Horkulak v Cantor Fitzgerald International

Horkulak v Cantor Fitzgerald International [2005] ICR 402

Facts

Mr Horkulak was a broker who resigned with two years left to run on a fixed term contract of employment, successfully claiming wrongful and unfair dismissal. The contract stated “the company may in its discretion pay you an annual bonus”. Mr Horkulak claimed an entitlement to the bonus that he would have expected to receive had he remained working for the company for the full term of the contract. The company argued that as the bonus was discretionary, they would have been under no obligation to pay any bonus and that Mr Horkulak should only be able to recover those sums to which he was contractually entitled.

Held

The Court of Appeal approved the decision in Clark v Nomura and developed the law by stating that Mr Horkulak was entitled to a “bona fide and rational” exercise of discretion by his employer. Mr Clark was awarded close to £1 million in damages in respect of this bonus payment.