Employment lawyer Philip Landau from Landau Law Solicitors, looks at the position:

Disciplinary cases resulting in dismissals or suspensions have hit a 5 year high, after a crackdown on misbehaviour in the UK financial services sector. These recent statistics were obtained from law firm Pinsent Masons following a Freedom of Information Actrequest to the Financial Services Authority (FSA). The figures show that a total of 1,373 employees were either sacked or suspended in the City of London last year. This is a 76% increase from 2011.

You may not be surprised at the statistics following a number of damaging scandals across the banking sector which has included:-

  • rogue traders such as Kweku Adoboli who gambled away £1.4 billion of UBS money
  • the manipulation of LIBOR (the international benchmark interest rate set by the London banks)
  • the mis-selling of interest rate and currency hedging products to small businesses
  • a number of insider trading cases

It seems that banks and the financial sector in general are taking a harder stance following the FSA who are cracking down on financial crime and market abuse.

But what are your rights if you are facing suspension and disciplinary action on the basis of gross misconduct?  Is it an automatic exit with your cards marked for the rest of your career? Well, in the most serious of cases it may be. The following is a list of considerations, however, that need to be taken in to account by your employer failing which you may either have a claim for unfair dismissal or mutual departure terms could be agreed:-

  • there needs to be a “suspension clause” in your contract of employment, otherwise your suspension will be unlawful;
  •  your employer need to properly investigate the alleged misconduct, and if necessary bring in independent investigators;
  •  there should be a consideration by your employer as to whether the alleged behaviour was sufficiently serious to warrant a finding of gross misconduct. If such a finding is made, your employer should consider the appropriate sanction “in all the circumstances”. This is where you are able to introduce possible mitigation arguments. If, for example, you acted entirely out of character or it was a genuine mistake or perhaps you had personal issues that were impaling your judgement, these are all matters which your employer should take into account in deciding what the disciplinary sanction should be;
  •  your employer should be consistent in its approach. You would not expect there to be different sanctions for a number of employees who are facing the same disciplinary proceedings.

If there are pending criminal proceedings for the same offence, your employer does not need to wait the outcome of those proceedings if they have carried out a proper internal investigation themselves and is satisfied that dismissal is an appropriate sanction.

I have seen many situations where an allegation of gross misconduct levied on an employee is borderline. Yes, there may be a case to answer, but arguments can be raised that the there has been insufficient systems in place by the employer to prevent the alleged misconduct in the first place, there has been lack of training, previous precedents for the same offence has been allowed, and where implied or express authorisation has been given for the act in question (unbeknown to senior managers further up the hierarchy).

In these circumstances, you should fight your corner and if necessary lodge an appeal to any disciplinary finding. You also have 3 months less one day from the date of termination of employment in which to make any claim to the employment tribunal for unfair dismissal, otherwise you will be time barred. There are only very limited exceptions to this time limit.

Alternatively, you may be able to come to a settlement agreement with your employer. This is something which is being encouraged by the present government where there are performance issues, but settlement agreements can be used to compromise all employment disputes if it is in the interests of both parties to do so. As part of the settlement agreement, you would expect to receive a draft reference with no mention of the disciplinary proceedings.

So, gross misconduct is serious, but to ensure you do not become simply another statistic of the rising disciplinary trend sweeping across the City, it does pay to know your rights.

Contact Philip on 020 7100 5256 or email him: pl@landaulaw.co.uk