In Chandrashekarappa v Wipro Ltd [2026] EAT 73, the Employment Appeal Tribunal considered whether an employee was entitled to an uncapped sales bonus after his employer introduced a payment cap and additional approval requirements following approval of the award. The employee argued that he had already satisfied the bonus conditions originally communicated to him and that his entitlement had arisen before those new restrictions were introduced. The Employment Tribunal dismissed his unlawful deduction from wages claim, finding that no legal entitlement arose until the employer formally communicated the capped bonus.
The EAT allowed the appeal. It held that the Tribunal had placed undue weight on a manager's later belief that further approval was required, rather than considering the bonus terms originally communicated to employees and the approval that had already been given. Once the employer had exercised its discretion in accordance with those communicated terms, it could not subsequently "move the goalposts" by imposing additional approval requirements or applying a payment cap that had not previously formed part of the scheme.
Rather than remitting the matter, the EAT substituted its own decision. It held that the employee was entitled to receive 1% of the first year's revenue generated from the client contract, less the amount already paid, confirming that the later cap could not lawfully reduce the bonus entitlement.
How would Lex HR have assessed this case before Tribunal?
To test Lex HR's Employment Tribunal Risk Analyser, we recreated a workplace scenario based on the facts reported in Chandrashekarappa v Wipro Ltd [2026] EAT 73. All references to the Tribunal's findings, compensation award and appeal outcome were removed before the scenario was analysed by Lex HR. The assessment below shows the claims Lex HR identified and the likely Tribunal outcomes based solely on those underlying facts.
Lex HR Employment Tribunal Risk Analysis
| Potential Employment Tribunal claim | Lex HR assessment | Risk score |
|---|---|---|
| Unlawful deduction from wages (underpaid kitty bonus) |
Likely to succeed. The bonus terms originally communicated to employees stated that up to 1% of first-year invoiced revenue could be paid, subject to Sector Lead approval. The employee secured the major client, the Sector Lead approved the award in accordance with those terms, and the employee was told approval had been given. A Tribunal is likely to find that, once those communicated conditions had been satisfied, the employee's entitlement had crystallised, with only the calculation of the payment remaining once first-year revenue became known. The later attempt to introduce additional approval requirements and a payment cap is likely to be viewed as an impermissible attempt to change the scheme after entitlement had already arisen. On those facts, the capped payment is likely to amount to an unlawful deduction from wages rather than a lawful exercise of discretion. |
9/10 ■■■■■■■■■□ |
| Breach of contract / failure to pay contractual bonus entitlement |
Likely to succeed on liability, subject to Employment Tribunal jurisdiction. The employer's communications and subsequent approval are likely to be viewed as creating an enforceable entitlement to the bonus on the original terms. Although the employer may argue the scheme remained discretionary, Tribunals are likely to focus on what employees were told, what approval process applied, and whether new conditions were introduced only after the employee had already qualified. The later payment cap and revised approval process are likely to be treated as retrospective changes rather than terms that formed part of the original bonus arrangement. If the Employment Tribunal has jurisdiction, the employee would have strong prospects of recovering the unpaid balance. |
8/10 ■■■■■■■■□□ |
| Failure to exercise bonus discretion lawfully |
Likely to succeed if advanced as part of the wider bonus dispute. Even where an employer retains discretion over bonus payments, that discretion must be exercised consistently with the scheme that has been communicated and not arbitrarily or irrationally. Here, the employee achieved the required commercial outcome and obtained the specified approval before the employer sought to impose further approval requirements and a payment cap. Internal disagreement about whether those additional conditions had ever formed part of the scheme further weakens the employer's position. While the employer may argue that the scheme remained discretionary throughout, a Tribunal is likely to conclude that any remaining discretion had already been exercised. |
7/10 ■■■■■■■□□□ |
| Constructive unfair dismissal |
Unlikely on the available facts. Although the handling of the bonus could potentially amount to a serious contractual breach, the scenario does not indicate that the employee resigned in response or pursued a dismissal claim. Without a resignation linked to the alleged breach, a constructive unfair dismissal claim would not succeed. The more appropriate claims on these facts concern recovery of the unpaid bonus rather than termination of employment. |
2/10 ■■□□□□□□□□ |
How did Lex HR compare?
Using only a reconstructed workplace scenario based on the facts reported in Chandrashekarappa v Wipro Ltd [2026] EAT 73, Lex HR identified an unlawful deduction from wages claim as presenting the highest litigation risk. It concluded that the employee's entitlement to the bonus had most likely crystallised once the original bonus conditions were satisfied and the Sector Lead approved the award, and that the employer was unlikely to be able to retrospectively introduce additional approval requirements or a payment cap. The Employment Appeal Tribunal reached the same conclusion, holding that Wipro could not "move the goalposts" after the employee had met the originally communicated criteria. Lex HR also correctly identified that any constructive unfair dismissal claim was unlikely on the available facts, demonstrating its ability to distinguish the strongest legal claim from weaker alternative causes of action.