McKeith v Royal Bank of Scotland Group Plc; Royal Bank of Scotland Group Plc v James

The case of *McKeith v Royal Bank of Scotland Group Plc; Royal Bank of Scotland Group Plc v James* was heard in the Court of Appeal of New South Wales. The dispute concerned whether the Royal Bank of Scotland Group Plc (RBS) and its takeover bidder had contractually bound themselves to continue applying RBS's redundancy policy to employees. Employees alleged that the redundancy policy was either expressly incorporated into their employment contracts, promised to be continued by the bidder, or incorporated through a course of dealing. A further issue was whether RBS was entitled to withhold ex gratia bonuses under the redundancy policy unless employees signed deeds of release.

The court was required to determine several legal issues. These included whether the redundancy policy formed part of the employees' contracts of employment, either expressly or through a course of dealing. The court also had to consider whether the takeover bidder made contractual promises regarding the continued application of the policy, and if so, whether these promises were made with contractual intention and supported by consideration, such as employees performing acts in reliance on those promises. Finally, the court had to assess the validity of RBS's condition that employees sign deeds of release before receiving ex gratia bonuses under the redundancy policy.

The court's reasoning, as indicated by the judgment, involved an analysis of contract law principles, particularly concerning the incorporation of policies into employment contracts and the formation of contractual promises. The judges considered whether the conduct of the parties and the representations made demonstrated an intention to create legal relations and whether there was sufficient consideration for any alleged promises. The court also examined the nature of ex gratia payments and the conditions that could be attached to their disbursement.

The judgment indicates that the court was not making final orders on the substantive dispute at that stage. Instead, it directed the parties to file and serve written submissions and draft orders to give effect to the reasons for judgment and to address costs. The parties were encouraged to reach agreement on outstanding issues, with any remaining disputes to be determined on the papers.