Employers have a right to expect that their workers will honour their contracts and behave honestly. In one case where that certainly did not happen, the manager of a Premier League football club who lied his way to a £2 million bonus was hit hard in the pocket first by arbitrators and then by the High Court.
The club had agreed to pay the manager the bonus if he succeeded in avoiding its relegation to a lower league and if he remained in its employment on a particular date. He had fulfilled the first of those conditions, but not the second.
However, he had succeeded in persuading the club’s chairman to pay him the bonus before it was due on the basis that he urgently needed the money to fund a land transaction for the benefit of his children. He had assured the chairman of his commitment to the club before receiving the money, but had announced his departure from the club on the following day.
In those circumstances, the club referred the dispute to an arbitration panel set up by the Premier League. In finding the manager guilty of fraud and deceit, the panel noted that he had left the club in the lurch on the eve of a new football season. His refusal to prepare the club’s team for the first important match of the season amounted to a repudiatory breach of contract.
He had deliberately misled the chairman about the purported land transaction which was, in fact, non-existent. Far from being committed to the club, his true motive for requesting early payment of the bonus was his settled intention to seek more lucrative employment with another club.
The panel required the manager to repay the bonus, with interest, and £1.5 million in damages for breach of contract, a total of £3,776,000. The facts of the case emerged after the High Court rejected his challenge to the panel’s award, finding that the club’s case against him was compelling.
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