The Court of Appeal has decided that the announcement of a guaranteed minimum bonus pool at a staff meeting created a contractually binding obligation to pay what was announced. The announcement, delivered by Dresdner Bank’s CEO at a meeting which staff were encouraged to attend, amounted to a variation of the employees’ terms and conditions.

The Court confirmed that where any contractual right is established, the employer must honour it even if it is no longer in its best interests to do so, and even if circumstances have changed dramatically since the contract was entered into. Businesses should therefore be extremely careful when making communications affecting pay – particularly important in the case of group communications. [Dresdner Kleinwort Ltd and Commerzbank AG v Attrill and others [2013] EWCA Civ 394]