‘Good Employment Practice’ in the Context of (End of Year) Bonuses

In Aruba employment law, the principle of ‘good employment practice’ ( “goed werkgeverschap“) is a fundamental concept. This principle is codified in Article 7:611 of the Aruba Civil Code (Burgerlijk Wetboek, BW). It emphasizes fairness and equality in the treatment of employees by their employers.

When it comes to discretionary payments like year-end bonuses, this principle plays a crucial role. The law generally requires that if an employer gives a year-end bonus without any obligation (i.e., it’s not a part of the employment contract or collective agreement), then this bonus should be distributed equitably among all employees. This is in the labor law practice, is sometimes summarized by the Dutch saying “gelijke monniken, gelijke kappen” which translates to “what’s good for the goose is good for the gander,” akin to the principle of equality or the equality principle. 

There’s an exception to this rule. If a bonus or extra payment is tied to specific criteria, such as exceptional performance or meeting certain pre-set conditions, then the employer can award this bonus selectively. In this scenario, only those employees who have completed the particular criteria or have delivered exceptional performance would be eligible for the bonus. This approach is considered lawful and in line with the ‘good employment practice’ concept because the differentiation is based on objective and justifiable grounds. However, employers ought to be careful in giving out bonuses without taking necessary precautions to prevent such bonuses from becoming acquired rights, i.e., rights that the employees can demand under certain circumstances. There are guidelines to help the employer mitigate such risk.

The principle of ‘good employment practice’ requires fair and equal treatment of employees; it also allows for differentiation based on reasonable and transparent criteria related to employee performance or achievements. Employers that pay bonuses should pay special attention to their employment agreements and applicable guidelines to mitigate associated risks. If you are joyful and planning to give out bonuses, you may want to contact Gomez Coffie Law and get some guidance before you call Santa.

PS: Remember, end-of-year bonuses are a bit like holiday lights – they can brighten up the season, but sometimes they flicker out when you least expect it! 

Happy holidays, and here’s to a bright and prosperous New Year!🎉🎄

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