Year-End Bonus: A Bonus That Lives Up to Its Name
22 November 2007
Read by 4103 persons
Employers can freely award bonuses to employees. However, they are obligated if the payment of a bonus results from the application of the employment contract, a collective agreement, custom, or unilateral commitment (the law does not provide for the attribution of bonuses in addition to salary). The most common bonuses are, in particular, the attendance bonus, the seniority bonus, the end-of-career bonus, and the year-end bonus commonly called the "thirteenth month".
As soon as a bonus is mandatory, it takes on the character of salary and the employer is required to pay it to the employee.
Should an employer who voluntarily grants an employee an exceptional bonus equal to the mandatory year-end bonus also pay this latter bonus to the employee?
The Story:
An employer pays an employee a so-called "exceptional" bonus a few months before the end of the year, the amount of which is equal to the year-end bonus. The employer believes that the payment of this exceptional bonus exempts him from granting the employee the year-end bonus. The employee demands the year-end bonus and refers the matter to the Labor Court.
What the Judges Say:
The judges consider that the payment of an exceptional bonus does not release the employer from his obligation to pay the year-end bonus, even if their amounts are identical.
Key Points
As soon as a bonus is mandatory, the employer is required to pay it to the employees concerned.
The employer may, of his own free will, grant a supplementary bonus. However, the voluntary payment of a bonus by the employer does not exempt him from paying mandatory bonuses.
Thus, the employer who voluntarily grants an employee an exceptional bonus equal in amount to the mandatory year-end bonus is still required to pay the employee this latter bonus.
Decision of the Social Chamber of the Court of Cassation of October 25, 2007 - Case No. 06-43.966
Published November 12, 2007
RH Demain
As soon as a bonus is mandatory, it takes on the character of salary and the employer is required to pay it to the employee.
Should an employer who voluntarily grants an employee an exceptional bonus equal to the mandatory year-end bonus also pay this latter bonus to the employee?
The Story:
An employer pays an employee a so-called "exceptional" bonus a few months before the end of the year, the amount of which is equal to the year-end bonus. The employer believes that the payment of this exceptional bonus exempts him from granting the employee the year-end bonus. The employee demands the year-end bonus and refers the matter to the Labor Court.
What the Judges Say:
The judges consider that the payment of an exceptional bonus does not release the employer from his obligation to pay the year-end bonus, even if their amounts are identical.
Key Points
As soon as a bonus is mandatory, the employer is required to pay it to the employees concerned.
The employer may, of his own free will, grant a supplementary bonus. However, the voluntary payment of a bonus by the employer does not exempt him from paying mandatory bonuses.
Thus, the employer who voluntarily grants an employee an exceptional bonus equal in amount to the mandatory year-end bonus is still required to pay the employee this latter bonus.
Decision of the Social Chamber of the Court of Cassation of October 25, 2007 - Case No. 06-43.966
Published November 12, 2007
RH Demain
