The Antwerp labour court established the consequences in case an employer fails to determine bonus targets in its judgment of 19 June 2019.
In the case at hand, article 2 of the employment contract of the employee set out that the employee was entitled to variable remuneration (commission) on the basis of the current bonus scheme with a minimum of 250 EUR per month and a maximum of 1,500 EUR per month. No bonus targets were, however, included in the employment contract, nor in any other document.
The employee was paid a variable remuneration of 250 EUR per month at the start of his employment in 2012, which was gradually increased to 283,56 EUR in March 2017. In 2016, an annex was drafted with the intention to abolish payment of the variable remuneration, but this annex has never been signed by the employee.
In 2017, following a dispute on the unilateral modification of his position, the employee claimed outstanding variable remuneration due to the failure of the employer to determine bonus targets. The employment contract was unilaterally terminated by the employer in January 2018.
The case was brought before the court in Antwerp and the employee was of the opinion that he was entitled to the maximum amount of 1,500 EUR per month, amongst other things, as his employer had not disclosed any bonus targets.
The Antwerp labour court decided the following in its judgment:
- Article 2 of the employment contract indeed sets forth that the employee is entitled to variable remuneration, the amount of which varies depending on a bonus scheme, with a maximum of 1,500 EUR per month.
- The employer has never provided the employee with the aforementioned bonus scheme and it seems that no bonus scheme had been drafted, as this was not provided during the proceedings before the labour court.
- In not providing the bonus scheme (and the targets) to the employee, the employer made a contractual error.
- Since the employer had undertaken to pay variable remuneration and made it impossible for the employee to reach the bonus scheme targets (in not providing the employee with the bonus scheme and targets), the employee will be entitled to the maximum amount of the variable remuneration.
Taking the aforementioned into account, the labour court determined that the employee is in fact entitled to the difference between the maximum amount of 1,500 EUR and the variable remuneration that was paid to him during the course of his employment.
The judgment of the labour court confirms the point of view of part of Belgian case law, which sets forth that when the bonus amount has been confirmed but the bonus targets have not been communicated transparently to the employee, the employee is entitled to the maximum bonus.
Taking into account the potential consequences, it will thus be important for employers to carefully assess whether any bonus targets are in place and whether these have been provided to the employee.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.