A recent judgment of the Luxembourg Court of Appeal (Decision n° 74/25- III– TRAV-6.06.2025) has sent a clear signal to employers: when generosity becomes routine, it can turn into a legal obligation.

An employee, after receiving an annual year-end bonus for five consecutive years, saw this payment suddenly reduced when his company sought to “harmonise” compensation across the group. What the employer considered a discretionary gesture was, in the eyes of the Court, an acquired right that could no longer be touched without the employee’s explicit consent.

The Court confirmed that the regular, consistent and fixed payment of the same bonus over several years was enough to create a binding company practice. Even if no contractual clause or collective agreement initially provided for such a benefit, the repeated fulfilment of these 3 conditions over time is enough to give the bonus the nature of an acquired contractual entitlement.

By unilaterally reducing the amount, the employer had, in effect, modified a key term of the employment contract in violation of Article L.121-7 of the Labour Code.

Attempts to justify the change by referring to a collective agreement negotiated with the staff delegation were unsuccessful. The Court emphasised that a collective agreement cannot strip an individual employee of a more favourable advantage unless that employee expressly agrees to it. Nor can silence or delay be interpreted as acceptance when the employee continued to receive the full amount until the modification took effect.

For employers, the lesson is simple but crucial.