Chandrashekarappa v Wipro: EAT rules employer cannot move the goalposts on discretionary bonus after approval

The Employment Appeal Tribunal has allowed an appeal by a former Wipro employee, holding that the respondent acted unlawfully when it retrospectively imposed a $150,000 cap on a "kitty bonus" that had already been approved in full under the terms originally presented to staff.

The case, Chandrashekarappa v Wipro Limited [2026] EAT 73, concerned a Practitioner Sales Farmer employed in Wipro's Cloud and Infrastructure Services division who had been instrumental in securing a deal with John Lewis Partnership in June 2020. At a Variable Pay Plan presentation in March 2020, staff had been told that a kitty bonus of up to 1% of new logo invoicing against the first 12 months could be paid, subject to Sector Lead approval.

Within days of the JLP deal closing, the claimant's line manager wrote to Kiran Desai, the relevant Sector Lead, requesting approval for the full 1% commission. Mr Desai responded immediately: "I am ok. Go ahead." The claimant was subsequently informed that approval had been given, though no figure could be calculated at that stage as the first year's JLP revenues remained unknown.

The difficulty arose weeks later, when Wipro's compensation and benefits team introduced two conditions that had never featured in the March 2020 presentation: a requirement for approval from a more senior level of management, and a cap of $150,000 on the payout. Despite internal objections from the claimant's line manager and the Head of HR for the division, both conditions were ultimately applied, and the claimant received $150,000 in February 2021. Had 1% of the first year's JLP revenues been paid without a cap, the figure would have amounted to £516,082.

The Reading Employment Tribunal dismissed the unlawful deduction claim, concluding that no legal entitlement had crystallised on 1 July 2020 because Mr Desai had himself indicated, a fortnight after his initial approval, that further sign-off from more senior management was required before any bonus could be paid. The tribunal held that the obligation to pay only arose upon the formal declaration of the capped amount on 15 December 2020.

On appeal, Bruce Carr KC, sitting as Deputy Judge of the High Court, found that the tribunal had erred in treating Mr Desai's subsequent change of position as determinative. The tribunal's analysis had focused on Mr Desai's subjective view of his own authority rather than asking the objectively correct question: what had been communicated to the claimant in March 2020, and had those terms been satisfied?

The EAT held that they had. The March 2020 presentation had identified Sector Lead approval as the sole condition for the award of a full 1% bonus. Mr Desai was the Sector Lead. His approval on 1 July 2020 fulfilled that condition. The respondent was not thereafter entitled to introduce additional requirements or impose a cap that had formed no part of the scheme as communicated to the workforce.

Carr KC drew support from the EAT's earlier decision in Farrell Matthews & Weir v Hansen [2005] IRLR 160, in which Nelson J confirmed that once an employer tells an employee they will receive bonus payments on certain terms, the employer is obliged to pay in accordance with those terms unless and until altered with appropriate notice. The cap, the EAT found, had never been communicated upfront, a point acknowledged by Wipro's own Head of HR in internal correspondence at the time.

The EAT declined to remit the matter, substituting a finding that the claimant was entitled to 1% of the first year JLP revenues less the sterling equivalent of the $150,000 already paid. Carr KC observed that the issue was binary, only one outcome could legitimately follow from the facts as found, and that outcome favoured the claimant.

The judgement serves as a clear reminder that where an employer presents a discretionary bonus scheme with defined criteria, the scope of any residual discretion does not extend to revising those criteria after they have been met. The exercise of discretion in accordance with communicated terms creates a legal entitlement that cannot be displaced by subsequent internal reconsideration.