Date of Decision: March 12, 2009 E.C.
Litigating Parties:
Applicant: Awash International Bank S.C.; Respondent: Ato Guta Dessalegn
Brief Description of the Case: The Respondent claimed bonus payment after voluntarily resigning from the Applicant. The Bank opposed the payment, stating that its directive contains a rule that “an employee who has been paid a bonus has an obligation to remain in employment for 6 months; otherwise, they shall refund it.”
Legal Interpretation (Rule):
An employer has the right to establish a clear directive regarding the awarding, amount, and payment system of bonuses. An employee must fulfill the criteria stipulated in the directive to be eligible for a bonus.
Reasoning:
Although the Respondent rendered service during the year the profit was earned, the Bank’s directive compels an employee who has been paid a bonus but did not work for 6 months to refund the money. Since the Respondent resigned before the bonus was paid and would not remain in employment for 6 months, they do not fulfill the criteria.
Ruling:
The decision that the Respondent is entitled to bonus payment is hereby reversed due to a fundamental error of law.