Mr Knowles was a senior employee at the Council. He was arrested at work following allegations that he had misappropriated large sums of money. The Council suspended him to allow an internal investigation to take place. During this time he was technically available for work but his pay was withheld because of the seriousness of the allegations. The Council said that he would be reimbursed if the disciplinary hearing concluded that there was no case to answer.
But the disciplinary investigation unearthed the diversion of more than £200 million into an account seemingly in Mr Knowles' name, or which was available to him. He was dismissed and he claimed payment of his withheld salary.
The employment tribunal upheld his claim and the Council appealed – unsuccessfully. The Employment Appeal Tribunal said that Mr Knowles' salary had been properly payable because there was no contractual right to suspend without pay. Mr Knowles had been able to work and this amounted to consideration for his salary.
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