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Linklaters Insights: Hong Kong court rules that dismissal effected to avoid paying discretionary bonus amounts to breach of contract

24 March 2015

The Hong Kong Court of First Instance recently found Bank of America liable to pay damages of US$500,000 to a former senior employee in respect of the annual discretionary bonus that the court held would have been awarded to her (ie the equivalent of over 360 per cent of her annual remuneration package) had she not been dismissed before the bonus payment date.

Specifically, the court held that the ‘only reasonable inference’ available from the facts was that one of the Bank’s dominant intentions in terminating her employment was to avoid her being eligible to participate in its performance incentive program for that year. This was held to be a breach of the anti-avoidance term that the court implied into her employment contract.

The full article is available on the Linklaters website.