Discretion to be exercised rationally

Clark v Nomura International, unreported, September 2000, Queens Bench Division

Clark started employment in July 1995 as an equities trader, and his contract provided for a discretionary bonus “dependent on individual performance”. Clark was extremely successful, earning profits of almost £14m in his first year for which he was paid a bonus of over £2m.

Clark was dismissed for misconduct in February 1997 and given three months’ notice. Nomura paid no bonus to Clark for his second year, even though he had earned profits of £6m.

Clark brought a successful breach of contract claim. Nomura argued that satisfactory performance was merely one factor to be taken into account when exercising its discretion.

The Court disagreed. The bonus was dependent solely on performance. Although Clark had been dismissed, the reason for dismissal – which included inappropriate dress and poor time keeping – had no impact on Clark’s performance.

Nomura’s discretion had to be exercised rationally and without perversity. It was irrational not to pay a bonus to such a successful trader and Clark was awarded £1.3m damages.

Unions have an obligation to represent members

English v Unison, IDS Brief 668, County Court

On 4 September the statutory right to be accompanied came into force, giving workers the right to be accompanied by a colleague or trade union official at disciplinary and grievance hearings. There is no statutory obligation to act as the companion but a trade union may breach its own rules if it declines to act.

English was a member of Unison and his union rule book provided that members were entitled to have a Unison representative at disciplinary hearings. English had been accompanied by a Unison representative at two disciplinary hearings. When a third incident occurred Unison refused to provide representation because English’s case lacked merit. English was eventually dismissed.

He brought a successful breach of contract claim, arguing that the provision in the rule book was a contractual term of his membership with Unison and it gave him an absolute right to representation at disciplinary hearings. The judge agreed it was a contractual term but held that members have a qualified right to representation unless in all the circumstances that would be unreasonable.

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