Our July 2026 edition provides the usual round-up of interesting case law and legal updates, including new data protection obligations and corporate criminal liability for organisations, and cases on duress to commit misconduct. We have also seen new consultations launched on time off for public duties and how the Fair Work Agency should approach enforcement of holiday pay entitlements.
Case law update
Unlawful deduction from wages: The Employment Appeal Tribunal (EAT) has upheld an appeal by an employee in an unlawful deduction from wages claim, awarding a £500,000 bonus in place of the £112,000 bonus which the employer had paid. The claimant, a salesman, was told of a discretionary bonus of up to 1% on revenue from new business in the first year, subject to approval from the sector lead. However, subsequently the bonus was made subject to secondary sign-off and a financial cap of £112,000, prompting the claim. The case serves as a reminder to employers of the need to have clear terms for an incentive scheme and not to “move the goalposts” by attaching further conditions after the terms had been provided and satisfied. (Chandrashekarappa v. Wipro Ltd)
Wrongful dismissal – duress: The EAT has concluded that whether an employee is under duress when committing misconduct is a relevant factor in determining if that misconduct justifies summary dismissal. In this case, the claimant, a head teacher, sent sexual messages to a person she understood to be a boy aged under 18, having been persuaded to do so by someone with whom she was in a controlling and coercive relationship. She did not report these messages to her employer, but 18 months later they were brought to her employer’s attention by her abusive partner. She was summarily dismissed. Her claim for wrongful dismissal failed, with the Employment Tribunal (ET) saying that the duress or pressure she was under was irrelevant to whether summary dismissal was justified. The EAT disagreed and allowed the appeal on the basis that duress was a relevant factor that should have been taken into account as part of the wider circumstances. The case has been referred back to the original ET to be reconsidered. (XX v. YY)
ET procedure – extending time to file a response: Acting as a cautionary tale for employers about the adequacy of their internal processes, the EAT has upheld a decision to refuse an extension for filing a response where it was submitted 10 months after the deadline. The employer argued that it was unaware of the claim until the head office received notice of a preliminary hearing, yet evidence showed that postal correspondence to the claimant’s place of work had been ignored and email correspondence from the ET to the general manager had been deleted. The appeal turned on the factors relevant to exercising discretion to extend time, but more generally highlights the need for employers to have a reliable process for dealing with correspondence from the ET, ensuring people know how to identify important ET documentation, and to make sure it reaches the right people. This is especially important in multi-site businesses where a local site may receive correspondence that is handled by head office based elsewhere, as in this case. (Costco Wholesale UK v. Nash)
Payslips: All workers have a right to be “given” a written itemised payslip, and in an important decision the EAT has confirmed that this does not need to be a physical document; the requirement is capable of being satisfied by allowing access to digital payslips through an app or web browser, providing that access is not restricted by reason of, for example, cost, technical barriers, or another impediment. A free access site that a worker could access but chooses not to is sufficient for them to have been “given” their payslip. (Leedham v. Royal Mail Group Ltd)
Vicarious liability: The Court of Appeal has concluded that a pub operator was not vicariously liable for the serious assault of a customer by two doormen. The doormen were employed by a third-party security company which, on a thorough analysis, was a true independent contractor. As such, the relationship between the pub and the doormen was insufficient to amount to being “akin to employment”. As the security company had dissolved, the victim of the assault was left without remedy. (Burger v. Risk Solutions BG Ltd and JD Wetherspoon plc)
Restrictive covenants: Reminding employers of the importance of tightly drafted post-termination restrictions, the High Court has ruled that an area sales manager’s six-month non-compete was void as a restraint of trade. The High Court accepted that the claimant was an exceptional salesman and that his former employer had legitimate business interests to protect. However, the court was critical of the geographical scope of the clause – contrary to assertions that it limited the claimant working at a competitor’s branch within 20 miles of any of his former employer’s branches he’d had responsibility for, it in fact prevented him from working for a competitor anywhere in the UK. The court also deemed the carve-out provisions to be ineffective and was critical of a six-month restriction relative to a one-month notice period. (Huws Gray Ltd v. Gentleman)