California court says Sun Worshipping Atheist can be required to work overtime, even if it means getting less than 8 hours of sleep

Marshel Copple is a “Sun Worshipping Atheist” – a religion he created and of which he is the sole member. The core principles of Sun Worshipping Atheism, according to Mr. Copple, include:

praying in the sun;
taking natural fresh air daily;
sleeping eight hours or more;
eating and drinking when needed;
frequent exercise;
daily rest; and
engaging in frequent social activities.

Mr. Copple worked as a corrections officer with the California Department of Corrections and Rehabilitation. He sued the Department, alleging that it discriminated against him and refused to accommodate his religious beliefs, which resulted in his constructive discharge. Among the Department’s allegedly improper actions was requiring him to work overtime, which Mr. Copple claimed interfered with his sincerely-held belief that humans require eight hours of sleep each night.

After losing before the trial court on summary judgment, Mr. Copple, representing himself, appealed. However, he fared no better on appeal, with the court succinctly stating “[w]e hold Sun Worshipping Atheism is not a protected religion under [the California Fair Employment and Housing Act] and therefore none of the causes of action are viable.” Its conclusion was supported by its finding that Sun Worshipping Atheism does not “address fundamental and ultimate questions having to do with deep and imponderable matters” but rather “deals with living a healthy lifestyle” and that it lacks “outward signs” of a bona fide religion, such as “rituals, a place of worship, hierarchy or holy days.” Instead, the court concluded that Sun Worshipping Atheism is Mr. Copple’s “personal philosophy” and his “way of life.” Thus, requiring Mr. Copple to work overtime, even though it interfered with his getting eight hours of sleep a night, could not be deemed religious discrimination.

All joking aside, it would be incorrect to read too much into the court’s decision here. It certainly does not mean that only traditional religions are protected under anti-discrimination laws. It does, however, make clear that simply believing strongly in something does not make it a religion. Religious creeds, according to the court, try to comprehensively answer questions of life, death, and human existence. Sun Worshipping Atheism, by contrast, appeared to the court to be a compilation of scientific suggestions for healthy living – and, of course, avoiding mandatory overtime.

Does sacking an employee for calling the boss a “complete d*ck” constitute unfair dismissal in Australia?

By David Whincup and Daniel Pasternak on April 2, 2015 Posted in Dismissal, Misconduct, NLRB, Recent Cases, Termination, Unfair Dismissal

In a sequel to our blog last year concerning Australian employers using expletives towards employees (click here), the Fair Work Commission was recently faced with the converse scenario, this time being asked to rule on whether an employer was entitled to summarily dismiss an employee who had inadvertently sent him a text message in which she described him as a “complete d*ck.”

The long-serving administrative employee, Ms Nesbitt, meant to send the text message to her daughter’s boyfriend who was about to do some work at her employer’s new premises. As well as the insult, she also stated “We know this already so please try your best not to tell him [the boss] that regardless of how you feel the need.”

After the initial excruciating embarrassment that the text message or email has landed in the wrong inbox, there is a range of options available to the fat-fingered texting employee. These include ignoring it and hoping the boss doesn’t see it (unlikely and wildly optimistic), trying to recall or retrieve the message without the recipient’s or IT forensics’ knowledge (impossible) or apologising promptly and profusely.

Ms Nesbitt opted for the last and tried to rectify the damage by sending two grovelling text messages to her boss, Mr Gardner, who by a stroke of particular misfortune for her was also the company’s Chairman and Managing Director. In doing so, she was contrite but dug herself into an even bigger hole by stating that it was just her sense of humour to exaggerate, the insult was “a family joke” and the boyfriend had a “little problem of very occasionally mouthing off some time and it was no more than a joke exaggerating both issues.” Clumsy, maybe, but well-intentioned. However, she later expressed views to the Board’s two non-executive directors that the situation between her and her boss was “serious” and requested to meet with them separately without her boss’ knowledge. They did not respond directly but she was summarily dismissed (which I suppose is an answer of sorts) and then filed a claim for unfair dismissal.

Ms Nesbitt submitted that the message should be considered in the context of the recipient it was meant for and that she lived with young people who put “complete” in front of every second word out of habit rather than any actual intention to emphasise. Although the FWC agreed that the relationship between Ms Nesbitt and Mr Gardner had deteriorated, it held that she was colloquially sharing her factual assessment of her boss. By using the word “complete”, the message was used to convey the view that “a person is, without exception, an idiot or fool – they are nothing less than a d*ck.” It would be interesting to consider (at a purely academic level, clearly) whether the outcome would have been different without the word “complete.” Had she used the phrase “a bit of a” or “rather a” or “sometimes a”, would that have lessened the legitimate irritation of the boss to the point where summary dismissal was no longer reasonable? Potentially yes, but it would all depend on the circumstances.

In upholding the dismissal, the content of the message was emphatic and trumped the alleged context. Had Ms Nesbitt’s mea culpa included a remotely plausible explanation and not involved a covert separate approach to the non-execs, she may have salvaged the situation and, as with our prequel blog, the FWC may have taken a more lenient approach due to her handling of the aftermath. However, where your own best explanation is that your boss is a family joke and that in mitigation, you do not think he is a complete d*ck, your employment must necessarily be on borrowed time.

As with our previous post, there is a parallel in English law where insults come accidentally to the ears of their subjects. Back in the 1970s, in Isle of Wight Tourist Board -v- Coombes, the Employment Tribunal there upheld the unfair constructive dismissal claim of an office assistant whose boss described her behind a door he thought was closed as an “intolerable bitch every Monday morning.” In both cases the issue is less that the hearing/seeing of the insult by the subject of it is accidental and more that those are the other party’s views in the first place. In the UK, you can think what you want about your employee or your boss, but you will clearly have only yourself to blame if you give voice to that.

Although calling your boss obscene names in Australia and England may get you sacked (for our US readers, fired), the issue is not so clear-cut in the US. Just this week, the National Labor Relations Board ruled that an employer unlawfully terminated an employee who, in a Facebook status update to his followers – which included a number of coworkers – called his boss a “NASTY MOTHERF-CKER” and a “LOSER” (yes, both times, in ALL CAPS), and added “F-CK his mother and his entire family.” Charming, indeed. The NLRB found, however, that the employees’ comments were in protest his boss’ unfair treatment of the employee and his coworkers, and thus constituted concerted activity protected under the National Labor Relations Act. Although remarkable, lest you think this decision is an outlier – last year, the NLRB ruled that an employer unlawfully terminated an auto salesman who called his boss, to his face, a “f-cking crook” and an “a–hole,” and ruled in another case that Starbucks unlawfully fired a barista who told his boss, during a heated argument in front of customers, to “go f-ck himself.”

UK employers named and shamed for National Minimum Wage breaches

By Squire Patton Boggs on April 1, 2015 Posted in Legislation, Wage and Hour

Last week, Business Minister Jo Swinson publicly named and shamed 48 more employers which have paid their employees below the UK’s statutory minimum wage.

The companies span the fashion, retail, hospitality and publishing sectors and are located right across the UK. They include the likes of the esteemed French Connection in London and Toni & Guy in Cheshire on the one hand, and the almost similarly well-known 99p Stores Ltd in Northampton and Crazy Divas Ltd in Colchester on the other.

The highest figure is the failure by G1 Venues Ltd, trading as Arta Restaurant, Glasgow to pay £45,124.00 to 2,895 workers. 2,895? What must their staff turnover be for one bar and club to get through nearly 3,000 people? It may be no wonder that one Yelp review describes the service there as “sluggish and utterly impersonal”. Not being paid even the minimum wage will do that to you, I guess. Collectively, the 48 companies named owe over £162,000 in arrears.

Since the Government revised the rules in 2013 to allow it to name and shame companies that underpay staff, the total number of named employers has reached 210, accounting for total arrears of over £635,000 and total penalties of over £248,000. The stricter regime seems to be having an effect of sorts. One of the employers named in the previous round in January 2015, estate agent Kings Group was found to have underpaid £53,808.91 to 53 workers and has now changed the way it pays staff. As minimum wage compliance is assessed over a four-week period, Kings decided to pay its employees the same amount of commission, but on a more regular basis to spread payments more evenly and to ensure that the National Minimum Wage regulations are strictly complied with. Not sure the employees would see that as a triumph, really.

Under the new scheme, the Government will name all employers which have been issued with a Notice of Underpayment setting out the wages to be paid by the employer, along with the penalty for non-compliance. Employers will not be named if they meet one of the exceptional criteria or have arrears of £100 or less, i.e. that:

naming by The Department for Business, Innovation and Skills (BIS) carries a risk of personal harm to an individual or their family;
there are national security risks associated with naming; or
other factors which suggest that it would not be in the public interest to name the employer.

Alongside naming and shaming companies, Swinson said that the Government is cracking down on employers which ignore the minimum wage rules by increasing the penalty fines and boosting the resources available to investigate non-compliance.

The Government announced on 17 March that the adult National Minimum Wage will increase by 20p an hour to £6.70 from October 2015, along with increases in the hourly rates for younger workers (currently £5.13 per hour for 18 to 20-year-olds and £3.79 for 16 to 17-year-olds) and for apprentices (currently £2.73).

President Obama Vetoes Senate Joint Resolution Disapproving NLRB’s New Union Election Rules

By Daniel Pasternak on March 31, 2015 Posted in NLRB, Trade Unions

For only the fourth time in his presidency, on March 31, President Obama vetoed a joint resolution passed by the Senate and the House of Representatives that disapproved – and would have voided – the NLRB’s new union election rules. (See our prior post summarizing the rules here.) In a “Memorandum of Disapproval,” the President stated that because S.J. Res. 8 would “block modest but overdue reforms to simplify and streamline private sector union elections” and “undermine a streamlined democratic process that allows American workers to freely choose to make their voices heard, I cannot support it.”

The NLRB’s new election rules – derided by business and employer groups as the “ambush” election rules – are scheduled to go into effect on April 14. However, two separate lawsuits challenging the rules remain pending, and decisions in them are anticipated prior to the effective date of the rules.

NLRB Says Employer’s $900,000 Private Settlement Is Insufficient to Escape Unfair Labor Practice Proceeding

By Daniel Pasternak on March 31, 2015 Posted in Arbitration, Class Action, Employment Policies, NLRB, Wage and Hour

Readers of our blog are well aware of the National Labor Relations Board’s position that agreements between employers and employees to resolve employment-related claims on an individual basis through binding arbitration, and which thereby waive or prohibit the bringing of such claims on a class or collective action basis, violate the guarantee in Section 7 of the National Labor Relations Act of employees’ right to engage in protected concerted activity. The Board’s position on this issue started with its 2012 decision in D.R. Horton, Inc., which was subsequently denied enforcement by a federal court of appeals. Doubling down on that loss, in 2014, the Board issued D.R. Horton’s redux in Murphy Oil USA, Inc., in which it stubbornly adhered to its interpretation of the Federal Arbitration Act, despite the near unanimous rejection of that interpretation by every federal and state court to address the issue. Our previous posts in this topic can be found here and here.

In 2013, employees of Flyte Tyme Worldwide filed a class and collective action lawsuit in federal court against the company, seeking allegedly unpaid wages. Flyte Tyme sought to enforce its policy that required that employees individually arbitrate their claims, and thereby avoid class and collective action litigation. The lawyer representing the plaintiffs in that case then filed an unfair labor practice charge with the NLRB, arguing that the policy violated D.R. Horton’s prohibition on class and collective action waivers. Applying D.R. Horton, an Administrative Law Judge thereafter found that the employer’s maintenance and enforcement of its arbitration agreement violated the Act.

Flyte Tyme appealed the judge’s ruling to the Board in Washington, D.C. While that appeal was pending, Flyte Tyme and the employees settled the federal court lawsuit, with Flyte Tyme agreeing to pay $900,000 to the eight plaintiffs in that case and the other class members. Their lawyer then sought approval from the Board of the withdrawal of the related unfair labor practice charge. The NLRB regional office handling the charge noted that it did not oppose that request.

On March 30, a Board panel comprised of the NLRB’s three Democrat members refused to permit the withdrawal of the charge, saying that doing so would not effectuate the purposes and policies of the Act. The panel acknowledged that the settlement fully addressed the private rights of the involved parties, but took issue with the fact that the settlement left in place the employer’s policy requiring that employees waive the right to engage in class or collective action litigation. The panel thus concluded the settlement did not address the “public interest in protecting employees’ statutory right to engage in collective action regarding terms and conditions of employment” and that the continued maintenance of the policy containing the waiver would “continue to have a chilling effect on employees’ Section 7 rights to engage in collective action in the future.”

It’s reasonably safe to presume that when Flyte Tyme agreed to pay $900,000 to settle the federal court litigation, it believed it would be resolving all of the issues with the employees involved. Despite the complete lack of judicial support, the NLRB however has shown no signs of backing away from its position on class and collective action waivers. Thus, its refusal to permit withdrawal of the charge is not altogether surprising. Although it is extremely likely that the employer here will eventually prevail, given that the courts have been nearly uniform in rejecting the Board’s position that class and collective action waivers in arbitration agreements run afoul of Section 7 of the Act, this decision is nonetheless a cautionary tale in that sometimes, even paying close to a million dollars in settlement may not actually result in a complete resolution, and that with the position taken by the Board, additional costs will have to be incurred to truly reach finality.

As of 1 March 2015 Rules of Temporary Allocation of Employees in Slovakia are Changing Significantly

By Squire Patton Boggs on March 27, 2015 Posted in Legislation

On 1 March 2015 the Act No. 14/2015 Coll. came into force. This government-proposed amendment to the Slovak Labour Code was passed by the parliament in the teeth of strong protests by employers and despite the President’s veto.

The amendment is a real game-changer for temporary allocation of employees, so called ‘personal leasing’. The most important changes include a prohibition on the use of temporary allocation staff for the performance of hazardous work, the introduction of a maximum length of temporary allocation (whether in a single contract or a consecutive series) and the introduction of joint responsibility for the worker between the temporary work agency, the employer, and the end user employer. Another significant change is that the definition of ‘dependent’ labour has been changed. which makes proving illegal work easier.

Should you have any questions regarding the above, please contact Peter Devínsky.

UK employers broadly unmoved by advent of Shared Parental Leave

By David Whincup on March 27, 2015 Posted in Employment Policies, Employment Relations, Health & Safety, Legislation

Last month the Squire Patton Boggs Labour & Employment team issued a survey to over 3,000 UK clients and contacts of different sizes and industry sectors in relation to the arrival of the SPL Regulations next month. By way of context, the Regulations have been widely criticised among employers and legal commentators as grossly over-engineered and almost unusable in practice. It is impossible to avoid a faint suspicion that this is a deliberate Government ploy to unite employer and employee through a common enemy to the point where leave arrangements are agreed in dialogue between the parties without reference to the detail of the Regulations at all, since that is a process almost guaranteed to end in tears. We have also heard outwith the survey that some of the larger City employers are seeking to sidestep the procedural minefield represented by the Regulations by providing fathers/partners with benefits comparable to full maternity leave (including enhancements). All well and good for employers which can afford it, of course, but probably not an approach which will be widely adopted.

Pending fuller publication elsewhere, here is a sneak preview of the results of our survey:

Impressively, over 50% of employers claim to be “quite prepared” for the new Regulations. We must however wait to see whether “quite prepared” means (i) we have a policy and some template forms lifted from the internet; or (ii) we actually understand how this will work in practice (see below). Only 17% claim to be “very prepared”, even though the Regulations will bite in earnest in scarcely a week. Over a quarter of the respondents were either not very prepared or not prepared at all.

Of course, this may be a function of the very limited usage which most of the survey respondents seem to anticipate for the SPL regime. It is impossible to avoid the tsunami of employer indifference to the Regulations evident from the survey results:

Only 6% of employers consider that the Regulations will have a material adverse impact on their business, the others falling somewhere between a little impact and none at all. Less than 4% saw SPL as helping retain talent in the workforce which would otherwise have been lost to childcare responsibilities. Nearly two-thirds of respondents thought that 5% or less of their male workforce would take SPL, while 50% thought a similarly tiny proportion of their women would do so. In very bad news for circling lawyers, over three-quarters of employers believed that there would not be a material increase in the number of Tribunal claims, and a whopping 90% that there would not even be any significant growth in employee grievances. All very disappointing.

However, that contrasts starkly with the results for the question on the respondents’ biggest concern regarding the new Regulations. These point clearly to trouble ahead. Over a half said that their main anxiety was simply trying to understand the Regulations and how they might be introduced at work at all, while over a third feared the impact on workflow management of prolonged or discontinuous absences. Maybe they could gain some assistance on both counts from the Acas Guidance to the Regulations – 55% found it either very or moderately useful, but a full third of employers surveyed had not read it at all. Here it is http://www.acas.org.uk/index.aspx?articleid=4911. If in doubt, you should have a look at it – while it does not go into the same hideous layers of detail and sub-detail as the Regulations themselves, it will be a more than decent touchstone in most ordinary cases.

Last, what of making the best of a bad job and turning SPL into a positive for your workforce through some form of enhancement? 17% of employers are working on this already, with nearly a further 50% not ruling it out in due course. Where opinion is much more evenly split is in relation to offering an inducement to return from shared parental leave akin to that often offered to women to return from maternity leave. 24% either will or probably will. 26% think probably not, 26% are sure not, and 24% have not yet decided. Even of those proposing to enhance SPL pay, however, well under a half intend to make an active positive of this in their recruitment efforts.

U.S. Supreme Court Revises Test For Pregnancy-Based Discrimination

By Squire Patton Boggs on March 26, 2015 Posted in Accommodation, Disability Discrimination, Discrimination, EEOC, Employment Policies, Health & Safety, Recent Cases, Sex Discrimination

Court Revives 2008 Pregnancy Bias Suit by Former UPS Employee Who Was Denied Light Duty Work Accommodation

On March 25th, the United States Supreme Court vacated a lower court’s ruling in favor of United Parcel Service, Inc. (UPS) against a former delivery truck driver, Peggy Young, who claimed, among other things, that she was discriminated against on the basis of her pregnancy. Ms. Young alleged that due to medical restrictions associated with her pregnancy, she required and requested that UPS provide her with a light duty accommodation. Although UPS provides such accommodations to certain other non-pregnant employees, here it denied Ms. Young’s request.

In its 6-3 decision, the Court held that there was a genuine factual dispute as to whether UPS provided more favorable treatment to at least some employees whose situation “cannot reasonably be distinguished” from Ms. Young’s —e.g., workers who were unable to lift up to 70 pounds due to other reasons such as a workplace injury or a recognized disability under the ADA.

The Court’s decision dissects the language of the Pregnancy Discrimination Act (PDA). The majority disagreed with both Ms. Young’s and UPS’ proposed interpretation of the statute, instead opting for a middle-of-the-road statutory interpretation (which Justice Scalia colorfully derided in a blisteringly sarcastic dissent as “splendidly unconnected” to the language of the statute and created through the majority’s waiving of their “Supreme Wand”). Although the majority rejected Ms. Young’s argument that UPS’ policy was inherently discriminatory, it held that she could use the traditional McDonnell-Douglas burden shifting framework to establish her prima facie case and raise an inference of intentional discrimination. Specifically, the majority held that a plaintiff could create a triable issue of fact by establishing that the employer’s policies impose a “significant burden” on pregnant workers by demonstrating that the employer accommodated a large percentage of non-pregnant workers while failing to accommodate in the same manner pregnant workers. The Court remanded the case to a lower court to determine whether Ms. Young also could establish whether UPS’ reasons for its failure to accommodate were pretextual.

Notably, during the pendency of this seven-year lawsuit, UPS decided to voluntarily change its internal policy regarding pregnancy accommodations. As of January 1, 2015, UPS makes light duty work available to pregnant workers who have medical restrictions from a physician. Not to be left out, the EEOC also issued new pregnancy discrimination guidance just two weeks after the Supreme Court decided to review Young in July 2014. In its guidance, the EEOC emphasized that “an employer must provide light duty for pregnant workers on the same terms that light duty is offered to employees injured on the job who are similar to the pregnant worker in their ability or inability to work.” The Supreme Court found the EEOC’s interpretation of the PDA unpersuasive, and it appears that in the wake of the Supreme Court’s decision this week, the EEOC will have to revise at least some of its guidance, which is now in part inconsistent with the Court’s decision.

This case serves as a cautionary tale for employers who may have policies similar to that in Young regarding light duty work eligibility and/or reasonable accommodations for pregnant employees. Employers should review their policies to ensure that they do not disparately impact or otherwise discriminate against any protected class, including pregnant workers.

UK holiday pay decision not as clear-cut as it looks

By David Whincup on March 26, 2015 Posted in Contracts, Employment Tribunal, Recent Cases, Wage and Hour

The long-awaited decision of the Leicester Employment Tribunal in Lock -v- British Gas was issued yesterday. It confirmed, as everyone knew, that holiday pay would have to include an element in respect of commissions, but it also provides for the first time a steer (using the word advisedly, for it is actually no more than that) as to how that element should be calculated.

The Employment Judge indicated that the Working Time Regulations should be read as if amended to include a provision that “…a worker…whose remuneration includes commission or similar payments shall be deemed to have remuneration which varies with the amount of work done…“. The consequence of that, going via section 221 Employment Rights Act 1996, is that holiday pay should be calculated on the basis of the employee’s average earnings over the preceding 12 weeks.

However, before we all run off and rewrite our employment contracts to that effect, let us look at this decision in more detail, for all is not as clear as it sounds. There is a more than decent argument that this new formulation will be used to advance claims for employees which the case does not actually support. In particular:

This is an Employment Tribunal ruling. It does not therefore have any precedent value even for other Tribunals, so a different Employment Judge could easily and unappealably reach a different conclusion on similar facts. This ruling itself may well be appealed.
We do not know what the Judge meant by “similar payments”. While he went out of his way to stress that his decision did “not concern whether any other form of remuneration (such as discretionary bonuses, for example) ought to be taken into account in determining holiday pay“, he was equally clear that he saw no meaningful distinction in principle between commission and non-guaranteed overtime, suggesting that overtime payments ought also to be included in that 12 week average.
The decision related to the calculation of holiday pay only for the first four weeks’ minimum leave granted by the original Working Time Regulations, and not the extra 1.6 weeks added subsequently. Whether that is a point most employers will consider worth taking is of course a moot point.
Most importantly, indeed crucially, the Lock case is decided on its own facts. These included the agreed position that when Mr Lock was away on holiday, he did not generate any commissions, and that as a consequence he was paid a reduced remuneration on his return. In other words, it was established as fact that Mr Lock’s absence prejudiced his commission earnings. In a case where that causal link from absence to reduced commission income cannot be established, it remains entirely arguable that this decision should not be applied at all, and the same should apply in relation to non-guaranteed overtime.
For example, even if the employee did do overtime one or two nights in the 12 weeks preceding his holiday, that in no sense means that he would have done so during his absence, and yet this formulation would entitle him to some credit for it nonetheless. Even if the commission or overtime payment related to a particular set of circumstances which would absolutely not have recurred during his absence – the overtime related to completing a project now over, for example, or the next sale likely to attract commission was months away – the employee would still receive a payment for it. Equally, if he were lucky enough to be paid for a whopping and unrepeatable deal in those 12 weeks, his holiday pay would then be inflated far beyond anything he would have earned if he had not gone away.
In our submission, these are circumstances which cannot be treated as dealt with by the Lock It must remain open to an employer to argue that an employee’s absence did not materially or quantifiably affect his commission earnings, or not to the extent which a bald averaging under s221 would suggest). In those circumstances, the s221 ERA 12-week average approach taken in Lock will produce a serious injustice. As we said here, the burden should be on the employee to prove the link between holiday absence and reduced earnings in the first place, and employers should feel entitled not to take that as read, either at all or at the level claimed for. If you don’t think that your employee has lost out by taking holiday, you can still run that argument. The Lock decision does not alter that.

A $3 million reason for Australian employers to review their contracts and policies – now!

By Squire Patton Boggs on March 25, 2015 Posted in Contracts, Employment Contracts, Employment Policies, Redundancy, Severance Pay

There’s never been a more opportune time for employers in Australia to review their contracts and policies than now, with the NSW Supreme Court this week awarding more than $3 million to a chief executive after finding his employer’s redundancy policy was incorporated into his employment contract.

Mr James was the CEO at ABN AMRO up until 2008 when a merger with the Royal Bank of Scotland saw his position become redundant. Under the terms of his employment contract he agreed to ‘be bound’ by ABN AMRO’s policies, which included the bank’s Redundancy Policy.

The policy was described as a ‘closed policy’ meaning that, while its existence was no doubt known to Mr James, its terms were not. They were not available on the bank’s intranet and even the deputy head of HR said that if an employee had asked about the detail of the redundancy policy, she would not have disclosed it. The bank argued that the unavailability of the policy together with the fact that Mr James’ employment contract contained no promise by ABN AMRO to ‘be bound’ by any of its policies spoke against the contractual effect of the Redundancy Policy.

The Court disagreed, reaffirming the principle of objectivity in determining the rights and liabilities of parties to a contract. What matters is not the parties’ subjective beliefs or understandings, but what one party’s words and conduct would lead a reasonable person in the position of the other party to believe.

In this case, looking at the matter objectively, it was difficult to conclude that the parties would have intended only one of them – Mr James – to be bound by the policies. Furthermore, the language used in the employment contract was ‘the language of contract’, with the employee agreeing to be bound by the relevant policies. As a matter of common sense, it followed that the Redundancy Policy would also bind the employer.

James v Royal Bank of Scotland; McKeith v Royal Bank of Scotland [2015] NSWSC 243 (19 March 2015)