Bengaluru: A UK employment appeals tribunal has ruled that Wipro must pay a former sales executive the full value of a performance bonus linked to a major contract win. The ruling rejects the company’s attempt to cap the payout at $150,000 and potentially leaves Wipro liable for an additional payment of about $547,000 (around £400,000).The Employment Appeal Tribunal (EAT) found that former Wipro employee P. Chandrashekarappa was entitled to receive 1% of the first-year revenues from a contract he helped secure with UK retailer John Lewis Partnership (JLP), less the amount the company already paid. The ruling overturns an earlier employment tribunal decision that had sided with Wipro.According to the judgment, 1% of the first-year revenues from the John Lewis contract amounted to £516,082, or roughly $697,000. Chandrashekarappa was paid only $150,000 after Wipro imposed a payout cap, leaving a shortfall of approximately $547,000.The dispute centres on a “kitty bonus” scheme Wipro introduced in March 2020 to reward employees for winning new business. Under the programme, sales personnel could receive up to 1% of invoiced revenue from a new customer during the first year, subject to approval by a sector head. No cap on payouts was mentioned when the scheme was presented to employees.Chandrashekarappa, who worked in Wipro’s Cloud and Infrastructure Services division, played a key role in securing the John Lewis account. After the deal was signed in June 2020, his manager sought approval for the bonus from Kiran Desai, then senior vice-president and global head of the division. Desai approved the recommendation that the employee receive the full 1% payout.However, the tribunal found that Wipro’s HR and compensation teams later introduced additional conditions, including a requirement for higher-level approval and a $150,000 cap. Internal emails cited in the judgment showed the company’s concerns about introducing restrictions after the scheme had already been communicated to employees.An earlier employment tribunal had accepted Wipro’s argument that the bonus remained discretionary until formally communicated to the employee and therefore could be capped. The appeals tribunal disagreed, ruling that once Desai approved the award under the terms originally communicated, Chandrashekarappa acquired a legal entitlement to the full bonus.Judge Bruce Carr KC said Wipro was not entitled to “move the goalposts” by subsequently imposing new approval requirements or a payout cap. The tribunal held that the company could not alter the terms of the award after the relevant discretion had already been exercised.The EAT concluded that Chandrashekarappa was entitled to 1% of the first-year JLP revenues, with the previously paid $150,000 deducted from the total amount due. The ruling is likely to be closely watched by employers operating discretionary incentive schemes, as it reinforces the principle that bonus terms cannot be changed after they have been approved and communicated. An email sent to Wipro did not elicit a response till press time.
