Employment Tribunal Overturns Decision on "Moved Goalposts" Bonus Claim
The Employment Appeal Tribunal ruled an employer could not retroactively cap a bonus after it had been approved under the original scheme terms.
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The Employment Appeal Tribunal (EAT) has ruled in favour of a former employee, Mr Chandrashekarappa, in a significant dispute over an unpaid bonus. The case, heard by Bruce Carr KC, highlights the legal limitations on employers attempting to alter discretionary bonus terms after they have been communicated and satisfied.
The Dispute Over the "Kitty Bonus"
The claimant, a former employee of Wipro Limited, brought a claim for unlawful deduction from wages. In March 2020, staff were informed of a "kitty bonus" scheme offering up to 1% of new logo invoicing. Following the successful securing of a contract with the John Lewis Partnership, the relevant Sector Lead approved the full 1% commission for the claimant.
However, the company subsequently attempted to impose a $150,000 cap on the payment, claiming that further management approval was required and that the bonus was discretionary. The initial Employment Tribunal (ET) sided with the employer, suggesting the entitlement did not crystallise until a final, capped amount was declared.
Tribunal Finds Employer "Moved the Goalposts"
On appeal, the EAT found that the original tribunal had erred in its legal analysis. The judgment clarified that once the terms were presented and the claimant fulfilled his obligations, a legal entitlement was established. The EAT emphasised that the employer could not unilaterally introduce new conditions, such as higher-level approvals or a financial cap, after the bonus criteria had been met.
The EAT rejected the employer's argument that the bonus remained entirely discretionary until a formal, capped declaration was made. Instead, the judge noted that the employer was effectively "moving the goalposts" to the detriment of the employee.
Key Takeaways for Employers
This ruling serves as a stark reminder for businesses regarding the communication of incentive schemes. When employers set out specific bonus parameters, they may be bound by those terms once an employee has acted upon them. Attempts to alter these arrangements after the fact, without clear contractual provision, risk being found unlawful by the courts.
The EAT substituted the ET's original finding, confirming the claimant's right to receive the full 1% commission, minus the $150,000 already paid.
Read the entire judgment here: Chandrashekarappa v Wipro Ltd [2026] EAT 73
