Illegality of clauses in bonus plans: limits on corporate power

In its judgement of 17 February 2026 (STS 165/2026), the Supreme Court examines the validity of certain clauses included in a variable remuneration plan introduced by the company in the context of a collective conflict.

The judgement addresses two key issues: (i) the exclusion of the payment of bonuses in the case of serious or very serious disciplinary sanctions and (ii) the power of the employer to adjust the amount of the bonus at its discretion.

In this way, it has confirmed the illegality of both clauses, establishing a clear legal principle regarding limits in the design of incentive schemes by companies. Firstly, it rejects the idea that the accumulation or payment of the bonus can be conditioned on the absence of disciplinary sanctions when the employee has already met the objectives, as it considers that this constitutes a disguised economic sanction, prohibited by article 58.3 of the Workers' Statute. The company cannot impose additional sanctions not provided for in the disciplinary regime nor deprive workers of remuneration already earned.

Secondly, it also nullifies the clause that allows the bonus to be reduced by up to +/- 15% - or even more - at the discretion of the direct supervisor, arguing that it introduces a margin of discretion incompatible with the principles of transparency and predictability of remuneration. The Court emphasizes that the amount of variable remuneration cannot be left to the unilateral discretion of the employer nor depend on indeterminate or non-objective criteria.

The central issue lies in defining the scope of managerial discretion in the design of incentives. The judgement acknowledges this power but insists that it must be exercised within legal limits: respect for the disciplinary system, the prohibition of hidden economic sanctions, and the requirement for clear, objective, and predefined criteria.

Consequently, once the objectives have been achieved, the right to the bonus is established and cannot be affected by subsequent management decisions or by ambiguous or discretionary conditions. Furthermore, the right of workers to receive the wage differences arising from the application of the annulled clauses is recognized.

In summary, this ruling reinforces legal certainty regarding variable remuneration, establishing that incentive plans cannot be used as an indirect means of sanction or be subject to unilateral decisions without transparency.

Article from the Labour Law Department of ECIJA Madrid.