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Q: “Legal advice that we read often requires us to be reasonable. What exactly does that mean?”
A: A reasonable action is one that falls within the range of actions that a reasonable employer might take. In practice I think that for "reasonable employer" you can read "most employers". As an example, if an employee were to take home a company notepad, you could dismiss for gross misconduct because he removed company property without permission.
Some employers might agree with your action but most would not. So dismissal would not be a reasonable action. If you are faced with having to be reasonable but are not sure what to do, have a word with a few managers or employers who have no interest in the matter. Their general view is likely to reflect what is reasonable.
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