Betancourt v UKRI: wrongful dismissal and the least burdensome performance rule

The Employment Appeal Tribunal has allowed an appeal in Betancourt v United Kingdom Research and Innovation [2025] EAT 148, finding that whilst the claimant was wrongfully dismissed, he was entitled to no compensation due to the application of the least burdensome performance principle.

Mr Betancourt was employed under a contract containing a probationary period with a five-week notice provision and a garden leave clause, but critically, no payment in lieu of notice (PILON) clause. Following what was described as a first probationary meeting, he was dismissed with immediate effect and paid five weeks' salary.

The Employment Tribunal initially held that the dismissal was not wrongful. However, His Honour Judge James Tayler found this conclusion erroneous. The absence of a PILON clause meant the employer had no contractual right to terminate employment immediately with payment. The dismissal therefore constituted a breach of contract.

The appeal turned on whether this breach entitled the claimant to damages. The respondent's Probation Policy provided for two review meetings generally conducted over six months, creating a structured assessment process designed to address underperformance. Judge Tayler questioned what purpose the five-week notice provision served if the employer was always required to maintain employment until both probationary assessments were completed.

The judgement examined the established principle that damages should reflect losses sustained by an employer's decision to repudiate unlawfully, rather than losses had the employer proceeded to terminate lawfully in the manner least burdensome to itself and least profitable to the employee. This doctrine, traceable to Cockburn v Alexander (1848) and recently endorsed in Geys v Société Générale [2013] ICR 117, has been consistently applied for over 150 years.

Judge Tayler distinguished cases involving single obligations with discretionary performance from those involving alternative methods of contract termination. Where a contract provides alternative termination methods, the least burdensome approach applies straightforwardly. The position differs where contracts impose single obligations requiring good faith exercise of discretion, as demonstrated in bonus cases like Lavarack v Woods [1967] 1 QB 278 and Horkulak v Cantor Fitzgerald International [2005] ICR 402.

Crucially, this was not a case concerning underperformance where both parties sought improvement. By the termination date, both parties had concluded the working relationship was untenable. In such circumstances, applying the principle from Jafri v Lincoln College [2014] EWCA Civ 449, only one outcome was permissible.

The Tribunal should have held that whilst the dismissal was wrongful, no compensation was payable because the respondent could have lawfully terminated the contract by giving five weeks' notice from 15 March 2023. Since the claimant received payment representing that period, he suffered no loss. The Probation Policy's procedural protections served their purpose by providing both parties opportunity to assess the employment's viability during probation, allowing either party to serve notice if the arrangement proved unworkable.

The decision reinforces that technical breaches of employment contracts do not automatically translate to compensable losses where the employer could have achieved the same outcome through lawful means available under the contract terms.