Pepeliaev Group’s Employment Practice has succeeded in having the first instance court issue a decision in favour of the client to reduce a top manager's bonus

Vitalia Kuznetsova, Head of Pepeliaev Group's Employment and Migration Law Practice Group, represented a defendant, the global leader in the area of healthcare and hygiene products, against a claim of its IT director, who also was a member of the Board, in a dispute concerning a bonus.

The court denied the claimant the payment which had been guaranteed to him by the company's previous management. The defendant’s position appeared hopeless (because the bonus had been guaranteed by the employment agreement provided that the company reached certain figures. These figures had been attained, which the financial reports confirmed). However, we succeeded in convincing the court that when making a decision concerning whether a bonus should be paid which had been established for an employee, it should take into account not only the legal rules or the provisions of the employment agreement, but other circumstances as well (including, among other things, the employee's actual contribution to the work and the defects of their work). At the same time, the dispute was further aggravated by the fact that the claimant's job duties had not been defined clearly and no formal disciplinary action had been taken against the top manager regarding the defects identified by the company.

This precedent is important for employers because it contributes to developing an approach in judicial practice based on an objective picture of the case, rather than following a formal approach and adhering to the concept that an employee, as the “weak” party to an employment dispute, should enjoy absolute protection.