Three judges today awarded a London trader the £1.4 million bonus he was denied by his Dutch bank employers.
Saleem Khatri went to the Court of Appeal claiming the bonus was due under a contract he had signed with Cooperatieve Centrale Raiffeisen-Boerenleenbank BA.
Lord Justice Jacob, giving the ruling of the court, said it would be "quite wrong to infer from all the circumstances" that Mr Khatri had accepted changes to the contract which would remove his right to performance related bonus.
The judge said Mr Khatri was employed by the bank as a derivatives trader from 1998 until 2009.
"It is common ground that the claimant was good at his job and regularly made money for the bank."
Under a contract signed by Mr Khatri in 2008, when his salary was increased to £100,000 a year, he was entitled to a performance related bonus.
Three months later the bank asked him to sign a letter which added restrictive covenants to his contract. Mr Khatri did not sign.
When redundancies were threatened, he made it plain to his employers that he did not accept that the letter was effective to deprive him of the performance related bonus under his original contract.
In January 2009 he was dismissed because of what the bank said was redundancy.
Lord Justice Jacob said: "By the end of 2008 the claimant had traded successfully on behalf of the bank."
He had made a profit of 13,898,066 euros (£12 million) and by the bonus formula was entitled to 1,601,767 euros (£1.39 million). Mr Khatri made that claim with interest.
The bank said that the variation to the contract took place against a general background of the financial crisis.
Other members of the trading team had bonus formulae in their contracts but this did not give them an entitlement to a bonus if the performance was achieved, said the bank.
Lord Justice Jacob said the contract contained the words "you will also be eligible" to the bonus payment.
He said this meant that the contract did confer on Mr Khatri a right to a bonus according to the formula.
"I reach this conclusion with no regret. If banks decide to reward their employees by means of purely discretionary bonuses then they should say so openly and not seek to dress up such a bonus with the language of entitlement qualified by a slight phrase which does not make it absolutely clear that there is in fact no entitlement at all.
"If you are to give with one hand and take away with the other, you must make that clear."Reuse content