Verbal Bonus Agreement
Ms. Hansen worked in a company where discretionary bonuses were sometimes paid. For the previous year, she received a bonus that was to be paid in monthly increments. The NH Supreme Court also ruled that a bonus qualified as a « salary » within the meaning of New Hampshire`s salary status, Ms. Widney is thus entitled to the potential for legally liquidated damages and a distinction awarded by lawyers who have both been awarded. The Tribunal indicated that their participation did not mean that an employer could not, for a period of time, pay a premium in the event of continued employment. On the contrary, the Tribunal stated that, in this case, the establishment is limited to the circumstances in which a bonus is part of an agreed set of remuneration and that the worker has fulfilled all the obligations necessary to trigger the employer`s obligation to pay the bonus. The Employment Appeal Tribunal (EAT) found that the employer`s state that a bonus was a margin of appreciation did not necessarily mean that it had no contractual effect. The principle of « offer and acceptance » is really as simple as it sounds when someone makes an offer and you accept – then you have taken the first step to make an oral agreement legally binding.
Both parties must have shown that they intend to create a legally binding agreement for the courts to recognize it as such. Both the High Court and the Court of Appeal granted employees` demands on their full premiums. In the Court`s view, the information provided to the workers constituted a commitment that gave rise to a contractual obligation and, as the employer argued, was not a binding promise. It was sufficiently secure and had to create legally binding obligations. I once heard an employer tell an employee that she did not have to keep a promise because it was « just an oral contract. » However, an agreement must not be concluded in writing to be legally binding, since binding contracts can be either written or or oral. This case was brought by employees of an investment bank with respect to their right to a bonus. The workers stated that they had been informed by the employer that they would participate in a guaranteed minimum bonus pool that would only be subject to the assessment of the individual benefit. Before the termination took effect, the company mistakenly made a us$477,400 payment to the employee as a result of a « processing error » that was to contain the withholding bonus, while the company felt that he would not be entitled to the bonus, as it was not yet used at the specified date. After acknowledging its error, the company tried to compensate the amount already paid (the deduction bonus) with the amount it still owed the employee (payment instead of dismissal) and claimed that it did not owed the employee an additional penny. But in this case, if Sam had already begun to do the promotion work and Martin was aware of it, it is more likely that a court would recognize the oral agreement as binding.