Loss of earnings within an award can include any commission, bonus or other benefit that the employee reasonably expected to receive had they remained in the employment (s123(2)(b) ERA 1996). The sums do not need to be contractual, provided that the reasonable expectation can be established. The same approach will apply in discrimination awards.
Where the value of a bonus is sought under the unlawful deduction from wages jurisdiction or for breach of contract, specific considerations apply (see Unlawful deductions from wages).
Gross or net: Such sums should be paid net of tax and NI and grossed up where appropriate.
Adjustments: Any bonus will be included in the compensatory award and adjusted alongside.
Mitigation: The mitigation rules applicable to the compensatory award apply to bonuses.
Tax: The compensatory award, which includes loss of benefits, is taxable and will fall to be grossed up under s401 if the award overall exceeds £30,000 (see also Grossing up).
Recoupment: The recoupment regulations state that ‘any amount ordered to be paid and calculated under s123 [of the ERA 1996] in respect of compensation for loss of wages for a period before the conclusion of the tribunal proceedings’ form part of the prescribed element. It is unclear whether a bonus would be defined as ‘wages’ but it is likely that any bonus payment awarded would be subject to the recoupment regulations.
Statutory authorities: ERA 1996) s123(2)(b)
Case law: York Trailer Co Ltd v Sparkes  IRLR 348
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