An employer's 'discretion' — an unfettered right?

In a welcome judgment for employers, the Guernsey Employment and Discrimination Tribunal recently rejected an employee’s claim for constructive unfair dismissal and upheld an employer’s right to exercise its discretion in accordance with the terms of its discretionary bonus scheme.

But the decision may not be as comforting as it initially appears.

In the UK, it has long been accepted that an employer is entitled to exercise their discretion in whatever way they see fit, provided that it is not done in an ‘irrational or perverse’ manner. Therefore, should an employee wish to challenge the validity of an employer’s decision to exercise (or not to exercise) its discretion, this is an exceptionally high threshold for an employee to surmount. Pursuant to this test, an employer is under no obligation to exercise its discretion reasonably but rather it must not exercise it in bad faith or capriciously. For example, it would be considered ‘irrational’ if an employer had exercised their discretion based on whether they liked an employee’s shoes or whether the employee was shorter (or taller) than the managing director…

Click on the link below to read the rest of the Mourant Ozannes briefing.

Sign in or Register to continue reading this article

Sign in

Register

It's quick, easy and free!

It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.

Register now

Why register to The Lawyer

 

Industry insight

In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.

 

Market intelligence

Identify the major players and business opportunities within a particular region through our series of free, special reports.

 

Email newsletters

Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.

More relevant to you

To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.

Briefings from Mourant Ozannes

View more briefings from Mourant Ozannes

Overview

6th Floor
125 Old Broad Street
London
EC2N 1AR
UK
http://www.mourantozannes.com

Total partners: 51
Total fee earners: 248