It may seem a straightforward question since people are dismissed every working day for what is commonly referred to as “gross misconduct”, i.e. conduct which is so serious that it goes to the root of the contract and renders its continuation undesirable if not impossible.
However, what of the “innocent” employee? In my discussion about decision of the Court of Appeal in Société Générale London Branch v Geys in April 2011 I pointed out that, according to the Court of Appeal, Mr Geys’ employment was terminated on 18 December 2007 when Société Générale made a payment in lieu of notice to him, rather than 4 January 2008 when Société Générale confirmed in writing its intention to do so. The date was very important for Mr Geys because, relying on the earlier date, Société Générale did not have to pay significant bonuses which would have accrued prior to the later termination date.
I commented: Continue reading
It is an often-heard maxim in contract law that a party cannot seek to claim the benefits of a contract which he has breached. While that is a rather simplistic statement and is, in practice, subject to numerous qualifications and exclusions, the decision of the High Court in Imam-Sadeque -v- Bluebay Asset Management (Services) Limited is an example of how the general principle can apply, even in the most complex of cases.
Heard over seven days and with the judgment of Mr Justice Popplewell running to 235 paragraphs in 61 pages, the case concerned the departure of Mr Imam-Sadeque from Bluebay. As is common with executive contracts there were “good leaver” and “bad leaver” provisions. Resignation would make Mr Imam-Sadeque a “bad leaver”. The distinction was particularly important for him since, as a good leaver, he would be able to exercise share options worth £1.7m. Terms were therefore set out in a compromise agreement. Continue reading
Managers at Germany’s second largest bank, Commerzbank, are facing the prospect of having to find £42million after Mr Justice Owen, sitting in the High Court in London, held that 104 former City bankers at Dresdner Kleinwort are each entitled to bonus payments of up to £1.3million each.
The Bank claimed to be entitled to withhold payments when it faced massive financial pressure as part of the general turmoil in 2009. In 2008 the business was struggling and in May it was put on the FSA’s "watch list" as a result of the apparent fragility of its business. With a view to avoiding mass defections resulting from the instability this caused CEO Dr Stefan Jentzsch promised at a meeting that there would be a 400 million euros’ guaranteed bonus pot. This was a verbal representation to the employees concerning what was described as a discretionary bonus scheme.
In early 2009 the Bank decided to reduce the resulting allocated bonuses by 90%. Continue reading