Financial Times, Megan Murphy, 22 March 2009
A City banker is suing one of Canada’s biggest financial institutions for making him redundant, allegedly because he is not Canadian, in one of the more unusual cases to emerge from the credit crunch.
Achim Beck, a German national, claims that Canadian Imperial Bank of Commerce (CIBC) had a secret policy of favouring “Canada-connected” employees when making job cuts.
The case, due to come before a UK employment tribunal earlier this month, has been delayed by a row over CIBC’s refusal to disclose internal documents that Mr Beck alleges lend support to his claim.
CIBC said his claim was “without merit” and it intended to defend the matter “vigorously”.
Lawyers have been gearing up for a surge in disputes brought by formerly high-earning bankers and traders caught up in cuts across the financial services industry and in the mounting furore over their compensation. A large group of employees at Dresdner Kleinwort, the investment bank taken over by Germany’s Commerzbank, for example, recently instructed solicitors in an escalating row over unpaid bonuses.
Mr Beck, a former managing director within CIBC’s fixed income and currencies division, brought his race discrimination complaint after he was made redundant last May.
He is now fighting to force the disclosure of what a tribunal described as a “smoking gun”– statements from a former senior CIBC executive to the effect that Canadians tend to be “looked after” at the bank and had been promoted or spared redundancy at the expense of non-Canadians.
The employment appeal tribunal has ruled that CIBC must disclose the correspondence, which formed part of a separate grievance brought by another employee. The bank’s appeal against that decision has pushed back the hearing for the case to September.
Race discrimination cases, like all forms of discrimination complaints, carry the threat of unlimited damages in the UK. For City workers in particular, claims can quickly run in to the millions when loss of earnings is taken into account. Caroline Carter, an employment lawyer at Ashurst, said the big question was whether financial institutions in the current economic climate would still be more likely to settle potentially embarrassing – and expensive – claims, or contest them.
Mr Beck’s complaint is not unprecedented. Australian-born Malcolm Perry brought a £10m claim against Dresdner Kleinwort in 2007 for allegedly treating him less favourably than the bank’s German and German-speaking employees. An employment tribunal rejected his claims after a full hearing.
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A City banker is suing one of Canada’s biggest financial institutions for making him redundant, allegedly because he is not Canadian, in one of the more unusual cases to emerge from the credit crunch.
Achim Beck, a German national, claims that Canadian Imperial Bank of Commerce (CIBC) had a secret policy of favouring “Canada-connected” employees when making job cuts.
The case, due to come before a UK employment tribunal earlier this month, has been delayed by a row over CIBC’s refusal to disclose internal documents that Mr Beck alleges lend support to his claim.
CIBC said his claim was “without merit” and it intended to defend the matter “vigorously”.
Lawyers have been gearing up for a surge in disputes brought by formerly high-earning bankers and traders caught up in cuts across the financial services industry and in the mounting furore over their compensation. A large group of employees at Dresdner Kleinwort, the investment bank taken over by Germany’s Commerzbank, for example, recently instructed solicitors in an escalating row over unpaid bonuses.
Mr Beck, a former managing director within CIBC’s fixed income and currencies division, brought his race discrimination complaint after he was made redundant last May.
He is now fighting to force the disclosure of what a tribunal described as a “smoking gun”– statements from a former senior CIBC executive to the effect that Canadians tend to be “looked after” at the bank and had been promoted or spared redundancy at the expense of non-Canadians.
The employment appeal tribunal has ruled that CIBC must disclose the correspondence, which formed part of a separate grievance brought by another employee. The bank’s appeal against that decision has pushed back the hearing for the case to September.
Race discrimination cases, like all forms of discrimination complaints, carry the threat of unlimited damages in the UK. For City workers in particular, claims can quickly run in to the millions when loss of earnings is taken into account. Caroline Carter, an employment lawyer at Ashurst, said the big question was whether financial institutions in the current economic climate would still be more likely to settle potentially embarrassing – and expensive – claims, or contest them.
Mr Beck’s complaint is not unprecedented. Australian-born Malcolm Perry brought a £10m claim against Dresdner Kleinwort in 2007 for allegedly treating him less favourably than the bank’s German and German-speaking employees. An employment tribunal rejected his claims after a full hearing.
