Keen v Commerzbank and Employees Challenge

Employee may still have a challenge if he is able to prove that the employer intentionally terminated the employment as a means of escaping the obligation to pay a bonus in cases where a contract of employment provided that the employee is not entitled to a bonus payment should he/she be unemployed at the time payment of the bonus is due. Such a claim would fall under the implied duty of trust and confidence.

Under the implied duty of trust and confidence which is essentially pro-employee requires that the employer treat the employee with “due respect and consideration”, having regard to their needs and sympathetic to their difficulties and expectations. The ruling in Keen essentially shifts the tide in that it takes a pro-employer approach, although it attempts to perceive the general concepts of the implied duty of trust and confidence.
The ruling in Keen v Commerzbank came at a time of unstable market fluctuations and entirely constrained labor conditions. In this regard, the court ruled that the employee wishing to successfully challenge the amount allotted him/her with respect to a discretionary bonus would have an onerous burden of proof to discharge. Proof that the employer paid a smaller bonus than that recommended by his/her manager and an amount that did not correspond with the employee’s labor input would not be sufficient evidence to discharge the employee’s burden of proof. The current labor and market conditions would, therefore, provide the employer with a wide discretion with respect to the distribution of the amount of bonus paid. The employee would need additional and corroborative evidence to support a claim that the employer’s discretion was irrational or perverse. In this regard, the irrational and perverse requirement would establish that there was a breach of the implied duty of trust and confidence.
In acknowledging the significance of the established principle of the implied duty of trust and confidence the Court of Appeal confirmed that the employer would typically be required to provide a reason for the exercise&nbsp.of its bonus distribution discretion in a specific way.&nbsp.&nbsp.