Payment of bonus to former employees
25. 6. 2024
Veronika Rožnovská
Labour law
The Supreme Court of the Czech Republic has once again considered the issue of former employees’ entitlements to bonus payments. The Court confirmed that the employer has the right to determine the conditions for payment of bonuses, which must be met by the employee at the time they are awarded. In this particular case, the Supreme Court considered a situation in which a former employee sought payment of a bonus even though her employment had ended before the decision to award the non-reward bonus.
The employee argued that the bonus had been paid in respect of the previous calendar year as remuneration for work done and that the employee should therefore also be entitled to such bonus. The employer opposed this view, arguing that the purpose of the bonus was mainly to motivate existing employees.
The court agreed with the employer’s arguments, stating that the employer had every right to determine the terms and conditions of the bonus payment. It also stressed that the employer must not disadvantage former employees if they are in a comparable situation to current employees and the principle of equal treatment and non-discrimination must be respected.
According to the court, it is crucial that the conditions for the payment of bonuses are transparent and non-discriminatory, thus avoiding potential disputes and ensuring fair treatment of all employees, whether former or current.
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