-out is a feeling of professional exhaustion. The employee feels that he/she can no longer cope with his/her obligations and responsibilities. When the race for bonuses is too strong and the employer's demands are too high, the risk of burn-out is very real. The employer is obliged to prevent this type of situation.
Termination of the employment relationship
If the employment relationship is terminated prior to the occasion on which the gratification is paid, the employee is only entitled to a proportionate share of the bonus if the contract so provides. Otherwise, the employer is not obliged to pay a gratification to the employee.
If it is part of the salary, it will be paid in proportion to the duration of the employment relationship for the year in question.
Release from the obligation to work
The employer sometimes releases his employee from his or her obligation to work. In this case, the employee may not be able to achieve the planned objectives or may no longer be working when the bonus is paid. The type of bonus will determine whether or not the employee is entitled to the bonus.
Abuse of rights
In most cases, the gratification is not due when the employment contract ends before the date on which the bonus is usually paid. The employer might be tempted to dismiss the employee before this date, in order to avoid paying the bonus. This is an abuse of right that can be sanctioned.