Bonuses: Law favours employees, says partner

City of London solicitors are split on whether they will see a wave of business from bankers disputing the size of their end-of-year bonuses.

The Financial Times quotes Ian Hunter, joint head of the international employment practice at law firm Bird & Bird, who says: "There has been a very significant increase in bonus payments this year, which means there is a much wider likelihood of both employees and employers arguing because the amounts in dispute are more significant."

Gareth Brahams, a partner at law firm Lewis Silkin, told eFinancialCareers.com that bonus disputes are indeed on an upward trend, but not for the reasons Hunter gives. "Each year the law becomes more favourable to employees," he said. "This makes it more worthwhile to contest the size of a bonus."

The most significant development last year, says Brahams, was an appeal court's decision to uphold the previous judgement in the case of Steven Horkulak, a former Cantor Fitzgerald trader who sued for wrongful dismissal. Horkulak was originally awarded 900,000 in damages, a figure that was reduced after negotiation.

Rival employment lawyers say they are less certain of a flood of cases, however. Paul Puxon, a solicitor at Ferguson's, the firm which represented Steven Clark in the groundbreaking 2000 Nomura case, says there were no more claimants now than in previous years. Most claims came through in November, says Puxon, and were related to bankers dismissed before bonuses were announced.

Jane Mann, head of employment law at Fox Williams, says the widening differential in bonus payouts for top performers and others has the potential to spark claims. But, from a firm's management perspective, she says using pay to discriminate between high and lo performers is the right thing to do: "The key thing is that banks need to be able justify the level of bonuses."