Karen Deans v Agra Freeze Limited — 2023

Karen Deans had worked for Agra Freeze Limited since 1 October 2001 and was managing director from 1 January 2004. The tribunal found that a bonus arrangement had been agreed with Mr Richard Cryer around 2006 under which she was to receive 15% of net profit in the end-of-year management accounts above an agreed threshold. It found that the relevant threshold had been fixed at £210,000 by no later than 2013/2014, and that the respondent had not shown the bonus to be wholly discretionary in the sense contended for.

For the 2019/2020 year the respondent paid £42,813.45 on 16 September 2020, but the tribunal found that £58,788.45 was properly payable. It found that the management accounts showed net profit of £601,923.31 and that the respondent had reduced the figure used for the bonus by £106,500. The tribunal held that this underpayment breached an express term of the contract, or alternatively a term implied by custom and practice, and also breached the implied term of trust and confidence. The respondent was ordered to pay £15,975 gross, the amount of the shortfall, in respect of the bonus claim and the unlawful deduction finding.

The tribunal rejected the separate allegation that Ms Deans had been wrongly excluded from management of the business between September 2019 and her resignation. It found she was extremely busy during the covid period, was kept reasonably informed, was involved in the 4 June 2020 board meeting that approved Big Fish, and had not asked for more involvement only to be refused. It therefore concluded that she had not been excluded from management in the way alleged.

The tribunal held that the bonus underpayment was the main reason for Ms Deans's resignation on 9 October 2020 and that she had not affirmed the contract. It found that she had been constructively dismissed and that the respondent had not proved any reason for dismissal or any potentially fair reason, and had not acted reasonably in treating the matter as a sufficient reason to dismiss. For remedy on the unfair dismissal claim, it found a 40% chance that her employment would have ended anyway because she had moved into a different career direction and because of longstanding difficulties with the Cryer family, so any compensatory award is subject to a 40% Polkey reduction. The tribunal rejected contribution. Other remedy issues, including the unfair dismissal monetary award and wrongful dismissal damages, were left to a future hearing.