The Shepherd v Felt and Textiles principle permits an employer to rely on subsequently discovered misconduct to deny termination payments even where the employer initially terminated under a different contractual provision (such as payment in lieu of notice), and is not limited to circumstances where the original ground of termination was invalid. A CEO's undocumented personal drawings from company funds, even where subjectively honest and ultimately repaid, may constitute serious misconduct justifying summary dismissal where the conduct exposes the company to regulatory, taxation, and reputational risk.
The full text is available to signed-in members, including the 30 later cases that cite this judgment.
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