How to Reach a Reasonable Opinion

May 01, 2015

Charles Wynn-Evans examines a recent Supreme Court decision considering a challenge to an employer's decision under provisions in an employment contract providing for the employer to determine a matter in its opinion.

Employment lawyers will be familiar with the limitations that the common law places on employers' exercise of contractual discretions in the employment relationship, particularly when marking discretionary bonus awards. A well known line of cases has implied a term into the contract of employment to the effect that an employer must not determine a contractual but discretionary bonus award irrationally, perversely, arbitrarily or otherwise that in good faith (Horkulak v Cantor Fritzgerald International [2004], Clark v Nomura International plc [2000] and Clark v BET plc [1997]).

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