Although the UK appears to have at last emerged from the recession bankers, it appears, keep on losing out (in the Employment Tribunal and in the jobs market, at least).
The above Bloomberg article examines the spate of unfair dismissal and wrongful dismissal claims that have trundled their way through the Employment Tribunal over the last couple of years. The claims are both contractual in nature (wrongful dismissal claims for repudiatory breach of contract, mainly relating to unpaid bonuses, notice pay and commission) and statutory (unfair dismissal claims for a failure to dismiss bank employees fairly). The article notes (although with some confusion as to the distinction between a wrongful dismissal claim and an unfair dismissal claim) that the earlier wrongful dismissal claims were (generally) successful, the unfair dismissal claims are being resisted with more vigour and success.
One of the unsuccessful unfair dismissal claims related to the firing of a JP Morgan banker after it was discovered that he was mispricing aluminium trades that he was making so that his trading book benefited by $400,000. This claim was dismissed by the Employment Tribunal judge.
Another case of unfair dismissal involved a claim by an Credit Agricole banker after he was threatened by a manager and dismissed for reporting the threatening behaviour. This case succeeded but the Employment Judge apparently rejected the argument that the banker’s “strikingly low” £867,896 bonus should be paid. Other cases have involved issues of securities manipulation.
In another decision, a trader lost his civil court claim for breach of contract after he signed a contract which mistakenly put his salary at $3.1 million instead of the correct $310,000. The Judge dismissed this case, stating that the trader knew that the figure was an error and took the commercial risk of accepting it. Kai Herbert, the trader, was also ordered to pay £86,000 in costs.
The news of these unsuccessful claims comes as UBS announced the latest round of redundancies in the City of London. On 30 October it announced that that it would cut 10,000 jobs, a proportion of these coming from its UK investment banking unit. According to reports approximately 100 traders at its investment banking unit in London were put at risk of redundancy and told to go home until the process had completed.
As is mentioned in the above article, a majority of unfair dismissal claims are settled or withdrawn prior to the Employment Tribunal. Approximately 41% of unfair dismissals were settled in conciliation with ACAS in the Employment Tribunal statistics for 2010-11. The claims which therefore proceed to the Employment Tribunal are therefore those which, rightly or wrongly, generally those which the banks believe that they can successfully defend.
If you believe that you have an unfair dismissal then either contact an employment law solicitor using this form or teach yourself more about the law by reading our explanation of unfair dismissal and how you can submit a claim yourself.