Employment Law Digest June 2026: Case law update

Wrongful dismissal – the circumstances surrounding misconduct

In XX v YY:

• The claimant was an assistant head teacher.
• She had been in a coercive and controlling relationship during which she was persuaded to send a message of a sexual nature to someone she understood to be a boy under the age of 18.
• It was accepted by her employer that she feared that if she didn’t send the message, she and her children would be at serious risk of harm.
• She did not report the incident or take any steps in accordance with the respondent’s safeguarding policies and procedures in the 18 months after she sent the message.
• The matter only came to light when it was reported to the school by her former partner.
• Following a disciplinary process, the claimant was summarily dismissed.

In the Employment Tribunal (ET), she brought claims for disability discrimination (related to a recurrent depressive disorder as a result of which she was vulnerable to coercive control), unfair dismissal and wrongful dismissal. All her complaints failed.

She pursued an appeal to the Employment Appeal Tribunal (EAT), which was limited to the wrongful dismissal complaint.

In the ET, the claimant’s case was that the duress she was under took the message outside the realms of gross misconduct.

The ET considered that repudiatory breaches of employment contracts are to be determined on an objective basis, and that it is not necessary for someone to intend to commit the breach. As a result, the sending of the message (and failure to report it) was, objectively speaking, a repudiatory breach of contract and the motives did not affect that.

The ET found that the explanation of duress may, in that context, be a reason why the respondent chooses not to dismiss but it does not deprive the respondent of the right to dismiss.

The ET therefore found that even though her breach of contract was committed under duress, the claimant was in repudiatory breach of contract. The respondent then had the right to summarily terminate the contract, which it did. The respondent did not breach the claimant’s contract in dismissing her without notice. The claimant was not wrongfully dismissed.

The EAT disagreed and upheld the appeal:

• The ET had analysed the complaint on the basis that pressure or duress was irrelevant to whether there had been a breach by the claimant that entitled the respondent to terminate the contract. That was an error.
• The ET was required to consider, in determining whether the claimant was guilty of gross misconduct, the circumstances of the breach so far as they would affect an objective assessment of whether the conduct should be treated as undermining trust and confidence such that the respondent could no longer be required to retain the claimant in its employment. The ET should have considered the duress asserted by the claimant.
• The ET was also entitled to have regard to the fact that the claimant was employed in a senior position as an assistant head teacher who was aware of her safeguarding obligations. While pressure/duress may be significant in analysing her conduct, it was potentially of less significance in the consideration of her failure to report the matter in the 18 months after the message had been sent, before the matter came into the open because her former partner reported it to the respondent. As part of the circumstances, the EAT also noted it may be relevant that the claimant did not appear fully to accept her responsibilities.
• The EAT allowed the appeal and sent the case back to the same ET to reconsider the question using the correct legal test.

Summary dismissal cases are fact sensitive but this case is a reminder that employers need to consider not only what happened, but also whether the surrounding circumstances are relevant to whether the conduct amounted to gross misconduct entitling dismissal without notice.

Unfair dismissal – Reducing compensation for contributory conduct and considerations around reinstatement

In DHL Services Limited v Ignatowicz:

• The claimant was employed by DHL as a warehouse colleague. He applied for and was interviewed for a warehouse administration clerk role but was unsuccessful.
• The claimant raised a grievance about the recruitment process. He then posted the grievance on Facebook and added comments to the post including that “capitalist dictatorship is evil and it has to be destroyed”.
• The recruiting manager, Ms Chmielewska was made aware of the post. She reported it to her manager. The claimant was not asked to take down the post.
• The claimant then put a further post on Facebook in which he referred to the surname of the recruiting manager being similar to Chmielnicki (a controversial figure in Polish history responsible for a massacre of Jewish and Polish people). The post was concluded by the claimant that he hoped these were signs that God would destroy his enemies.
• Following an investigation meeting at which he was provided with a copy of DHL’s email and internet policy and its disciplinary policy, the claimant took down the first post.
• The claimant was invited to attend a disciplinary hearing. The disciplinary charge related only to the first post.
• The claimant apologised and acknowledged that he had caused a problem. He stated he wanted to fix the problem and said he wouldn’t do it again.
• The claimant was dismissed for gross misconduct.
• He appealed his dismissal and posted again on Facebook with details about his appeal including the email address of the appeal officer and suggesting that the dismissing officer was either incompetent or did not have “good mental health”.
• He then put further posts on Facebook (it wasn’t clear whether this was done before the appeal), including one which stated that if he did not get his job back he would put his post back up on Facebook and would not be able to predict how he would behave due to poor mental health.
• The claimant’s appeal was dismissed and part of the reasoning was the fact that he had posted about his dismissal and the content of his appeal.

The Employment Tribunal (ET) found that the claimant had been unfairly dismissed.

The ET concluded that the claimant had not been sent the relevant email and internet usage policy, had not been trained on the social media guidelines and had not been asked to remove the Facebook post (contrary to the policy). The ET found that the respondent had not investigated an example of different treatment highlighted in the claimant’s appeal and had not given proper consideration to mitigation or considered a lesser sanction despite his clean disciplinary record and length of service. Further, the respondent ignored that the claimant did remove the post when he became aware it might breach the email and internet usage policy at the investigation stage. In addition, the ET found there was little evidence of detrimental impact on DHL caused by the post and no evidence that it had attracted the attention of the wider public.

When deciding compensation, the ET reduced the compensatory award by 10% for the claimant’s contributory conduct (to take account of the fact that the claimant had publicised his grievance) and ordered his reinstatement to the respondent’s employment.

The Employment Appeal Tribunal (EAT) upheld the employer’s appeal on remedy, finding that the ET had made an error in its approach to both contributory conduct and reinstatement:

• When considering contributory conduct, the ET had limited its analysis to the fact of the claimant posting the content of the grievance online. The EAT found that for the purpose of any reduction in the basic award, the ET should have analysed whether the claimant was guilty of any culpable or blameworthy conduct in respect of the posts which predated the dismissal. For the compensatory award, the ET should have analysed the extent to which some or all of the Facebook posts caused or contributed to the dismissal by being taken into account at the disciplinary or appeal hearing and, if so, decreased the compensatory award by such proportion as it considered just and equitable. This included conduct known to the employer which contributed to the appeal decision, since the appeal is a necessary element in the overall process of terminating employment.
• When considering reinstatement, the ET is required to take into account (1) whether the claimant wishes to be reinstated, (2) whether it is practicable for the employer to comply with an order for reinstatement and (3) if the claimant caused or contributed to some extent to the dismissal, whether it would be just to order reinstatement.
• The EAT found that the ET considered whether they thought reinstatement was practicable, rather than whether the employer genuinely and rationally believed it could no longer have confidence in the claimant. It was incumbent on the ET to consider how the staff of the respondent had been affected by the Facebook posts and the claimant’s conduct in the litigation.
• The ET had incorrectly considered whether the contributory conduct was such that it prevents reinstatement being practicable. The ET was required to consider whether, having regard to the claimant’s contribution to his dismissal, it would be just to order his reinstatement.
• In sending the case back to the ET, the EAT noted that since the ET hearing, the claimant had made further comments that may be thought to be wholly unacceptable. This included a post suggesting that when someone wins an ET claim, the punishment for the managers involved should be that they are on their knees and have “several slaps in face with a stick”. The EAT stated that the ET would have to consider these comments in assessing whether DHL genuinely and rationally believes it can no longer have confidence in the claimant, such that reinstatement is not practicable.

Unlawful deductions from wages – bonus entitlement

In Chandrashekarappa v Wipro Ltd:

• The Claimant was employed in Wipro’s Cloud and Infrastructure Services (CIS) Division.
• Incentive arrangements providing for varying bonus entitlements were set out for each financial year.
• In March 2020, the claimant attended a presentation which communicated that a “kitty bonus” of up to 1% of new invoicing in the first 12 months could be paid to CIS role holders contributing to deal wins based on Sector Lead Head (SLH) approval.
• The claimant’s line manager told him that if he secured a contract with the John Lewis Partnership (JLP) he would receive this bonus and it would probably make him one of the highest-paid salespeople globally.
• When the JLP deal was signed, the claimant’s line manager wrote to the SLH putting the claimant’s name forward for the 1% commission on the deal.
• The SLH replied: “I am ok. Go ahead” and so the line manager forwarded this correspondence to the Head of HR along with a message saying “pls inform the relevant folks.” The claimant then received a phone call from his line manager in which he was told that the SLH had “provided his approval immediately and without hesitation” albeit that there was no mention at that point of the amount of the bonus as the first year’s invoicing from JLP was not yet known.
• On 14 July 2020, the line manager wrote to the SLH and Head of HR with suggested wording to go into a congratulatory email to the claimant, which would accompany the payment of the kitty bonus. The SLH responded that he would “only send when the gods [i.e. more senior managers] approve that this is approved.” The Head of HR’s reply was that he was “getting the details on mechanics of the payout so that we can set clear expectations.”
• The next day, the Head of HR asked a colleague to prepare an email of congratulations to go the claimant. He also wrote to the head of the HR section that dealt with compensation and benefits, asking her to “share the approach” so that they could send the email to the claimant. She responded with a note which stated that “…The reward is based on approval from Nag – Head of DOP&CIS ” and the cap applied on the payout is USD 150K p.a…”
• This was the first point at which it had been suggested that approval from “Nag” – the Head of Global CIS and DOP was needed for the award of the kitty bonus and it was also the first reference in the context of the kitty bonus, to the existence of a cap of $150,000.
• In December 2020, the claimant was informed he would be paid the bonus and that it would be capped at $150k.
• The bonus was paid in February 2021 at the capped amount.
• The claimant did not question his entitlement to the kitty bonus until July/August 2021. JLP revenues for the first year were not known until December 2021 when it was established that if the claimant was entitled to 1% of that figure, this would come to £516,082, instead of the $150,000 which he was paid.

The claimant brought a claim for unlawful deductions from wages. His claim was dismissed as the ET found that any legal entitlement had not crystallised until December 2020 when the decision was formally communicated and that was at the capped amount.

The Employment Appeal Tribunal (EAT) allowed the claimant’s appeal finding that:

• The ET made an error in law in treating the SLH’s view that further approval was required as determinative of the question of entitlement to the kitty bonus and by concluding that the cap could belatedly be introduced.
• On a correct analysis of the position, the employer had put forward terms under which the discretionary bonus would be awarded and those terms had been satisfied by the claimant.
• It was not open to the employer to then “move the goalposts” by attaching further conditions to his entitlement after the original terms had been outlined to him and after those terms had been satisfied.
• The claimant was entitled to 1% of the JLP year one revenue less the sterling equivalent of $150,000 that was paid to him.

This case serves as a reminder that once bonus criteria has been set and satisfied, an employer cannot later “move the goalposts” by imposing new approval requirements or caps that were not part of the original arrangement. Bonus conditions must be communicated clearly and at the outset.