Mallone v BPB Industries plc [2002] EWCA Civ 126 is a UK labour law case, concerning control of an employer's discretion.
Mr Giovanni Mallone claimed compensation for BPB plc unreasonably withdrawing his share options after being dismissed.
That was, he stated (albeit this was not a matter in evidence), greatly more than an executive in his position would have received by way of compensation under English law.
Mr Randall accepted and indeed said he adopted that reasoning, but in a case such as the present sought to argue that irrationality could best be judged by the standard of good faith, viz.
Having considered Abu Dhabi National Tanker Co v Product Star Shipping Ltd (The Product Star) (No 2) [1993] 1 Lloyd ’ s Rep 397 and Gan Insurance Co Ltd v Tai Ping Insurance Co Ltd (No 2) [2001] 2 All ER (Comm) 299, this court adopted the solution of those two earlier decisions which was to apply a less restricted limitation analogous to unreasonableness in the Wednesbury sense: Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223; or what Mance LJ in the latter case called “ unreasonableness in the sense of conduct or a decision to which no reasonable person having the relevant discretion could have subscribed” (at para 64).
Mr Randall submitted that because there was no fi nding of dishonesty, improper motive, capriciousness or arbitrariness against BPB in this case, therefore the judge must have been mistaken to have found that the committee’s decision had been one that “no reasonable employer could have reached” (see at para 28 above).
But I think that someone may act irrationally while being honest; and as Burton J suggested in Clark v Nomura , capriciousness is something else (eg deciding on the basis of the colour of someone ’ s hair or eyes).
The proviso indicates that, at any rate prima facie and subject to the director’s discretion, the appropriate proportion is to be found by taking the length of the participant ’ s service following the grant of an option.Wilson J and Waller LJ agreed.