Unfair dismissal London forex trader
- Alex Kleanthous
- Updated: Tue, 20th Dec 2016
Recently, we won a claim for unfair dismissal for a London FOREX trader. His employer, a global investment bank, alleged breach of contract amounting to gross misconduct. The breach concerned the alleged disclosure of confidential information.
We appealed the gross misconduct dismissal decision. The bank refused to re-instate our client. Not an unpredictable response. But, there was a tacit admission of liability on the part of the bank. To spare the Bank’s embarrassment of being taken to an Employment Tribunal on account of unfair dismissal they agreed a generous settlement agreement. A good reference was part of the settlement.
Our client was pleased with the result as he wanted to leave the bank. Leaving with a settlement payment was his desired outcome. In the background, he already had another job lined up.
Our client was employed in the bank’s EMEA foreign exchange trading department. On starting with the bank, our client was encouraged to make use of the “chat room”. This is a virtual room, the trading banks use to exchange market information.
It was common knowledge that traders used the “chat room” to exchange not only market information, but client details. Banks allowed chat rooms as they thought the use was ultimately to the benefit of their traders.
Employment contract confidentiality provisions
Our client’s employment contract contained confidentiality provisions. These referred to the bank’s internal policies on information obtained. Information was defined as “all and anything” that came into a trader’s possession. The information had to remain confidential and could not be disclosed.
The policy was not bespoke to the role. Rather, it was boilerplate wording the bank used in all employee employment contracts. This contract was not ideal for a global investment bank with many roles, departments, and levels of seniority.
Our client was invited to a disciplinary hearing, chaired by the foreign exchange head. The bank alleged our client had breached the bank’s internal policies. The breach concerned use of the “chat room” to disclose confidential information, e.g. client details and market knowledge.
The bank alleged this conduct amounted to gross misconduct. The implication of gross misconduct was that our client could be summarily dismissed, i.e. without notice and shortly before bonus determination time. Our client appealed the gross misconduct finding.
The same foreign exchange head chaired the appeal hearing: an unfair process. At this time, the banking authority was investigating confidential information shared between respective banks as part of the interest fixing scandals. This investigation may have helped determine if our client’s conduct amounted to gross misconduct. The investigation shone a light on banking practices.
Our client requested the decision be delayed until the banking authority completed its investigation. The bank refused this request.
Defending our client
Following the appeal, our client was summarily dismissed. After consulting with our client, we outlined to the bank the basis of our client’s case. The approach was designed to make the bank realise that their case was not strong.
The three main planks we drew on to encourage a settlement were:
- The gross misconduct dismissal was not fair;
- The dismissal procedure operated by the bank was not balanced; and
- We were prepared to lodge proceedings in the Employment Tribunal as our client took the matter seriously. The Bank was not guaranteed a win.
How we conducted the case
At the appeal hearing, we raised the following points:
- The information was not confidential. The information was in the public domain.
- We argued that there was a distinction between disclosing information and exchanging information in accordance with market practice.
- The bank failed to recognise the culture of information sharing between the banks.
- There was no specific policy concerning use of the “chat room”.
- Our client was actively encouraged to use the “chat room”.
- Our client’s contract of employment was too broad to be enforceable on the grounds of breach of confidentiality.
- The terms had not been “brought home” to our client.
- The appeal hearing should have been postponed pending the banking authority review.
- In any event, the report produced following the investigation revealed the culture of information sharing, which supported our client’s claim.
- The bank had not acted reasonably in conducting the dismissal:
- The bank should have appointed an independent and impartial director or third party if there was no one suitable internally to chair the appeal.
- The bank’s procedure was flawed. The bank should have interviewed various parties to ascertain whether the culture of information sharing was accepted practice.
Alex Kleanthous is a partner in our employment law team with years of experience in resolving issues for employees relating to termination of employment. Alex offers experience in market practice and latest employment law cases which he uses to guide employees on how employers will react. Core areas of specialism include settlement amounts, bonus payments, shares and what can be done when things go wrong.