April 5, 2016

Summary dismissal for disclosing confidential information was unfair

The bank was one of those involved in the LIBOR manipulation scandal. The bank had a culture of information sharing and the Tribunal found that the bank could not rely on a strict reading of its policies and codes of practice and protecting confidential information without properly investigating how these policies were actually applied in the foreign exchange business, or the extent to which the information was already in the public domain. It held that a reasonable investigation would have revealed that there was a culture of information sharing between the traders at different banks and this was something that had been highlighted in a regulatory investigation by the FCA.

It also found that the bank’s investigation was even more inadequate in its failure to look at the relevance of the FCA regulatory investigation for the disciplinary process or to interview witnesses who might have corroborated the trader’s defence. The Tribunal further found that the trader was not in repudiatory breach of contract because the breach of confidentiality was not deliberate as he believed his conduct was permitted, given the similar conduct of his peers and immediate managers. Finally, at the time of dismissal, he had not actually shared confidential information in chat rooms for 3 years following a management instruction on their use.

This case is a useful reminder of the importance of the investigation in disciplinary matters where someone is potentially subject to a disciplinary hearing, especially in cases where summary dismissal may have a very severe effect on the employee’s future career prospects.

For further details on any of the issues covered in this update please contact Gemma Ospedale, Partner in Employment on 020 7583 2222.

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