During the G20 demonstrations outside the Bank of England I received several texts from assorted City types. In each I was urged to join them on the roof terrace of the Coq d'Argent restaurant, where apparently one could watch the riot below while drinking half-decent champagne and even participate at a level by showering corks on the masses below. I can be forgiven for thinking they may have missed the point.

Meanwhile, Harriet Harman had already informed the nation that the 'easy' bonus culture was dead and that she would personally ensure that Sir Fred Goodwin could not count on drawing his full pension (in a statement somehow reminiscent of the fridge magnet legend: Beer will save the world; I don't know how, it just will). No doubt this gave solace to the poor souls who had been arrested merely for breaking into the Threadneedle Street branch of RBS, presumably to bank an urgent cheque, the building having inconveniently being closed for the whole day.

In such political times must we then ask whither the corporate bonus? The interpretation of bonus scheme rules has long been a source of contention and litigation - not least given the ambiguous way in which they are often written - but perhaps never more so than in the current climate. Even leaving aside the curious sociological question of how the state really expects to be entitled to interfere in private sector bonuses in what is supposedly a capitalist society (the 'nationalisation' of banks aside), the debate raises a number of challenging issues for those considering the payment or receipt of bonuses.

From the straw poll I took on the day, we must assume that not all City 'bankers' (now of course shorthand for anyone who goes to work by tube) are voluntarily going to reject their bonuses - especially when they believe they worked especially hard last year and when their department, or indeed company, did well. At the same time, employers may find it difficult to be seen paying big bonuses against this backdrop or even, dare I say, find themselves tempted to use the backdrop as an excuse to avoid coming up with the goods.

But where will employers find themselves at law? At the top end of the scale will be those (even within the 'nationalised' banks) who have a guaranteed contractual bonus. Provided the terms are clear it is very hard to see how such bonuses could lawfully be withheld. If there is an express contractual entitlement to a bonus this would surely require retrospective legislation or the intervention of, say, insolvency law to defeat a claim. If the bonus is clearly quantified its non payment may even amount to an unlawful deduction from wages, throwing the doors of the employment tribunal open to potential combatants.

There would of course also be commercial considerations involved in persuading new employees to join, because if the employer reneges on prior guarantees how valuable are future ones? Like a pension that has already been signed off and granted, this just ain't realistic, Harriet.

The same basic analysis must surely apply to a contractual bonus scheme with clearly defined objectives that have been met - although much may depend on how clearly those objectives have been defined (draughtsmen please step forward). Essentially, we must ask as to what contractual basis there could be for employers withholding such sums, however 'excessive' the court of public opinion or shareholders find them? Can the bargain really be reneged upon?

Where it will get most interesting then will be the poorly defined contractual scheme and, more particularly, that perennial favourite for employment lawyers, the 'discretionary' scheme. Whether discretionary in whole or part these are the schemes that draw most litigation, but how will they be affected by the economic backdrop that has been painted for us?

We already know from cases such as Stephen Clark v Nomura International Plc [2000] IRLR 766, and Cantor Fitzgerald v Steven Horkulak [2004] IRLR 942, that the exercise of discretion by employers is not completely unfettered. We are told that the decisions must not be 'capricious' or 'perverse'. Employers must also take care not to exercise discretion with abandon in a manner that may, however unintentionally, be discriminatory in effect or even a breach of mutual trust and confidence.

At the same time, however, cases such as Commerzbank AG v James Keen [2007] IRLR 132, suggest that a court may be slow to interfere in the actual amount paid (as opposed to where no bonus at all or a ludicrous bonus has been paid), with the Court of Appeal stating that it was in essence obliged to consider whether the employer had exercised its discretion in a way in which 'no reasonable employer' would have done.

For the 'nationalised' banks the Commerzbank approach may provide a temporary panacea where bonus schemes are wholly discretionary. These institutions clearly haven't 'performed' in 2008 and it may be relatively safe to heavily reduce or perhaps even eliminate bonuses, even where the individual has themselves performed well. But what of the mixed scheme which relates also to an individual performance against targets or schemes in other organisations where the company's performance has been good or even weaker than before but not catastrophic? Equally, what of the Northern Rocks, which are now performing in 2009 but where public opinion may remain vehemently opposed to bonuses being paid for years to come. Should the courts really accept the influence of public opinion when considering what no 'reasonable employer' would do or what is perverse when accessing a claim?

From a practical perspective, many employees will for a brief time be receptive to receiving lower bonuses, if only for the perverse pleasure in a few cases of denying the chancellor a large slice of the sum paid, but this can't continue. Employers who are faced with a different mindset may of course be tempted to remove the offending limb before bonuses are due. Those affected won't be the first we have seen this year who have effectively been offered their bonus for last year as an enhanced redundancy payment. However, those employers will need to tread carefully. In Commerzbank it was made clear that there might be a claim for damages for repudiatory breach against those terminating a contract just before a bonus was due in order to avoid paying such bonuses. Mutual trust and confidence may play a part, and once again the employer will need to reach for the express terms of their contract and hope there is sufficient in there to allow non-payment when key dates are not met.

Even where the contract assists, there still remains the broad discretion of tribunal judges to award amounts that are 'just and equitable' where the dismissal is unfair and where arguably lost bonuses may fall to be claimed through this alternative route (subject to the cap of course). That is before we consider the potential impact of discrimination law on any inconsistencies of approach.

All of this then may be good news for the draughtsmen as much as the litigators among us, for there has never been a better time to give that bonus scheme a spring clean. Is it perhaps ironic however that all of this should come at a time when the country needs more paid in taxes (and therefore people earning more) and where MPs have been strongly criticised themselves for what is described as having their snouts in the trough - are parliamentary expenses taxable?

For partners in major City firms who specialise in employment (or as they are know known 'bankers') the shock of the governments forthcoming 50% tax rate should perhaps be offset by the fact that employment lawyers have already had a 'very good war'. The debate over bonuses caused by that same government will undoubtedly provide much more work for those same teams in the months to come. What we must hope, for the good of all, is that it is not the insolvency teams who become the senior partner's new darlings, Darling.

Darren Clayton Doyle Clayton, London