I have often thought that the FX trader dismissals, indeed the entire chatroom related scandal in FX, would make a great case study for business management schools. Over the years I have argued there have been weak, misguided, vindictive, panicky and ill-informed decisions made at management level across a range of organisations that has resulted […]
Tag: unfair dismissal
What can only be described as a frisson of excitement ran through the FX market in London last week when word spread of former Barclays head of automated trading services David Fotheringhame launching a new website that – and this is putting it delicately – analyses the bank’s response to a fine imposed on its FX business in 2015 for what was found to be a too liberal use of last look.
Fotheringhame won an unfair dismissal claim against the bank last year, however Barclays defied the employment tribunal’s edict to reemploy him, resulting in a second hearing this year at which he was awarded nearly £1 million.
What is it that infected so many of the banks’ FX businesses at the end of 2013 that led to so many bad decisions being made? Was it a lack of focus, courage, or even sheer panic that underpinned the decision to roll over on legal actions brought by customers, but at the same time stand firm and fight unfair dismissal cases brought about by their own staff?
The question emerges because the stakes have been raised when it comes to unfair dismissals thanks to the awarding of £1.2 million to former RBC FX trader John Banerjee to compensate him for loss of earnings.
Following up on a column from last month that elicited an interesting idea from a correspondent – should trading businesses be penalised for not adhering to the correct procedures when it comes to HR? There are few traders who care about the HR function, but the number of unfair dismissal cases being lost by banks would suggest that something needs to be done to ensure that the next generation of traders doesn’t face the trauma faced by some of the current crop.
People are fond of “looking at the bigger picture” but when it comes to the legal profession and FICC markets, frankly the bigger picture confuses me. How else can we explain how a number of traders are facing jail time and yet so many other traders are winning their unfair dismissal cases? To me, the issue clearly highlights the level of collateral damage in the industry and requires the banks (and regulators to a degree) to have a serious reappraisal of their approach.
In this week’s In the FICC of It podcast, Galen Stops breaks ranks to say he found one of Colin Lambert’s columns interesting, while the latter makes an appeal for expert knowledge on risk-free rates – if only so he doesn’t have to blag another podcast feature.
They also discuss the latest unfair dismissal outcome in the UK in which yet another FX dealer was found to have been wrongly sacked, as well as the potential implications for the fintech industry from a legal case in the US. In a busy podcast they also dispel some myths about AI – while at the same time making a big statement (is there any other kind?) on what will make AI trading successful; and they pick out their early selections for must-not-miss sessions from Forex Network Chicago in September.
The judge’s summary in the unfair dismissal case in which John Banerjee won his claim against Royal Bank of Canada has been published by a London employment tribunal and could see the bank facing a large compensation bill.
Rarely in such cases, Banerjee’s claim for whistleblower status was not dismissed, with Employment Judge James Tayler finding that he was unfairly dismissed principally for “the making of a protected disclosure”.
In the ruling, Judge Tayler refers to an address, in which staff were encouraged to report wrongdoing, and were told “don’t ask don’t tell will not be tolerated”.
Profit & Loss understands that John Bannerjee, who claimed unfair dismissal against former employer Royal Bank of Canada, has won his case.
Sources say that the tribunal judge at the London Central Tribunal found that the principal reason for his dismissal was the making of a protected disclosure. The judge also found, the sources say, that Bannerjee contributed 25% to his dismissal, however the compensation awarded will be boosted by 25% because the bank failed to comply with the UK’s Advisory, Conciliation and Arbitration Service (ACAS) Code of Practice.
There is probably more value in me writing about my holiday than the industry given how I did not, for one second, bother to look at what was going on! Luckily for you, dear readers, you will not have to suffer my eulogy to the Amalfi Coast, rather I want to discuss something that happened just before I went on my break, yet another unfair dismissal case – this one with the added spice of a plaintiff claiming whistle blower status.
This won’t take long as it’s a long weekend for most in the markets, including me! Just to reminder subscribers that we will have the latest in our monthly Insight calls next Wednesday – I thought we’d give you an extra day to get things back in order – and there is plenty to talk about.
I’ve already had a couple of messages about the events of the past month, possible bids for NEX, unfair dismissal claims being won and the Cartel traders making their first appearance in court, so we can discuss all of that if we have time, plus there is something I want to get into regarding the FX market structure.
So, it will be great to have you join us – this is only open to subscribers – and I look forward to a nice long weekend preparing some ammunition for Wednesday!