Grace Ejiga worked as an executive at digital transformation specialist Olive Jar Digital. In October 2023, she was told that her pay rise request was being considered, according to tribunal documents published on 24 March 2025.
However, the company’s cash reserves fell in 2024. When Ejiga's managers realised that they could no longer afford to give her a pay rise, they claimed her performance had worsened and accused her of gross misconduct.
When Ejiga realised this, she began to negotiate her departure from the company, but she was fired before those discussions were completed, the tribunal heard.
Ejiga was dismissed in May 2024. She was awarded £3,425 for unfair dismissal, £18,288.82 for wrongful dismissal and £3,300.19 for unauthorised deductions.
This case serves as a reminder to HR and employers to make sure there is adequate evidence before claiming an employee’s performance has worsened, according to Ashley Scriven, partner at law firm Loch Law.
Scriven told HR magazine: “Any decision relating to performance management must be supported by contemporaneous and objective evidence of declining performance.
“Employers must not attempt to manufacture such evidence retrospectively, to justify adverse employment actions. In all cases, employers must adhere to a fair and proper procedure, to avoid a finding of procedural unfair dismissal.”
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HR and employers should also make sure that they are communicating any information relating to changes to pay to employees effectively, especially if an expected pay rise is no longer feasible, added Helen Watson, partner and head of employment law at law firm Aaron and Partners.
Speaking to HR magazine, she said: "Inviting the employee for a meeting to discuss a pay rise to allow them to explain their reasons for requesting one will be appropriate in most cases. However, employers should refrain from giving verbal agreement or refusal without having fully considered all relevant factors thoroughly.
“If an employer can no longer award a pay increase, they should first consider whether they risk breaching any contractual obligations in doing so. If not, inviting the employee for a meeting to explain why the pay increase can no longer be given.”
Scriven echoed this, and said: “If an employer can no longer afford a promised pay increase, they must handle the situation carefully to avoid legal and reputational risks. While difficult, an honest conversation from the outset is always preferable. The first step would be to review the position to determine whether the increase is contractual or discretionary to assess legal obligations.
“If the increase is contractual, obtain explicit consent before making changes. Consider alternatives such as deferral, phased increases or non-monetary benefits. Any decisions from there must be communicated transparently and the employer should engage in an early and honest discussion with affected employees to explain financial constraints and why pay increases can no longer be provided, in order to minimise exposure for breach of contract or constructive unfair dismissal claims.”
Read more: When should employers offer a pay rise?
In April 2024, Ejiga was placed on a performance improvement plan (PIP) by her managers. This was reportedly the first time that she had been made aware of any concerns from management about her performance.
Negotiations began in May 2024 about the end of Ejiga’s employment. She provided a handover note on 3 May 2024, which the company later claimed was a formal notice letter.
Judge Tamara Lewis found that the company “did not come even close” to giving evidence of “ordinary misconduct, let alone gross misconduct”.
HR leaders must ensure that they resolve issues objectively, reminded Emma Bartlett, partner at law firm CM Murray.
Advising leaders who find themselves in a similar situation to Olive Jar Digital's, Bartlett told HR magazine: “Look at what is being asked of you by the business and the preceding circumstances. Cost is not a fair reason to dismiss, but can render subsequent dismissal unfair if this is the underlying reason."
A spokesperson for Olive Jar Digital told HR magazine: "We acknowledge the recent employment tribunal judgment regarding a former employee. While we respect the outcome, we are disappointed by the decision and believe it does not reflect the full context.
"The case centred around long-standing performance concerns, including a period of over 12 months without any deliverables. A performance improvement plan was proposed as a constructive step forward, but this was declined. The employee subsequently submitted a handover note and left the business.
"We remain focused on moving forward and continuing to foster a fair, respectful and high-performing workplace."
