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Implied duties when exercising discretion

Where an express term gives an employer discretion, for example to decide whether or not to pay a bonus, there is an implied term that the discretion will be exercised rationally, lawfully and in good faith (Hornulak v Cantor Fitzgerald International [2004] IRLR 942). However, the employee must prove that the discretion was exercised irrationally, and the standard of proof is “very high” (Keen v Commerzbank [2006] EWCA Civ 1536).