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The Braganza responsibility, derived from the Supreme Court’s choice in Braganza v BP Delivery Ltd, requires that choices taken under a discretionary power must not be irrational or perverse and must follow a good, evidence-based decision-making process. For discretionary bonuses, employers have extra flexibility to amend or withdraw the scheme, however discretion should nonetheless be exercised fairly. Importantly, withholding or lowering a contractual bonus without consent might breach part thirteen of the Employment Rights Act 1996, giving rise to an unlawful deduction of wages declare. Where a contractual bonus is in place, any alteration to the scheme will normally require a formal variation of contract. Clear guidelines, constant software and strong record-keeping assist employers manage legal and operational risks.
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