In October 2013, a landlord in Westminster let a basement gym to a personal trainer. The residential leaseholders of Romney House had previously enjoyed exclusive use of the facility; now they shared it, but still paid 100% of the service charge costs. When they challenged the arrangement, the case eventually reached the Court of Appeal — and Nugee LJ used it to make a point about contractual discretions that employment practitioners should notice.
Bradley & Anor v Abacus Land 4 Ltd [2025] EWCA Civ 1308 concerns service charges under a residential lease, not employment at all. But its treatment of the Braganza duty — and what it means when a contract expressly qualifies a discretion with a "reasonably" or "acting reasonably" requirement — is directly relevant to employer decisions on contractual sick pay, discretionary bonuses, and any other contractual power the parties have chosen to fetter with an express reasonableness standard.
The Braganza Baseline
In Braganza v BP Shipping Ltd [2015] UKSC 17, Lady Hale confirmed that every contractual discretion carries an implied rationality constraint. The employer cannot exercise it arbitrarily, capriciously, or irrationally. The implied term imports both limbs of Wednesbury into contract: the decision-maker must consider only relevant matters and exclude irrelevant ones; and the outcome must not be one that no rational decision-maker could reach.
The facts were stark. BP determined that its Chief Engineer, who disappeared at sea, had committed suicide — a finding that excluded his widow from contractual death-in-service benefits. The Supreme Court held the process was flawed. BP had treated suicide as a conclusion to be reached rather than as an inherently improbable event requiring cogent evidence proportionate to its gravity.
Since 2015, the Braganza duty has become routine in employment litigation. Decisions to withhold contractual sick pay, to determine that an employee is not genuinely ill, or to decline a discretionary bonus can all be attacked on Braganza grounds.
The Question Bradley Asks
What happens when the contract goes further? Not merely conferring a discretion, but expressly requiring it to be exercised "reasonably" or "acting reasonably"? Does the additional qualifier change the standard of review?
The Upper Tribunal in Bradley thought it did. It held that "acting reasonably" required objective reasonableness — meaning the tribunal should form its own view of what a reasonable landlord would have done and substitute that view if the actual decision diverged.
Nugee LJ disagreed. But he also declined the opposite extreme — that "acting reasonably" is simply coextensive with the bare Braganza rationality floor implied into all discretions anyway.
The Middle Ground
The Court of Appeal's formulation is precise. A discretion expressly qualified by "reasonably" is not exercised improperly merely because the tribunal would have decided differently. The question is whether the decision was one that a reasonable decision-maker in that position could have reached — not what the tribunal itself would have decided.
Nugee LJ put it in terms that will resonate with employment practitioners: "The very fact that the [party] is given a discretion indicates that where there is a range of possible views, it is the [party] who is entitled to choose between them. It is not therefore a question of how the [tribunal] would have chosen had the decision been for them, but of whether the [party's] choice was outside the range of permissible decisions."
He was explicit that "objective reasonableness" is inapt language because it implies the tribunal is the primary decision-maker. The contract allocated the decision to one party. The tribunal's role is to police the outer boundary of permissible choices, not to conduct its own primary assessment.
At the same time, the word "reasonably" is not empty. An express reasonableness qualification does something beyond the bare rationality floor implied by Braganza. The range of permissible choices is genuinely constrained: positions that a reasonable person in that role could not adopt will fall outside it and breach the contract.
Why This Matters in Employment
Three employment contexts stand out.
Contractual sick pay. Where a contract gives an employer discretion to determine entitlement to enhanced sick pay — and expressly requires that determination to be made "reasonably" — Bradley shapes the scope of a tribunal challenge. The question is not what the tribunal would have decided on the medical evidence. The question is whether the employer's decision fell within the range of choices open to a reasonable employer in that position. A decision to withhold pay from an employee with strong uncontradicted medical evidence in their favour may well fall outside that range. A contested clinical picture, resolved on defensible grounds, is harder to disturb.
Discretionary bonuses. Discretionary bonus clauses regularly attract Braganza scrutiny. Where the contract says bonuses are payable "in the employer's reasonable discretion," Bradley confirms the tribunal is not in the business of substituting its own valuation of the employee's performance. It examines whether the employer considered relevant factors, excluded irrelevant ones, and landed within the range. A nil bonus in circumstances of demonstrably strong performance might be reviewable. A below-expectation bonus reached through a coherent and documented process is considerably more difficult to attack.
Disciplinary and investigatory decisions. Less commonly, contracts expressly require that disciplinary outcomes or investigatory findings be reached "reasonably." On Bradley's analysis, demonstrating a breach requires showing the outcome fell outside the range of reasonable responses — a test that will be familiar to employment practitioners from unfair dismissal, where the band of reasonable responses has long served the same structural function. The conceptual alignment is not accidental.
The Practical Takeaway
Bradley does not displace Braganza. It maps the relationship between the implied rationality floor and any express reasonableness standard the parties have layered on top. The floor is rationality. An express qualifier raises the standard — but not to the point of primary substitution.
For practitioners advising claimants: the temptation when a contract says "reasonably" is to argue that the tribunal should form its own view of what was reasonable and substitute it for the employer's decision. Bradley closes that route. The question is not what the tribunal would have decided — it is whether the employer's decision fell outside the range available to a reasonable employer in that position. That is a harder argument to run, and the evidence needs to be strong enough to show the decision was not merely imperfect but genuinely outside the permissible range.
For practitioners advising respondents: a discretion exercised through a coherent process, on relevant grounds, and landing within a defensible range will be hard to disturb even if the tribunal would have decided differently. Document the process. Record the factors taken into account. Show the reasoning, not just the conclusion.
A service charge dispute about a basement gym in Westminster has, somewhat improbably, produced the clearest articulation yet of what it means to exercise a contractual discretion "reasonably." Employment practitioners would do well to keep it in mind.