Dismissal and end-of-year bonus

Dismissal and end-of-year bonus

"I've just been made redundant and I'd like to know if I'm entitled to claim part of the bonus I normally receive at the end of the year?"

Pascal, Geneva

In principle, the end-of-year bonus, commonly known as a bonus or premium, is a special payment made by the employer in addition to the employee's salary in order to share in the company's good results, to encourage the employee for the future or to build employee loyalty. It is governed by art. 322d of the Swiss Code of Obligations, which stipulates that this bonus is only payable when it has been agreed.

As a result, where it is stated in the written contract, or agreed orally at the time the contract is concluded, or even during the course of the year, that the employee will receive a bonus, this is payable. On the other hand, if nothing has been contractually agreed, its payment depends on the goodwill of the employer, who may decide one year not to pay it.

However, according to the case law of the Swiss Federal Supreme Court, in the absence of an explicit agreement, a bonus is deemed to be agreed when the employer has paid it for more than three consecutive years without reserving its optional nature in a declaration addressed to the employee. Thus, depending on the circumstances, the bonus may be due even though, year after year, the employer has repeatedly expressed a reservation on the subject.

Finally, it should be noted that, by definition, bonuses are incidental to salary and can only be of secondary importance in an employee's remuneration. Consequently, according to our Supreme Court, a very high bonus in comparison with the annual salary must be considered as variable pay even if the employer has reserved the optional nature. According to the judges, this is the case, for example, when the "bonus" is close to the amount of the annual basic salary, but not when it does not exceed a quarter of the latter.