S Alaswad v Mr I Najjar and Equiti Capital UK Ltd: 2208886/2022
EMPLOYMENT TRIBUNALS
Case No 2208886/2022
Between
Salam AlaswadClaimant(1) Mr I Najjar (the First Respondent / R1) (2) Equiti Capital UK Limited (the Second Respondent / R2)Respondent
Before
Employment Judge WoodheadMr S Purnell (instructed by Counsel) for claimantMr T Croxford KC (instructed by Counsel) for respondentDate 20 August 2024
JUDGMENT
[1]The complaints of being subjected to detriments for making protected disclosures under Section 47B of the Employment Rights Act 1996 (“ERA”) are not well-founded and are dismissed.[2]The complaint of automatic unfair dismissal pursuant to Sectoin 103A ERA (protected disclosure) is not well-founded and is dismissed. DELAY IN ISSUING THIS JUDGMENT[3]We apologise to the parties for the delay in issuing the decision. This arose because(i) there was insufficient time for us to do any deliberation in the trial window,(ii) a calendar/scheduling mistake meant that we were not able to deliberate for as long as we had hoped in May and,(iii) with the passage of time and the time needed to read back into the case properly, the time we allocated to ourselves in July (whilst sufficient to reach our decision) proved not to be sufficient for the full writing up of that decision; and(iv) it then took some further 1 of 82 time for the written decision to be fully written up and approved. It has also been a claim that has been time consuming to decide because of the complexity of the factual background and the volume of documents (including the public and private transcripts of the hearing). THE ISSUES[4]This claim arises out of the Claimant’s short period of employment between 4 April 2022 and 1 August 2022 as R2’s prospective CEO. The Claimant did not formally become the CEO of R2 because this required the approval of the Financial Conduct Authority. Approval was not sought by R2 as explained in this judgment.[5]The issues that we were to asked to determine are set out in the agreed List of Issues in the Appendix to this Judgment. The Claimant’s claim was that he had made protected disclosures and had then been subjected to detriments (which included his dismissal).[6]At the conclusion of the evidence, on Tuesday 12 March 2024, the Claimant withdrew PD15 (2.1.10 in the List of Issues) and also detriments 7 (3.1.3 in the List of Issues) and 13 (3.1.6 in the List of Issues) and they therefore appear as struck through. THE HEARING[7]This claim was listed for a hearing of 10 days on 27, 28, 29 February 2024, 4, 5, 6, 7, 8 and 11 March 2024 to determine liability alone. We were not able to sit on 4 and 5 March and this gave rise to the hearing dates noted above.[8]At the start of the hearing we were provided with:8.1 An opening submission from the Respondents;8.2 A skeleton argument for a Rule 50 application on behalf of the Respondents;8.3 A Final hearing bundle of 2178 pages (three volumes of hard copy running to 2178) (page references indicated in []). This included the agreed List of Issues at pages 141-145 which is also reproduced in the Appendix to this judgment. We considered and accepted an uncontested amendment to the claim which is reflected in the List of Issues at 2.1.9.8.4 A Privileged Documents Bundle of 264 pages (“PB”)8.5 A Rule 50 Witness Statement Bundle for the purposes of the Rule 50 Application and containing witness statements from:8.5.1 Paul Webb - Group COO8.5.2 A partner and specialist in financial regulation at a global law firm who we refer to as “R2’s External Counsel” 2 of 828.6 A Witness Statement Bundle of 151 pages in two versions (redacted and unredacted to account for the privileged elements of witness evidence). This included the witness statements of:8.6.1 The Claimant (63 pages and 175 numbered paragraphs)8.6.2 Iskandar Najjar – R1 – Group CEO (26 pages and 77 numbered paragraphs)8.6.3 Nigel Holmes – Interim CEO pending the proposed appointment of the Claimant as CEO following FCA approval (13 pages and 53 numbered paragraphs)8.6.4 Marta Ilbak – Global Head of Resources (8 pages and 27 numbered paragraphs)8.6.5 R2’s External Counsel (not in the redacted witness statement bundle) (8 pages and 32 numbered paragraphs)8.6.6 Paul Webb – Group COO (Chief Operating Officer) (18 pages and 67 numbered paragraphs)8.6.7 Rick Fulton – Group CFO (Chief Finance Officer) (6 pages and 20 numbered paragraphs)8.6.8 Brian Myers – Group CCO (Chief Commercial Officer)8.7 An agreed Cast List8.8 An agreed Chronology[9]The Claimant did not have any other witnesses for his case.[10]On the first day of the hearing, 27 February 2024, we:10.1 Heard the Respondents’ application for a restricted reporting order (“RRO”);10.2 Heard the Respondents’ application for permission to pay for a transcription service to be used at the hearing (“Transcript”).10.3 Agreed a provisional timetable and other practicalities. We kept the hearing timetable under review with the parties as the hearing progressed.[11]The Claimant was neutral in respect of both the RRO and transcription applications. We confirmed to the parties that we would allow the transcription application. RRO application[12]In the afternoon of the first day we considered the RRO application. The Claimant did not oppose or support R2’s application for a Rule 50 Order, he was neutral. 3 of 82[13]Rule 50 provides - A Tribunal may at any stage of the proceedings, on its own initiative or on application, make an order with a view to preventing or restricting the public disclosure of any aspect of those proceedings so far as it considers necessary in the interests of justice or in order to protect the Convention rights of any person or in the circumstances identified in section 10A of the Employment Tribunals Act.[14]The Second Respondent requested Rule 50 Orders:14.1 in the interests of justice in order to protect R2’s right to maintain the legal advice privilege of the Privileged Content; and14.2 by reference to s.10A(1) of the Employment Tribunals Act 1996: ‘hearing evidence from any person which in the opinion of the tribunal is likely to consist of … (b) information which has been communicated to him in confidence or which he has otherwise obtained in consequence of the confidence reposed in him by another person’.[15]The Privileged Content was defined as follows: The content of communications between R2’s External Counsel and the Claimant or R2’s External Counsel and R1 / R2 in connection to the meetings between the Claimant and R2’s External Counsel of 20 May 2022 and 22 June 2022 including the matters pleaded as Protected Disclosures 13 and 14 and 16 and Detriment 1 in the List of Issues dated 20 December 2023.[16]The reasons for the application were summarised by Counsel for R2 as follows:16.1 The Privileged Contents are at the very least confidential and appear on their face to be privileged;16.2 The Second Respondent’s proposed Order permits the full adjudication of a Tribunal on the entirety of the Claimant’s claims;16.3 Only very limited parts of the claims and the underlying documents would need to be considered in private;16.4 At least the majority of the judgment can be provided in public, and possibly the entirety of it.[17]We were referred to the following authorities:17.1 Clifford v Millicom Services UK [2023] ICR 66317.2 R v Derby Magistrates’ Court, Ex p. B [1996] AC 48717.3 Morgan Grenfell [2003] 1 AC 56317.4 Eversheds v Gray (2011) UKEAT/0585/1117.5 ENRC v Dechert [2016] 1 WLR 5027 4 of 8217.6 Suppipat v Wilkie Farr & Gallagher [2022] EWHC 38117.7 Eurasian Natural Resources Corpn Ltd v Dechert [2016] 1 WLR 502717.8 Rainwood v Pemberton Capital Advisers LLP & Ors 2201717/2023 (30 November 2023)[18]We accepted and adopted the following content of Counsel for R2’s Skeleton Arguments: 12. The recent decision of the Court of Appeal in Clifford v Millicom Services UK [2023] ICR 663 has reconsidered the circumstances in which a Rule 50 Order may be granted, expanding considerably the scope from that hitherto perceived to be its outer limits. Critically, the CA identified the need in every case for a balancing exercise to be conducted. 13. The Court of Appeal stated that the following factors need to be weighed when performing the relevant balancing exercise [judgment at §42-43]:(a) the extent to which the derogation sought would interfere with the principle of open justice;(b) the importance to the case of the information which the applicant seeks to protect;(c) the role or status within the litigation of the person whose rights or interests are under consideration;(d) the harm disclosure would cause and, conversely, the extent to which the order sought would compromise "the purpose of the open justice principle and the potential value of the information in advancing that purpose" 14. Importantly for this application, at paragraphs 69-76 of the judgment, the CA identified the important public interest in upholding obligations of confidence. In particular: 14.1. At paragraph 74, the CA cited with approval earlier dicta that there is an “important public interest in the observance of duties of confidence” that being “a significant element to be weighed in the balance”; 14.2. In the same paragraph, the CA identified the important distinction in this regard between the public interest in a claimant disclosing information privately to a respondent in the course of his employment and the public interest in whether the same information should be disclosed privately in the course of proceedings; 14.3. Approved the judgment of Eady J in the EAT to the effect that even in whistleblowing cases, contractual confidentiality obligations could justify Rule 50 Orders, it being necessary in each case to conduct a fact 5 of 82 specific analysis to place in the balance. Privilege 15. The importance of privilege is most readily seen in two judgments of the Supreme Court: 15.1. Lord Taylor of Gosforth CJ in R v Derby Magistrates’ Court, Ex p. B [1996] AC 487 stated that “Legal professional privilege is thus more than an ordinary rule of evidence, limited in its application to the facts of a particular case. It is a fundamental condition on which the administration of justice as a whole rests” 15.2. Lord Hoffmann in Morgan Grenfell [2003] 1 AC 563, 606 stated that “LPP is a fundamental human right long established in the common law. It is a necessary corollary of the right of any person to obtain skilled advice about the law.” […][19]The importance of maintaining possible privilege even on a pro tem basis whilst the existence of privilege is still in dispute was shown in Eversheds v Gray (2011) UKEAT/0585/11 in which the EAT overturned a decision on the part of a tribunal to hold a PH in public to determine whether a claim to without prejudice privilege could be maintained. After Millicom and in the context of LPP rather than WPP, the contention is stronger still. […] Treatment of Privilege in the High Court[20]It should be noted that the approach sought by Rs is entirely orthodox in the higher courts.[21]In Eurasian Natural Resources Corpn Ltd v Dechert [2016] 1 WLR 5027, the Court of Appeal considered whether it was appropriate for a costs hearing to be held in private by reason of the consideration of LPP material. Even in circumstances where there had been partial waiver of LPP, the court considered that sitting in private was an appropriate means of balancing the public interest in open justice and the public interest in preserving LPP and confidence [see judgment at 38-45].[22]The principles expounded by the Court of Appeal in that case apply with equal force in this case. Indeed, in that case the principal argument deployed unsuccessfully in favour of a public hearing was the ENRC, by bringing costs proceedings against its own solicitor had waived privilege. This was held to be merely a limited waiver, extending to the other party and the judge but not more widely.[23]The approach of the Court to the redaction of judgments to prevent disclosure of LPP material is most readily seen in the recent 6 of 82 case of Suppipat v Siam Commercial Bank [2022] EWHC 381 in which the Court redacted a judgment to preserve privilege against the world, even though the documents were in the possession of both parties and before the Judge. [see judgment at paragraphs 3, 29]. Practice in the ET[24]Rs note the recent Tribunal decision in Rainwood v Pemberton Capital Advisers LLP & Ors 2201717/2023 (30 November 2023) in which an Employment Judge considering a strike out application in London Central adopted an approach similar to that now urged on this Tribunal in that a hearing was held partly in public and partly in private, and the judgment avoided public disclosure of the privileged material. It is understood that the judgment is under appeal in relation to whether the case should have been struck out. Confidentiality[25]Privilege is rarely, if ever, something that can be asserted once confidentiality has been lost but confidentiality is of importance as a freestanding basis for a Rule 50 application, or at least something to be weighed heavily in the balance, as set out in Millicom.19. We accepted that R2 is entitled to maintain privilege as against the world and that a Rule 50 Order is the only means by which that can be achieved.20. We were satisfied that R2 sought an order in relation to limited aspects of the claim (where privilege can properly be maintained or where duties of confidentiality apply). In this regard it was only two of the alleged protected disclosures and one of the alleged detriments that were not in the public domain and which were covered by the requested order and R2 was not seeking coverage by an order beyond what could be held to be privileged or confidential. We consider that this effectively and appropriately balanced the requirement of open justice with R2’s right to maintain legal professional privilege and confidentiality and only interfered with the principle of open justice to a limited extent (the vast majority of the protected disclosures and detriments were unaffected by the order requested). The information which was sought to be protected appeared to be of limited importance to the case whereas the rights R2 is seeking to protect are fundamental. We were satisfied that here the public interest in protecting privilege and high levels of confidentiality, outweighed the public interest in the contents of the Privileged Content.21. Acting as a further safeguard, we had the power to vary or revoke the Rule 50 order during the course of, or at the end of the hearing, should it have become apparent to us that it was unnecessary or otherwise excessive, and in particular that the claim for privilege was either not well-founded or certain of the confidential documents did not fall within its scope. Of course, if we were not to have granted the order then it would not subsequently have been possible to regain any confidentiality or privilege lost through discussion of the Privileged Content in a public hearing. In the public version of this judgment those parts which remain subject to the Rule 50 order are redacted. The parties and their legal 7 of 82 representatives have been provided with an unredacted version of this judgment.22. We spent the remainder of the first day reading and continued our reading on the second day of the hearing (28 February 2024).23. We made clear that anyone participating in the hearing could ask for breaks if needed. We reminded witnesses under oath that they were not permitted to communicate with others about the case during breaks or adjournments while they were giving evidence under oath.24. On the third and fourth day of the hearing (29 February 2024 and 1 March 2024) we heard the evidence of the Claimant. 25. On the fifth day (6 March 2024) we were provided with an updated public hearing bundle, the Claimant having provided further disclosure since his evidence concluded on 1 March 2024 and we heard the evidence of Mr Najjar (R1).[26]On the sixth day (7 March 2024) we were provided with an updated private hearing bundle, the Respondents having provided further disclosure overnight and we continued to hear the evidence of Mr Najjar.[27]On the seventh day (Friday 8 March 2024) we heard the evidence of Mr Fulton, Mr Myers and Ms Ilbak and we were provided with a one page screen shot of WhatsApp messages which Mr Fulton was questioned on and related to part of the hearing subject to the Restricted Reporting Order. Ms Ilbak told us that she had not, for the purposes of the disclosure exercise, been asked to search her WhatsApp application for relevant messages. In respect of documents which the Claimant said might have been expected to be found in the bundles following a disclosure exercise and search, the Respondents referred us to pages 169 and 170 of the bundle.[28]On day eight (Monday 11 March 2024) we received an updated main bundle with an additional document and heard the evidence of Mr Webb. After lunch, with agreement of the parties and due to his availability we had to interpose the evidence of R2’s External Counsel. This meant that Mr Webb did not sit in the hearing while under oath and we concluded his evidence on day 9 (Tuesday 12 March 2024) after which we heard the evidence of Mr Holmes. On this 9th day of the hearing we also received an updated privileged hearing bundle with a new document requested by the Claimant.[29]On day 10 (Wednesday 13 March 2024) we received a new version of the Privileged Bundle with some further disclosure. Having received written submissions, we heard oral submissions. THE LAW Whistleblowing Detriment S.47B ERA Public Interest Disclosures[30]Whistleblowers are protected from suffering any detriment or dismissal from their 8 of 82 employer as a consequence of making a public interest disclosure of alleged wrongdoing. The ERA defines a public interest disclosure in the following way: Section 43B of the ERA states: Disclosures qualifying for protection(1) In this Part a “qualifying disclosure” means any disclosure of information which in the reasonable belief of the worker making the disclosure, is made in the public interest and, tends to show one or more of the following: […] (b) that a person has failed, is failing or is likely to fail to comply with any legal obligation to which he is subject, […] 43C provides: Disclosure to employer or other responsible person (1) A qualifying disclosure is made in accordance with this section if the worker makes the disclosure in good faith: (a) to his employer. […] 47B provides: Protected disclosures (1) A worker has the right not to be subjected to any detriment by any act, or any deliberate failure to act, by his employer done on the ground that the worker has made a protected disclosure. (1A) A worker (“W”) has the right not to be subjected to any detriment by any act, or any deliberate failure to act, done—(a) by another worker of W's employer in the course of that other worker's employment, or (b) by an agent of W's employer with the employer's authority,on the ground that W has made a protected disclosure. (1B) Where a worker is subjected to detriment by anything done as mentioned in subsection (1A), that thing is treated as also done by the worker's employer. (1C) For the purposes of subsection (1B), it is immaterial whether the thing is done with the knowledge or approval of the worker's employer. (1D) In proceedings against W's employer in respect of anything alleged to have been done as mentioned in subsection (1A)(a), it is a defence for the employer to show that the employer took all reasonable steps to prevent the other worker— (a) from doing that thing, or (b) from doing anything of that description. (1E) A worker or agent of W's employer is not liable by reason of subsection (1A) for doing something that subjects W to detriment if— (a) the worker or agent does that thing in reliance on a statement by the employer that doing it does not contravene this Act, and (b) it is reasonable for the worker or agent to rely on the statement. But this does not prevent the employer from being liable by reason of subsection (1B).](2) … this section does not apply where— (a) the worker is an employee, and (b) the detriment in question amounts to dismissal (within 9 of 82 the meaning of [Part X]).(3) For the purposes of this section, and of sections 48 and 49 so far as relating to this section, “worker”, “worker's contract”, “employment” and “employer” have the extended meaning given by section 43K.[31]A protected disclosure may be made during the employment, but also after its termination (Onyango v Berkley Solicitors [2013] IRLR 338 EAT).[32]In Babula v Waltham Forest College [2007] 346 the Court of Appeal held that: ‘An Employment Tribunal hearing a claim for automatic unfair dismissal has to make three key findings. The first is whether or not the employee believes that the information he is disclosing meets the criteria set out in one or more of the subsections in ERA 1996, section 43B(1)(a)-(f). The second is to decide objectively whether or not that belief is reasonable. The third is to decide whether or not the disclosure is made in good faith’.The ‘reasonable belief’ statutory test is a subjective one. The ERA states that there must be a reasonable belief of the worker making the disclosure (Korashi v Abertawe Bro Morgannwg University Local Health Board [2012] IRLR 4, EAT). In Korashi the Court of Appeal stated ‘as to any of the alleged failures, the burden of proof is upon the Claimant to establish upon the balance of probabilities, any of the following,(a) there was in fact, and as a matter of law, a legal obligation or other relevant obligation on the employer in each of the circumstances relied on;(b) the information disclosed tends to show that a person has failed, is failing, or is likely to fail to comply with any legal obligation to which he is subject.’ The Court continued, ‘Belief seems to us to be entirely centred upon a subjective consideration of what was in the mind of the discloser. That again seems to be a fairly low threshold.’[33]In Simpson v Cancer Fitzgerald Europe [2021] IRLR 238 an individual presented whistle blowing claims based on the assertion that he had made protected disclosures in respect of traders engaging an illegal practise is known as ‘front running’. The Tribunal rejected the allegation that there was any causal link between these matters and the treatment of the Claimant. It did so on the basis that the communications contained ambiguity and the Claimant had not, as had been his duty as an FCA approved professional, reported his concerns to Compliance. The Court of Appeal, Bean LJ stated ‘obviously it was open to the Tribunal to find that his failure to make any explicit report to Compliance indicated that he did not genuinely, unconscious, conscientiously believe that there had been any such breaches’.[34]Qualifying disclosures must involve a disclosure of information, i.e. they must convey facts, rather than merely raise an allegation. There must be the disclosure of information. In Williams v Michelle Brown AM [2019] UKEAT/0044/19 the EAT stated: ‘If the Tribunal properly concludes that the factual content of the claim disclosure cannot reasonably be construed as tending to show a criminal offence [or other relevant breach of section 43B(1)] then that conclusion will by itself be fatal to the proposition that there was a qualifying 10 of 82 disclosure relying on section 43B(1). That will be so regardless of what the Claimant subjectively believed, and regardless of whether or the other elements are shown'.[35]The distinction between information and comment or assertion was illustrated by Slade LJ in Cavendish Munro Professional Risks Management v Geduld [2010] IRLR 38 as follows: ‘the ordinary meaning of giving “information” is conveying facts. In the course of the hearing before us, a hypothetical was advanced regarding communicating information about the state of a hospital. Communicating “information” would be “The wards have not been cleaned for the past two weeks. Yesterday, sharps were left lying around.” Contrasted with that would be a statement that “You are not complying with Health and Safety requirements”. In our view this would be an allegation not information.’[36]The question is whether there is sufficient by way of information to satisfy Section 43B. This will be very much a matter of fact for the Tribunal. The more the statement consists of unsupported allegation, the less likely it will be to qualify, but this is as a question of fact, not because of a rigid information/allegation divide (Kilraine v London Borough of Wandsworth [2018] ICR 1850). For a statement to be a qualifying disclosure, there must be sufficient factual content and specificity to show that one of the listed matters in Section 43B(1) is engaged. ‘If the worker subjectively believes that the information he discloses does tend to show one of the listed matters and the statement or disclosure that he makes has a sufficient factual content and specificity such that it is capable of tending to show that matter listed, it is likely that his belief will be a reasonable belief’.[37]It is then necessary to determine that the worker has a reasonable belief that the disclosure is in the public interest and tends to show one of the six statutory categories of 'failure'. The definition of a qualifying disclosure is ‘disclosure of information which, in the reasonable belief of the worker, is made in the public interest’. Disputes that are essentially personal contractual disputes are unlikely to qualify (Millbank Financial Services Ltd v Crawford [2014] IRLR 18, EAT). It is not sufficient that the Claimant has simply made allegations about the wrongdoer especially where the claimed whistleblowing occurs within the Claimant's own employment, as part of a dispute with his or her employer (Cavendish).[38]There must be an actual or likely breach of a legal obligation. Under paragraph (1)(b) there must be an actual or likely breach of the relevant obligation by the employer (Norbrook Laboratories (GB) Ltd v Shaw [2014] ICR 540, EAT). The word 'legal' must be given its natural meaning. The fact that the individual making the disclosure thought that the employer's actions were morally wrong, professionally wrong or contrary to its own internal rules may not be sufficient (Eiger Securities LLP v Korshunova [2017] IRLR 115, EAT). The source of the obligation should be identified and capable of certification by reference for example to statute or regulation. ‘Likely’ means probable or more probable than not. It is not sufficient that the Claimant reasonably believed that the relevant 11 of 82 disclosure of information tended to show that a person ‘could’ fail to comply with a legal obligation, or that there was a possibility or risk of non-compliance (Kraus v Penna Plc [2004] IRLR 260).[39]In Norbrook Slade J said ‘… an earlier communication can be read together with a later one as embedded in it, rendering the later communication of protected disclosure, even if taken on their own, they would not fall within section 43B(1). Accordingly, two communications can, taken together, amount to a protected disclosure. Whether they do is a question of fact’.[40]An employee wanting to rely on the whistleblowing protection before a tribunal bears the burden of proof on establishing the relevant failure (Blackbay Ventures Ltd v Gahir [2014] IRLR 416, EAT). As to any of the alleged failures, the burden of the proof is upon the Claimant to establish upon the balance of probabilities any of the following:(a) there was in fact and as a matter of law, a legal obligation (or other relevant obligation) on the employer (or other relevant person) in each of the circumstances relied on; and(b) the information disclosed tends to show that a person has failed, is failing or is likely to fail to comply with any legal obligation to which he is subject.[41]In the event that a qualifying protected disclosure was not made in good faith, at the remedy stage 'the tribunal may, if it considers it just and equitable in all the circumstances to do so, reduce any award it makes to the worker by no more than 25%'. Detriments[42]It is for the Claimant to show that he was subjected to a detriment by an act or a deliberate failure to act by his employer or co-worker. The claim would only be made out if the Claimant was subjected to the detriment on the ground that he had made the protected disclosure. The relevant test is whether the protected disclosure materially influenced, in the sense of being more than a trivial influence, the treatment of the Claimant (Fecit & Others v NHS Manchester [2011] IRLR 111).[43]Section 48(2) of the Act states that the onus is on the employer to show the ground on which the act or deliberate failure to act is done. The ‘on the ground that’ test focuses on the relevant decision-makers mental processes. The test is not satisfied merely because there was some relationship between the protected disclosure and the detriment complained of, or because the detriment would not have been imposed but for the disclosure (London Borough of Harrow v Knight [2003] IRLR 140).[44]The Court of Appeal decision in Jesudason v Alder Hay Childrens NHS Foundation Trust [2020] IRLR 374 stated ‘It is now well established that the concept of a detriment is very broad, and must be judged from the view point of the worker. There was a detriment if a reasonable employee might consider the relevant treatment to constitute a detriment’.[45]The decision to dismiss can itself be a detriment imposed by the dismissing officer for which that dismissing officer can be personally liable under Section 47B(1A) ERA and Timis and anor v Osipov (Protect intervening) 2019 ICR 12 of 82 655, CA. Automatic unfair dismissal[46]Section 103 ERA provides: An employee who is dismissed shall be regarded for the purposes of this Part as unfairly dismissed if the reason (or, if more than one, the principal reason) for the dismissal is that the employee made a protected disclosure.[47]The statutory question is what motivated a particular decision maker to act as they did? (Kong v Gulf International Bank UK Ltd [2022] IRLR 854).[48]The reason or principal reason for the dismissal means the employer’s reason. This can be the reason of the dismissing officer, but the inquiry may be a broader one (Royal Mail v Jhuti [2019] UKSC 55). It is a matter to be explored in evidence: ‘It might be appropriate for a tribunal to attribute to the employer knowledge held otherwise than by the decision-maker. He [Underhill LJ] was referring to the knowledge of a manager who, alongside the decision-maker, had some responsibility for the conduct of the disciplinary inquiry. … ‘Counsel accepted that in such a case the motivation of the manipulator could in principle be attributed to the employer, at least where he was a manager with some responsibility for the investigation and for my part, I think that must be correct’. I respectfully agree that in the situation there identified by Underhill LJ it might well be necessary for the tribunal to attribute to the employer the knowledge of the manipulator’.[49]On the issue of the burden of proof the Court of Appeal stated in Kuzel v Roche Products Limited [2008] IRLR 530: ‘The Employment Tribunal must then decide what was the reason or principle reason for the dismissal of the Claimant on the basis that it was for the employer to show what the reason was. If the employer does not show to the satisfaction of the Tribunal that the reason was what he asserted it was, it is open for the Tribunal to find that the reason was what the employee asserted it was. But it is not correct to say, either as a matter of law or logic, that the ET must find that if the reason was not that asserted by the employer, that it must have been for the reason asserted by the employee. That may often be the outcome in practise but it is not necessarily so. It may be open to the tribunal to find that, on a consideration of all the evidence in the particular case, the true reason for the dismissal was not that advanced by either side. In brief an employer may fail in its case for fair dismissal for an admissible reason, but that does not mean that the employer fails in disputing the case advanced by the employee on the basis of an automatically unfair dismissal on the basis of a different reason’.[50]A case of whistleblowing dismissal is not made out simply by a 'coincidence of 13 of 82 timing' between the making of disclosures and termination (Parsons v Airplus International Ltd [2017] UKEAT/0111/17). FINDINGS OF FACT[51]Having considered all the evidence, we find the following facts on a balance of probabilities.[52]The parties will note that not all the matters that they told us about are recorded in our findings of fact. That is because we have limited them to points that are relevant to the legal issues.[53]Before making our final decisions on any events, documents, messages, (or absence of documentation/communications), we stepped back and looked at the events in the round. We also took this approach before deciding whether protected disclosures lead to the Claimant being subjected to detriments and or dismissal (“lead to” being used here as shorthanded for the applicable statutory tests/language which we have applied).[54]The Second Respondent was at the relevant time a wholly owned subsidiary of Equiti Group Ltd, a holding company of more than 12 companies which operates globally (CWS6) (“Equiti”). Equiti is a financial services group which specialises in providing liquidity to its clients in foreign exchange and contract for differences (“CFD”) transactions. It is regulated in the UK by the Financial Conduct Authority (“FCA”) and is subject to the FCA’s regulatory regime, the Senior Managers and Certification Regime (“SMCR”). The First Respondent (Mr Najjar) is the cofounder (alongside Mr M Ketmawi) and is Group CEO of Equiti. Mr Najjar sits on the UK Board of R2 and on the Group Executive Committee (referred to as “Group ExCo”) and is himself approved by the FCA to be an executive director of R2 [INWS6].[55]The Claimant was employed by R2 from 4 April 2022 [594] until he was dismissed on 01 August 2022 with immediate effect and paid in lieu of his contractual notice period [401]. At the time of the Claimant’s dismissal he was employed as R2’s CEO ‘in waiting’ and reported to Mr Najjar. As referenced above the Claimant never formally became R2’s CEO because this required the approval of the FCA. Approval was not sought by R2 as we will come to explain.[56]During the Claimant’s employment, Mr Najjar [R1] was the Claimant’s line manager [INWS6]. It is the Claimant’s case that Mr Najjar was the substantive decision maker regarding the decision to terminate his employment. We accept that Mr Najjar was the ultimate decision maker.[57]We accept the details provided as follows by the Respondents in their Grounds of Resistance [69]: The Claimant’s role as CEO for R2 required him to perform one or more senior manager functions (SMFs) for R2 for the purposes of SMCR. The consequence of this was that: Pursuant to s59 of the Financial Services and Markets Act 2000, 14 of 82 the Claimant was required to be approved as a senior manager function holder (SM) by the FCA as fit and proper to perform the role of CEO of R2; and Pursuant to paragraphs 1.1.1(4) and 1.1.1(5) of FCA’s ‘Fit and Proper test for Employees and Senior Personnel’ section of the FCA’s Handbook (FIT), R2 was, at all times, required to be satisfied that the Claimant was fit and proper to perform his role as CEO of R2. For the purposes of this test, ‘fit and proper’ is a reference to the principles set out by the FCA in FIT. Broadly speaking, this required the FCA and/or R2 to be satisfied that the Claimant had the requisite: Honesty, integrity and reputation; Competence and capability; and Financial soundness to perform the CEO role he had been hired to do. The Claimant signed an employment contract with R2 on 04 April 2022. Relevant terms of the Claimant’s employment contract state that: The Claimant’s job title of Chief Executive Officer was subject to FCA approval (Schedule 1); The Claimant’s employment was terminable without notice if he failed to obtain the relevant regulatory approvals or certification required to perform his role (clause 3.1); and The Second Respondent may dismiss the Claimant with immediate effect and without giving notice or making payment in lieu of notice if the Claimant failed or ceased to be fit and proper to perform his role or the responsibilities or functions assigned to him from time to time (clause 15.4.9). In order to be approved by the FCA as an SM, the Claimant was required to: Submit an application form to the FCA (called ‘Form A’); and If requested, attend an interview with the FCA. A Form A in respect of the Claimant was never submitted by R2 to the FCA. Key concepts and terms[58]We set out at this point a number of key concepts/terms relevant to this claim:58.1 Payment for Order Flow (“PFOF”) – PFOF is a practice that is not lawful in the UK where a financial broker receives a payment from a seller for a 15 of 82 sale to a customer. This is a complex area of financial regulation designed to protect customers. It is designed to address the risk of a broker directing a customer to the seller that will pay the largest commission to the broker rather than directing the customer to the seller that will give the customer the best outcome.58.2 Bloom Capital LLP (“Bloom”): this was a New Zealand based legal entity within the same group of companies as R2. We accept Mr Fulton’s evidence [RFWS8] that R2 provided services to other entities in its group of companies which included the provision of risk management services to Bloom. Those services are documented under a Service Level Agreement (“SLA”) between R2 and Bloom.58.3 Straight to Process flow (“STP”) – We do not need to define STP (indeed we were not provided with a definition by the parties). It is not disputed that in an email of 14 May 2022 the Claimant queried an entry in R2’s draft financial statement for 2021 and in particular the Director’s Report statement about R2’s principal activity drawing a distinction between STP and Risk Management Services. His email said: “Unless I'm missing something, I think the statement of the Principal Activity in the Director's report does not match with the statement in the second paragraph of the Financial Results section in the company strategic report. If a significant proportion of our revenue is driven by our risk-management function, then STP (Straight to Process) or execution only service is not our principal activity. Receiving a profit share from BLOM for STP flow to them is one thing and managing the risk for BLOM (on behalf of BLOM) is another thing.” [1401] BLOM is a reference to Bloom.58.4 Transfer Pricing (TP) – We accept Mr Fulton’s evidence [at RFWS8-9] that TP represents the price that one company in the group pays another company in the group for goods and services received by it from that other group company. We accept that Equiti had a technology team in Cyprus that provided technology services to a number of entities across the Equiti Group. The Cyprus entity charged the entity benefiting from the technology services received based upon an arms-length principle for pricing goods and services. We were told that TP is not, in and of itself, illegal tax evasion or breach HMRC rules provided that the provision of the services is priced at arms length via a service level agreement. The Claimant used the term “potential illegal tax avoidance” [CWS76b-77] but our understanding, which we do not consider to be controversial, is that he meant illegal tax evasion on the basis that avoidance is normally used to refer to a legal use of the tax rules to reduce tax burden whereas evasion is illegally evading rules that require tax to be paid. If Bloom paid more than an arms length price for Risk Management Services to R2 then we understand that might be illegal tax evasion. Of course, in these matters, whether something is correctly priced at arms length might be a matter of judgement rather than maths or science. We accept the Respondents’ submission that transfer pricing is an essential feature of any multinational business.58.5 Retail Business / Retail Permission – We accept Mr Najjar’s evidence 16 of 82 [INWS49] that R2 had a ‘Retail Permission’ from the FCA – that is that R2 could (and we understand did previously) take on customers who were individuals (“Retail Clients”) rather than ‘institutional investor clients’ (“Institutional Clients”). Retail Clients are seen by the FCA as potentially less sophisticated or more vulnerable because they are likely to have lower levels of investment expertise than Institutional Clients and Retail Clients are therefore in need of more protection. The FCA therefore regulates more tightly those institutions that have a Retail Permission allowing them to take on Retail Clients than it does those who only take on more sophisticated Institutional Clients. Having a Retail Permission can therefore be seen as a ‘badge of honour’ in that it might suggest that an organisation has been more closely scrutinised by the FCA and reached a higher bar in its regulatory compliance. A strategy paper prepared by Mr Holmes in the Spring of 2022 on which the Claimant provided comments noted [1200]: “Equiti Capital needs to demonstrate a viable business to the FCA, otherwise it runs the risk of losing its permissions. Currently the Company doesn't maximize the permissions already held (ref. recent discussions on the Retail Permission) & consequently it could be argued that as of today it is diminishing its viable business model and potential business opportunities.”. Recruitment of the Claimant[59]In early 2022 Equiti started a ‘more intensive’ search for a permanent CEO for its UK entity, R2. This was because Mr Holmes had been acting as interim CEO for 18 months and he wanted to take a sabbatical [INWS8].[60]Mr Isbeer (R2’s Global Head of Brokerage Sales) had known the Claimant for many years and suggested him to Mr Najjar as a potential candidate for the CEO role. Mr Najjar had also known the Claimant for a number of years from finance conferences in London which they had both attended. The Claimant therefore came into consideration for the UK CEO role an interview was conducted with him by Mr Najjar on 10 February 2022 [512-517].[61]Further interviews were then conducted as follows:61.1 Mr Myers and Mr Fulton on 14 February 2022 [2118 and 2119];61.2 Mr Webb on 15 February 2022 and over lunch around 24 February 2022 [2120-1, 456, 459-467];[62]We accept the Claimant’s submission that feedback on the Claimant from these meetings was very positive as corroborated by the contemporaneous documents. At some point after these interviews, around 25 February 2022, the Claimant provided the first version of his CV [441, 2179] to R2.[63]The Claimant then had interviews with:63.1 Ms Dehal (Non-Executive Director and Chairman of R2 until May 2022) on 28 February 2022 [459-468];63.2 Mr H Haider (Group Chief Legal Officer) [470, 631] on or about 1 March 17 of 82 2022 and then over dinner on 6 April 2022;63.3 Ms Ilbak [MIWS7, 1756] on 3 March 2022.63.4 Ms Abeygoonaratne (Head of Human Resources until August 2023) on 4 March 2022 [489-492];63.5 The UK Head of Compliance (who was new in post and only remained employed until 1 July 2022) on 10 March 2022 [502-7]63.6 Ms Chouhan (Chief Financial Officer until January 2023) also on 10 March 2022 [508-511];[64]We did not hear evidence from Ms Dehal, Mr Haider, Ms Abeygoonaratne or Ms Chouhan.[65]As referenced above, R2 at this time had a new UK Head of Compliance who was in his probation period. Mr Graham was the Global Head of Compliance and his employment with Equiti ended in July 2022. We did not hear evidence from either the UK Head of Compliance or Mr Graham. However, it was not in dispute that they were compliance experts and that the UK Head of Compliance was, in particular, an expert in the FCA regulatory regime which the Claimant would need to satisfy in order to be appointed CEO.[66]We consider that the following extracts from the UK Head of Compliance’s candidate assessment form dated 10 March 2022 of the Claimant are, on the balance of probabilities, likely to be a fair assessment of the Claimant’s compliance and regulatory skills and experience, taking into account the wider evidence that we heard [502-507] (the underlining is our emphasis): Does the candidate have the appropriate educational qualifications or professional training for this position? Salam has recently (2019) obtained a Masters, in Financial Regulation & Compliance and has an extensive background within the same industry as Equiti Capital. Does the candidate display the ability to challenge decisions when necessary? During the interview Salam did not raise contrary views, but neither were the questions posed particularly conducive to testing this. Salam highlighted he liked to work collaboratively and actively support colleagues and indicated he had firm views on how a UK regulated business should be run. Salam indicated that how he questions decision, is by making individuals to rationalise what they want to do and why, and then provides his advice. Does the candidate display competency to perform the SMF function - Discuss past work experience, additionally if appropriate, 18 of 82 the Leadership Ability of the candidate should be explored - Does the candidate demonstrate the leadership skills necessary for this position? Salam, to date, has not held an SMF function under the SMCR regime, only historical CF functions under the Approved Persons regime, with the last being with Citypoint Trading Ltd (now called CPT Markets UK Ltd since 18th November 2019) as CF1 (Director) and CF30 (Customer) until 30th August 2019. He additionally held the CF10 (Compliance) and CF11 (MLRO) roles for an interim period from 28th October 2016 to 10th September 2018, and he historically held the CEO position from April 2009 until Jul 2014, however this was whilst the firm was an Appointed Representative not directly authorised by the FCA. Salam identified that he had applied for the SMF 3 (Director), SMF 16 (Compliance) and SMF 17 (MLRO) roles with 3 other firms, but significant delays, beyond the FCA’s stated targets of 90 days had occurred (circa 4-6 months), and these applications had been subsequently withdrawn. From his CV these roles would appear to be with VIBHS Financial Ltd, Orca App Ltd and Fair Forex (UK) Ltd. It is worth noting that both Fair Forex (UK) Ltd and Orca App Ltd. were/are in the process of seeking full FCA authorisation, with Fair Forex withdrawing its application in October 2021. Salam highlighted that the withdrawals of the recent applications were due to the offer from Equiti, however it should be noted as part of any application Equiti Capital must be fully aware of all circumstances surrounding the withdrawal of any FCA application (firm and individual) and whether there are any indicators that this could call in to question Salam’s fitness and propriety. The recent applications (VIBHS in October 2021 and Orca in June 21) and subsequent withdrawals may also give rise to concerns from the FCA over longevity and stability. It should also be noted that the only UK full scope firm that Salam has worked for in the past 6 years is CPT Markets UK, with all the others being limited licence match-principal brokers. [Question which for brevity we do not quote] As identified above whilst working for Fair Forex [UK] Ltd, the firm was going through an FCA application, that application was withdrawn in October 2021, and the company is now subject to an active proposal to strike off at Companies House. Full details will be required to be provided for the reasons behind the withdrawal and the current state of this company, considering Salam left in October 2021. Full DBS and credit checks will need to be conducted as well as SYSC 22 regulatory references obtained from: - VIBHS Financial Ltd - Orca App Ltd and it’s Principal Firm (Risksave Technologies Ltd.) 19 of 82 - Vantage Global Prime LLP - Fair Forex (UK) Ltd – if possible - CPT Markets (UK) Ltd Additional directorships have been identified for Salam with Filbert Terrace Management Company Ltd (UK Company # 10403913) since March 2018, and with Spot Logistics Ltd (UK Company # 12800873) since August 2020 where he is also the sole owner, which were undeclared on the CV, identification of these entities and the roles should be disclosed to Equiti, to identify potential conflicts of interest. Salam will also need to close or stop his sole trader consultancy business (as fxandcfd.com), as this does present a conflict. [Question which for brevity we do not quote] Interview Report FCA Salam gave a high-level overview of what he expected the FCA’s objectives to be in the coming years, primarily identifying that the FCA’s objectives were about the outcomes of customers, and putting customers first, which he saw as the building blocks for building a profitable firm. SMCR Given he would be assuming the prescribed responsibilities for the Senior Managers Regime, the Certification Regime and the Conduct rules training, when asked on his knowledge of these areas the answer was very high level, touching mainly on the requirement to conduct background checks fill out a fitness & propriety questionnaire and issue certificate. It would be recommended that dedicated training on SMCR be provided given that Salam has not yet held a SMF function and is due to hold the relevant prescribed responsibilities. It’s worth noting I am aware from previous applications that the FCA pay close attention to individuals assigned the SMCR prescribed responsibilities if they haven’t held an SMF, wanting to understand what they know and what support they will have, given they don’t have the direct experience operating under the regime. Responsibilities Once the specific responsibilities for Salam’s role are defined, it would be a good approach to carry out an independent skills gap analysis against these responsibilities, so that Equiti can address and gaps with dedicated coaching and training as part of his learning and development plan. Management Style 20 of 82 Salam stated he like to be collaborative but allow people the space to do their work, and act as a mentor. Salam was articulate and presented himself well and displayed good listening skills. He did however highlight that he thought technology can become a “bit of a monster” and so he likes to keep things simple. Salam stated he was an advocate of hybrid working and enjoys the setup and ability to work from home but recognises that face to face interactions are also valuable. In Summary I think there may be some gaps in his recent knowledge of the regulatory environment, potentially around SMCR, however he does possess a long history of experience within the sector and is professional, articulate and collaborative. He also came across as very interested and understanding of the financial side of the business, querying Sheetal on various aspects of the finance system and processes. I think it would be a good approach to conduct a more in depth and independent skills/knowledge gap assessment against the responsibilities that he will assume, to ensure any gaps are identified and an appropriate induction programme and learning and development plan can be documented as part of the application. It’s also essential that full disclosure on the previous applications and withdrawals is provided, as without this, and from personal experience, this could result in the application being considered by the “Non-Routine” authorisations team, meaning a more protracted and difficult application, which could reflect poorly on Equiti.[67]The UK board of R2 then approved the appointment of the Claimant on 17 March 2022 [1231] and, as we have said, the Claimant’s employment then commenced on 4 April 2022. The Claimant had provided an update to his CV on 31 March 2022 to the UK Head of Compliance. Introduction of Claimant to Mr Holmes[68]We accept that Mr Holmes (NHWS10-11) as the interim CEO was not involved in the decision to recruit the Claimant and did not interview him but was introduced to him in the second half of March 2022. We accept that the purpose of this introduction was to discuss the onboarding and transitional process and to give the Claimant an insight as to the work that Mr Holmes was undertaking and discuss how they could work together to ensure a smooth transition. Mr Holmes said that his impression of the Claimant was that the Claimant “did not come across as particularly proactive; his style was very laid back and relaxed”. We formed the same impression of the Claimant from the evidence that we heard. We accept Mr Holmes’ evidence that the Claimant did not ask him lots of questions about his role and responsibilities nor did he seem overly eager to engage with Mr Holmes. 21 of 82 Announcement of Claimant’s appointment within R2[69]His engagement by the R2 was announced to the company on the same day as the Claimant’s employment started (4 April 2022) as follows [617]: Dear colleagues Please join me in warmly welcoming Mr Salam Alaswad, our new Chief Executive Officer of Equiti Capital. Salam brings over 20 years of extensive industry experience working with full scope FCA regulated brokers in the UK and aboard. His technical and regulatory knowledge along with his LLM (Masters of Laws) in financial regulations and compliance has seen him become a leading expert witness in the industry, covering both civil and criminal cases. Salam will officially succeed Nigel Holmes as CEO of Equiti Capital after FCA approval. We are very grateful to Nigel for his solid support as interim CEO of Equiti Capital since July 2021 and his invaluable contributions to the UK board since early 2018. Nigel will be taking a sabbatical from the end of July." Marta joins Equiti in Dubai, reporting directly to Iskandar and will be a member of the Equiti Management Committee. Please join me in wishing Marta much success at Equiti Group, and thanking Nigel for everything achieved in HR to date. Iskandar Najjar Group Chief Executive Officer Background checks and investigation of Claimant’s CV[70]Ms Ilbak explained to us that the UK HR and compliance teams then began their usual background checks in respect of the Claimant.[71]On 6 April 2022 the UK Head of Compliance sent an email to Mr Holmes copying Ms Abeygoonaratne and Mr Graham [652] in which he expressed concerns about:(i) the limited information the Claimant had provided on his SMF Skills Gap Analysis Self-Assessment form; and(ii) the fact that the Claimant had identified his relevant experience on that form as being derived from his role at CPT Markets (UK) Limited, even though his role there ended prior to the implementation of the SMCR and the FCA register did not identify the Claimant as holding that CEO role. The UK Head of Compliance in his email suggested that R2 obtain an independent assessment of the Claimant’s skills and knowledge and that prompted R2 to set up an assessment of the Claimant with a third party called Effecta who carried out a video recorded interviewed with the Claimant on 4 May 2022 which we comment on further below. 22 of 82[72]There were exchanges of emails between Ms Abeygoonaratne and the UK Head of Compliance [668 – 672] in respect of questions they had on the details the Claimant had included in his CV. We can understand why this was being scrutinised because, as it became apparent, there were legitimate questions as to whether the Claimant’s CV gave an accurate picture of his experience. Some of the points being looked into were errors by the FCA on its own register. Others were areas where more detail was required on the status of the positions that the Claimant mentioned on his CV. It might have been preferrable for the Respondent to have scrutinised his CV and to have done more due diligence on the Claimant before making an offer to him.[73]On 24 March 2022 [525] the UK Head of Compliance was certainly advocating ensuring that ‘all the I’s were dotted and t’s crossed’ before they made an announcement of the Claimant’s appointment given the scrutiny that there might be of an application to the FCA for the Claimant to be appointed as CEO of R2. At the hearing the Respondents unduly asserted that the Claimant had been dishonest on his CV. As we have said, there were clearly questions that needed to be answered on the Claimant’s CV (because there were discrepancies in it). However, ultimately those questions were answered. What is clear is that the fact that they had arisen started to create a level of unease with Mr Najjar and others about the Claimant and this was then compounded by feedback they received on him from Effecta and, as we will come on to address, R2’s External Counsel. Unease about the Claimant[74]The question marks over the Claimant’s CV led to Mr Najjar feeling a certain unease about the Claimant which is reflected in the following exchange between Mr Najjar and Mr Haider on 7 April 2022 [675]: Najjar to Haider: Did you speak to him? Haider to Najjar: No I didn't. I've been thinking a lot about it. Recalling all interactions. He can be a little all over the place, slightly haggard and not very articulate. He's prone to making silly mistakes, he knows the industry but he isn`t the quickest gun in town. But I can't imagine he's a sharp trickster and bold liar. Small time maybe. Not saying we don't take the right action, and to be honest even little white lies aren't cool, and may well merit us terminating, but I'm just trying to gauge if he's small time petty liar or more sinister Najjar to Haider: Yes- we have to do that. Also, it appeared Paul G has been pushing a lot of the investigations. He had felt threatened with him coming on board. In any case, Marta will investigate and provide feedback Haider to Najjar: Interesting bit, on Paul G. Yes let's wait for input from Martha. Don't want to tip off Salam something is wrong but would be good if he didn't update his Linkedln. As it is we were going to just make an internal announcement, but just to be sure. Maybe Rika should mention that to him? 23 of 82 Najjar to Haider: Yes-- will get Marta to mention it Claimant’s self assessment – skills gap analysis[75]On 4 April 2022 the UK Head of Compliance had sent the Claimant a Self Assessment – Skills Gap Analysis [656 – 659]. We conclude that the way in which the Claimant completed this document was not thorough, lacked thought and showed a failure on the part of the Claimant to understand the importance of the assessment for the FCA approval process. It gave Mr Najjar and R2 legitimate cause for concern.[76]For example, the Claimant said he considered himself to have high skill level on everything (in areas as diverse as marketing, information technology, human resources, legal and outsourcing) and had in depth experience on everything except ‘agency’. He only described his experience of Brokerage and ‘Whole Business’ and when doing so used the same wording for each being: “During my 11 years at CPT Markets as a CEO (including 2 years as a CO/MLRO), I was heavily involved in all aspects of the business including but not limited to sales & marketing, customer services, finance risk and operational resiliencies, HR (however, a large part of HR was outsourced), technology, and legal & regulatory compliance. Under my leadership, CPT Markes as an MIFID investment firm was remarkably viable across business models.”. In other areas of expertise he just said “ditto”.[77]The UK Head of Compliance had to press the Claimant for more detail and tried to steer him in the right direction giving an example of how he would answer a question [646].[78]The Claimant’s response to cross examination on this was not persuasive (essentially he maintained that he was an expert in HR and legal and had only downgraded his answer in respect of IT because he was not a software engineer or developer). This belied an overconfidence in his expertise and skills and a lack of awareness of the areas in which he might need development or to rely on the expertise of others. Completion of Form A[79]Similar issues then arose with respect to the Claimant’s completion of Form A (which would have been submitted to the FCA had R2 ultimately applied for FCA approval for the Claimant to be its CEO). Work was started on this at the same time as the work on the skills gap analysis.[80]We accept Ms Ilbak’s evidence (corroborated by Mr Holmes) that although by 13 June 2022 the UK Board had approved the submission of the Form A to the FCA, the UK Head of Compliance did not want to put his name to the Form A. We can understand why the UK Head of Compliance ultimately refused to endorse the Form A – he did not feel the submission would be well received by the FCA and risked leaving R2 open to needing to provide justification for the submission.[81]We note here that Ms Ilbak felt at that time that, whilst the Claimant was not the complete candidate and he perhaps did not at that stage have a full grasp of R2’s operations and had gaps in knowledge of the SMCR regime and R2’s 24 of 82 regulatory obligations, those issues could be fixed (albeit it would take longer than R2 had anticipated). Effecta – assessment of the Claimant on 5 May 2022[82]As we have said, the UK Head of Compliance recommended that Effecta Consulting Limited carry out a third party assessment of the Claimant.[83]Mr Holmes with the UK Head of Compliance and Ms Abeygoonaratne had an initial call with Effecta on 27 April 2022 in which Effecta confirmed the discrepancies that the UK Head of Compliance and Ms Abeygoonaratne had identified in the Claimant’s CV.[84]Effecta then interviewed the Claimant on 5 May 2022 and the initial feedback that Effecta gave to Mr Holmes validated the UK Head of Compliance’s suggestion that Effecta be engaged.[85]Mr Holmes and Mr Najjar met with Effecta for a debrief meeting on 11 May 2022 [1353] and Mr Holmes listened to the recording of the interview they had conducted. We accept his evidence that it was apparent from the recording that the Claimant’s answers were extremely generic and not properly considered but that Mr Holmes wanted to give the Claimant the benefit of the doubt.[86]We note here the response that the Claimant gave to a question posed by Ms Bowyer about what is meant by, under the SMCR regime, the term Material Risk was not at all persuasive. The transcript records the following [1920]: CLEMENTINE BOWYER: What about the term "material risk taker"? Any of that? How would you interpret that? SALAM ALASWAD: Yeah. A material risk taker. Yeah, it doesn't -- yeah, I can’t hear it now, so yeah. But I can -- I guess it says what it says on critical risk taker, material risk taker. CLEMENTINE BOWYER: It's -- SALAM ALASWAD: Yeah. CLEMENTINE BOWYER: Yeah. I mean, yeah, defines itself. But are you aware of why you need to define material risk takers, for what regulatory purposes you'd be considering that? SALAM ALASWAD: I think it's all within what I have said. It's about the corporate structure of the company systems and control. Individual liability, probably, I'm not good in repeating exactly the words, the language they are (Inaudible). But I understand it, all the concepts for what is required. Yeah, I understand that. Yeah. But yeah, yeah. Short answer, no. CLEMENTINE BOWYER: That's fine. How would you describe, I suppose, in your mind, what do you think the FCA has as an expectation of you as CEO and holding the SMF function? 25 of 82 SALAM ALASWAD: Well, I think the FCA, they expect me to be fully responsible about firstly the prescribed responsibility, which is the conduct etc. But the individuals and the culture within the company. Now, again, I think they anticipate from any CEO to have the knowledge, the skills to run a similar business, if they have. They have that, they understand the concept of preventing harm for customer. All their principle, all their (Inaudible) principal business. They anticipate someone. Everyone should understand that. But also going into the financial crimes and the legal side, what could be where the company could be vulnerable. Or could be exposed to financial crimes and … CLEMENTINE BOWYER: Yeah, which is obviously topical at the moment. Unfortunately --[87]The Claimant argued that this extract was cherry picked to portray him in the worst light and we have taken that possibility into account. We accept Mr Holmes’ evidence that Effecta’s feedback was that, whilst the Claimant had expertise in certain areas, they felt he needed a longer transitional period than R2 would ordinarily provide. We accept Mr Holmes’ evidence that whilst the assessment feedback was significantly less positive than he had expected it was not so bad that he thought they needed to think about appointing someone else as CEO and Mr Holmes’ focus was instead on helping the Claimant get to where he needed to be for Form A to be submitted with confidence and for the Claimant to be well prepared should the FCA require the Claimant to under an interview. R2 was concerned that Effecta thought this process might require a further three months of training and the Claimant, R1 and Ms Abeygoonaratne thought this was excessive [CWS38] and there was some question about whether this was Effecta ‘feathering its own nest’. Effecta issued its final report by 26 May 2024 [1473 – 1483].[88]We note that a WhatsApp exchange between Ms Ilbak and Mr Najjar on 5 May 2022 records the following exchange [1760]: [05/05/2022, 09:20:57] Marta: Im excited about the new office, I saw it yesterday with Salam, hope we will sign asap [05/05/2022, 09:21:12] Iskandar Najjar: It looks cool- very equiti vibe to it [05/05/2022, 09:21:20] Iskandar Najjar: Will help reenergise people [05/05/2022, 09:21:24] Iskandar Najjar: How did you find Salam [05/05/2022, 09:21:42] Marta: Not an easy question to answer [05/05/2022, 09:22:07] Marta Let's have a debrief asap [05/05/2022, 09:23:0-] Marta: I like him a lot, but I cannot ignore the feedback from the external consultants after his interview yesterday 26 of 82 [05/05/2022, 09:23:27] Marta: We need to be careful in assessing the situation [05/05/2022, 09:24:451 Iskandar Najjar: Their feedback is FCA specific? [05/05/2022, 09:25:001 Iskandar Najjar: Was it shared with you and rika only? [05/05/2022, 09:25:11] Marta: Yes and a complete contradiction to Salams assessment [05/05/2022, 09:25:18] Marta: Me, Rika and [UK Head of Compliance] [05/05/2022, 09:25:29] Marta: I agreed with Nigel not to participate [05/05/2022, 09:25:52] Marta: And I asked the consultants to give feedback to Salam and to you as well next week [05/05/2022, 09:25:57] Iskandar Najjar: I wish [UK Head of Compliance] hadn’t either [05/05/2022, 09:26:16] Iskandar Najjar: Did he have to be there? [05/05/2022, 09:26:3-] Marta: [UK Head of Compliance] had to as the head of [05/05/2022, 09:26:46] Marta: And he can help Salam to prepare for the interview [05/05/2022, 09:27:36] Marta: We have 2 very contradictory positions/assessments now [05/05/2022, 09:27:51] Marta: I lean strongly towards Salam POV [05/05/2022, 09:28:16] Marta: However this would mean that we have been manipulated from [UK Head of Compliance], Nigel etc. [05/05/2022, 09:28:20] Iskandar Najjar: Let’s have a call and discuss the details [05/05/2022, 09:28:35] Marta: Agree [05/05/2022, 09:28:58] Iskandar Najjar: In what sense? Why does Nigel even have an opinion on the matter [05/05/2022, 09:30:301 Marta: Everyone is so afraid of the FCA and puts us through so many assessments and obligations and regulations, while according to Salam, most of it seems to be BS and not necessary [05/05/2022, 09:31:22] Iskandar Najjar: Taking a step back and looking at the wider industry 27 of 82 [05/05/2022, 09:31:4-1 Marta: On the other hand I am concerned that Salem is overly confident, both sides seems to have extrem views [05/05/2022, 09:31:421 Iskandar Najjar: I think we are leading in compliance in brokers of our size [05/05/2022, 09:32:04] Iskandar Najjar: Our compliance set up and infrastructure -s that of a company that is 10 times our size [05/05/2022, 09:32:10] Marta: It seems we are over compliant [05/05/2022, 09:32:26] Iskandar Najjar: Yes- that is my concern. Can’t we get consultant from him side to give us opinion [05/05/2022, 09:32:27] Marta: Yes, Salam shared with me the same numbers [05/05/2022, 09:33:43] Marta: As soon as we have the written feedback, we can ask Salam for a second external opinion, but this might be an overkill in terms of prep [05/05/2022, 09:33:59] Marta: Let’s talk today, will be easier to explain[89]We find that this exchange reflects the unease that the Effecta assessment had created about the Claimant’s capabilities to perform in an FCA interview. We find that Mr Najjar wished that the UK Head of Compliance had not been at the interview with the Claimant because of his concern about the UK Head of Compliance negatively influencing Effecta’s assessment of the Claimant.[90]This was understandably troubling to Mr Najjar because he had championed the Claimant and clearly thought that the Claimant was going to be the answer to their search for a permanent UK CEO. However, the Claimant’s performance in the interview (coupled with Effecta’s suggestion that the Claimant needed three months of training (CWS36)) called into question Mr Najjar’s (and others’) judgement of the Claimant’s capabilities. There had already been questions about his CV and this interview created some further difficulty for Mr Najjar. Mr Najjar and others did not know how much faith to place in the Effecta assessment because:90.1 there were also question marks about whether the UK Head of Compliance and Mr Graham had felt threatened by the proposal to appoint the Claimant and might have been seeking to undermine the Claimant unduly.90.2 It had been the UK Head of Compliance who had instructed Effecta for R2, he had already raised concerns about the Claimant and there was a concern that he might have primed Effecta to give a negative view of the Claimant.90.3 The UK Head of Compliance was still himself in his probation period and there were concerns about how well he was doing.[91]We accept that Mr Najjar also reviewed parts of the video of the interview Effecta conducted with the Claimant. We accept his evidence that what stood out for him 28 of 82 in the interview was when it came to explaining the FCA rule book, the SMCR regime and explaining the nature of MRTs (Material Risk Taker), there was a lot of ambiguity in the Claimant’s answers which included a lot of loose definitions and highlighted the gap in the level of confidence that the Claimant had portrayed to Mr Najjar as against what he was showing and depicting during this interview with Effecta. We accept Mr Najjar’s evidence that he had hoped that this external assessment would support his initial, favourable, view of the Claimant’s competence and suitability for the role of UK CEO. We accept with the benefit of hindsight Mr Najjar would probably have acted more swiftly in resolving the entire matter and terminating the Claimant’s employment but was personally invested in ensuring his success because Mr Isbeer had recommended him, and Mr Najjar himself had championed the Claimant through the hiring process. Second opinion from R2’s External Counsel[92]As a result of this Mr Webb, on 10 May 2022, instructed R2’s External Counsel to carry out another independent assessment of the Claimant [PB165-170]. S43B – qualifying disclosure[93]In the list of issues the Claimant relied on both Section 43B(1)(a) (i.e. information tending to show a criminal offence had been, was being or was likely to be committed) and (b) (i.e. information tending to show a person had failed, was failing or was likely to fail to comply with any legal obligation). He gave no evidence in his witness statement explaining why he thought a particular piece of information disclosed by him to the Respondents tended to show that a specific criminal offence had been committed was being or was likely to be committed (albeit he did of course make reference to HMRC tax rules and FCA rules and requirements). We have taken it that he relied instead on 43(1)(b). PD1 and PD2 – 14 May 2022[94]On 6 May 2022 Ms S Chouhan (R2’s UK Chief Financial Officer) sent an email to Mr Holmes, the UK Head of Compliance, Mr Webb, Ms Abeygoonaratne and the Claimant saying: Please see attached the 2021 draft financials for Equiti Capital UK Limited for your review and feedback. The only material change to the numbers since it was last presented at ARC is the reclassification of Intercompany recharge of = from IT expenses to cost of sales. Auditors have reviewed the first draft and most of their feedbacks are incorporated in the attached version. They are due to perform the final reviews early next week and should there be any material changes following their review, I will notify everyone. We are aiming to sign the accounts on Thursday, 12th May. Hence, would appreciate if you could please provide feedback by end of Monday, 9th May.[95]The Claimant sent two responses the first (PD1) on 14 May 09:55 [1400] said: 29 of 82 However, I'm not sure if you wish to reconsider this statement "the company remained highly cash generative during the year increasing cash balance by $42.7m". While I appreciate that clients who accepted a TTCA are considered general creditors of the Company, from my point of view, this statement may give a false impression that this money is part of the turnover/revenue instead of being clients funds![96]The second (PD2) sent on 14 May 2022 at 12:32 [1401] said: Dear All, sorry, but one more thing: Unless I'm missing something, I think the statement of the Principal Activity in the Director's report does not match with the statement in the second paragraph of the Financial Results section in the company strategic report. If a significant proportion of our revenue is driven by our risk-management function, then STP (Straight to Process) or execution only service is not our principal activity. Receiving a profit share from BLOM for STP flow to them is one thing and managing the risk for BLOM (on behalf of BLOM) is another thing.[97]Mr Webb then said to Ms Chouhan in an email on 15 May 2022 at 5:46 [1401] He does have a good point regarding the 'cash generative' piece — suggest we change this On the other point, mark up and commissions were a very similar number to the Bloom risk management fees for 2021. In financial terms you can argue they are both our principal activities, suggest we just reflect that in both sections of the report[98]As regards PD1 the Claimant argued that he was disclosing information that tended to show that the statement in the current draft was a misrepresentation of the true position. Mr Webb accepted in his oral evidence that this was a reasonable position for the Claimant to have held and he agreed that an amendment should be made in the accounts to reflect it. However, we accept the Respondents’ submission that Ms Chouhan was seeking feedback on the draft accounts for R2 that had already been considered by R2’s auditors. The Claimant identified an ambiguity in the description of cash balances in the narrative to the accounts (as opposed to the numbers themselves which are the part subject to audit input) which could lead to confusion. Mr Webb agreed that a change should be made to the draft accounts and made such amendment promptly thereafter. We accept the Respondent’s submission that the reason that accounts are sent round in draft is to pick up errors of this nature and we accept Mr Fulton’s evidence that Ms Chouhan was prone to making some mistakes in terminology. We accept that the comments made by the Claimant in this regard did not amount to the disclosure of information which tended to show wrongdoing and that it was a task more akin to proof reading. 30 of 82[99]As regards PD2 the Claimant argued that he was disclosing information that tended to show that the statement of the Principal Activity in the Director’s report misrepresented the true position. Mr Webb agreed that an amendment should be made in the accounts to reflect it. The Claimant further argued that he was disclosing information that tended to show in his reasonable belief that R2’s profitsharing arrangement with Bloom Capital constituted illegal PFOF. Mr Webb accepted in oral evidence, the words “receiving a profit share from BLOM for STP flow” is the definition of PFOF. In support of this interpretation the Claimant pointed out that he had received a board pack ahead of the 26 April 2022 board meeting in which the revenue sharing arrangement with Bloom Capital had been described as “profit share” [1263]. He had also seen the description of the Bloom Capital arrangement as “trading activities” generating receipts of $6M in December 2020 in the draft financial statements [1440]. Both Mr Fulton and Mr Webb accepted that it would have been reasonable for the Claimant to be concerned by those descriptions.[100]The Claimant was picking up on a potential inconsistency in the financial report that arose between the following statements:100.1 “Whilst the Company continues to have a significant proportion of its revenue driven by its risk management function, which is reliant on underlying market volatility, it has started to diversify and increase the number of services which the Company supplies to the overall Equiti Group as a way to diversify its revenue model” [1408]; and100.2 “The Company's principal activity is to provide execution-only brokerage services for professional and institutional clients to trade CFD's in spot forex, metals, indices and commodities. The Company also provides risk management and other services to the overall Equiti Group” [1412].[101]We find that the key sentence in PD2 is “Receiving a profit share from BLOM for STP flow to them is one thing and managing the risk for BLOM (on behalf of BLOM) is another thing.” At the time we consider that Mr Webb did not read the Claimant’s email as disclosing information that tended to show wrongdoing. We accept the Respondent’s submission that PD2 actually just states that the correct description of the commercial relationship between Bloom and R2 is that R2 receives payment for risk management and not, as he has alleged in his claim, illegal PFOF. As such we accept the Respondents’ position that the Claimant was not making a protected disclosure in this email. The making of suggested corrections, at least in the manner adopted by the Claimant in this regard amounted neither to the disclosure of information which tended to show wrongdoing nor disclosure in the public interest. We accept again that it was a task more akin to proof reading.[102]The Claimant referred to a WhatsApp message sent by Mr Najjar to Mr Isbeer (Global Head of Brokerage Sales) on 15 May 2022. He pointed to the fact that the message was sent one day after the Claimant had made PD1 and PD2 and one day before Mr Najjar was due to sign the financial statements at a board meeting on 16 May 2022. The Claimant pointed to the fact that Mr Najjar in the message said that his trip to London had not been relaxing at all for various reasons, including, “dealing with Salam issue” [1400]. The Claimant said that what 31 of 82 Mr Najjar was referring to in this comment was the Claimant’s observations on the draft financial statements which formed PD1 and PD2. We do not accept that submission. We do not think it probable that the Claimant’s emails which were the subject of PD1 and PD2 and included comments which Mr Webb took on board at the time would have been raised with Mr Najjar and we accept Mr Najjar’s evidence that when he referred to ‘dealing with Salam issue”, he was making reference to:102.1 The concerns raised by the Effecta assessment [946];102.2 The concerns he had on reviewing parts of the video of the Claimant’s interview with Effecta;102.3 The fact that they felt that they needed to get a second opinion from R2’s External Counsel. 20 May 2022 meeting between the Claimant and R2’s External Counsel[103]On 20 May 2022 the Claimant attended an interview with R2’s External Counsel. [PB231-237]. We note here that the Claimant does not allege that he made any protected disclosures at this meeting. The Claimant knew R2’s External Counsel, having instructed him for advice in his role at CPT Markets [CWS38].[104]We accept R2’s External Counsel’s evidence that R2 asked him to give an “independent audit of [the Claimant’s] skills/knowledge/experience” and help Equiti UK “address any potential learning/training gaps before processing the Form A” [PB167].[105]We also accept R2’s External Counsel’s evidence that, whilst he has done quite a lot of mock FCA interviews, a mock interview tends not to be useful without prior preparation and that in his first meeting with the Claimant he wanted to assess what preparation the Claimant needed before a mock interview.[106]Within a short period of speaking with Claimant he realised that a mock interview would indeed not be efficient. We also accept that he explored with the Claimant ways of framing an answer to see what would suit the Claimant.[107]We accept that there might be an art to answering FCA questions in a way that is not dishonest but which honestly frames a risk or issue in a way that does not unduly alarm the FCA. We accept R2’s External Counsel’s evidence that when he referred to the Claimant giving honest answers, what he meant by this was not that the Claimant shouldn’t be honest but that the context and framing appeared absent in the way the Claimant explained his answers and that could potentially expose the Claimant or R2 to unnecessary further queries from the FCA [R2ECWS12-16].[108]After the meeting with R2’s External Counsel the Claimant and Mr Najjar exchanged the following messages [1673-4] on 21 May 2022: Najjar: How did call with [R2’s External Counsel] go this afternoon Claimant: I think it went well .. his feedback is to agree with him what to say and what not to say to avoid shooting ourselves in the foot as I was a 32 of 82 bit too honest (as he said). I will also need to agree on some examples of current work or scenarios .. nothing about extra training requirements Najjar: Ok that’s positive Najjar: Does he recommend we submit the forms soon or did you not touch on that Claimant: I don’t think he will recommend delaying the submission.. all what's required further is another one or two meetings with him to agree on few wording .. this can be done anytime Najjar: Ok Najjar: Let’s look to turn it around next week Najjar: I’ll pick it up with him on Monday Claimant: My recommendation is to submit and wait to do these one or two meetings only when and if the case officer request a meeting.. he’ll speak to you and Paul on Monday I guess Claimant: Things can be different in 3 or 4 months hence no need to agree specific wording now and -n few mothers need to update or agree something else Najjar: Sounds good Najjar: Will follow up on Monday and debrief on steps forward Najjar: Have a good weekend Claimant: Thanks, you too Claimant: By the way, he will help put the application together, he will submit the application himself if we want to[109]We find that this is, perhaps understandably, the Claimant putting a positive spin on how the meeting with R2’s External Counsel had gone and we address the feedback which R2’s External Counsel gave R2 below. PD3 - 24 May 2022 Risk Committee Board Meeting.[110]The minutes of an Executive Committee meeting held on 18 May 2022 record as follows [1448]: NH asked PW to review why the metrics were heavily Group related, and asked the data be reviewed in the context of UK going forward Action PW to look at KRI’s for UK[111]In those notes NH is reference to Mr Holmes and PW is reference to Mr Webb. The Claimant said Mr Holmes raised this point but that it was one that the Claimant 33 of 82 himself had privately discussed with Mr Holmes in person a week or two before that date. The Claimant said that this was a point about the separation of Management Information (“MI”) reporting between R2 and the Group.[112]On 24 May 2022, the Claimant attended a Risk Committee meeting at which Mr Holmes, Ms Chouhan, the UK Head of Compliance, and Ms L Husanu (Operational Risk Analyst of R2), amongst others, were present. Ms D Rangelova (Corporate Secretary Equity UK) prepared the minutes of the meeting. They record [1509]: “8. Operational risk Incident reporting open brackets slides (19 -21) LH presented the status of new risk incidents reported (11 new for April) and their impact an added that these had been discussed at the Group Risk Committee. It was noted that this was data/information on a group level. NH and SA added that there was a need of carving out a distinct reporting of the incidents at Equiti UK alone (New Action Item). LH explained that it was difficult to split the incidents since all of them were correlated an impacted Equiti UK as well as the other group entities and all should be taken under consideration.”[113]At this meeting the Claimant said that R2’s MI reports were not separated from the Group reports and that it was necessary to carve out a distinct reporting of risk incidents concerning R2 alone. We accept that he explained why this was important (i.e.(i) to improve systems and controls in the UK and(ii) because he took the view that a failure to separate the UK MI reports from the Group MI reports amounted to a breach of the FCA rules, specifically Principles 2 (Skill, Care and Diligence) and 3 (Adequate Risk Management Systems) and the relevant conduct rules under SMCR).[114]Mr Holmes agreed with the Claimant’s recommendation to separate MI reports, but Ms Husanu stated that it would be difficult to do. We accept that after Ms Husanu said it would be difficult, the Claimant reiterated his concerns that R2 did not have sufficiently robust systems and controls for the UK entity in this regard.[115]We accept Mr Holmes’ evidence that he thought the Claimant’s point was an interesting one with which he agreed (as the minutes show). Mr Holmes’ accepted in evidence that a lot of Equiti’s processes are interlinked as this was the way the group had structured itself. We accept his evidence that the Risk Committee felt they had the situation adequately covered for R2’s key risks. However, this was noted as a “New Action Item” showing that the Claimant’s observations were taken onboard. We accept Mr Holmes’ evidence that arrangements were then made for the Claimant to sit with Ms Husanu to understand what management information was available and, if there were ongoing concerns, for them to be discussed with her or for further escalation back to Equiti UK’s Risk Committee.[116]The Claimant’s evidence [CWS56] was that on 24 May 2022 at this risk committee board meeting he also said that he had concerns about R2 not having 34 of 82 sufficiently robust systems and controls at a UK level rather than Group level. He said that these concerns were not reported in Ms Husanu’s version of the minutes of the meeting [1494]. We conclude on the balance of probabilities, this was raised by the Claimant. It also became PD7 which is closely related in theme to PD3 [CWS76].[117]As such we find that the Claimant did disclose information to the Respondent that there was a breach of FCA requirements because there was no UK specific risk incident reporting and because the Claimant said he was concerned that R2 did not have sufficiently robust systems and controls at UK level (in contrast to Group level). Public interest[118]As regards public interest, the Claimant in respect of PD3 and his other alleged disclosures asserted that [CWS44]: “These disclosures of information reflected my beliefs regarding R2’s breaches of its regulatory and/or other legal obligations. I contend that I reasonably believed that each of these disclosures was made in the public interest, given the concerning pattern of compliance irregularities I observed at R2 and the nature of R2’s business as an FCA-regulated investment firm handling hundreds of millions of clients’ funds and recruiting dozens of people in the UK. In raising these issues and challenging them, I wanted to make sure that R2 was complying with its own legal and regulatory obligations, not subjecting its employees to risk, playing its role in protecting the integrity of the UK financial system, paying the right amount of tax into the public purse, and ensuring continuity and viability of its business to avoid job losses.”[119]We find that a disclosure of a breach of the FCA rules as alleged by the Claimant in PD3 would be in the public interest for the reasons given by the Claimant. We find that the Claimant had a reasonable belief that this disclosure was in the pubic interest. We also conclude that the Claimant had a reasonable belief that his disclosure tended to show that the Respondent was likely to fail to comply with a legal obligation (being the FCA rules).[120]However, we do not consider that this protected disclosure lead to the Claimant being subject to any detriment. It was a point that Mr Holmes had also made (and he had not been subjected to any detriment) and his and the Claimant’s views were documented at the meeting. We accept Mr Najjar’s evidence that he does not recall this point ever being raised by the Claimant with him. We accept Mr Holmes’ evidence that this issue was not raised again by him or the Claimant after the 24 May 2022 Risk Committee Meeting and that whilst meeting the test for a protected disclosure it really just reflected the Claimant and Mr Holmes doing their job and did not attract the attention of Mr Najjar or others. It was something to be looked into and assessed as part of R2’s risk and compliance processes. 24 May 2022 – Mr Webb’s call with R2’s External Counsel[121]On 24 May 2022 Mr Webb had a call with R2’s External Counsel and made a note for himself as to the points he wanted to discuss which included [1460]: 35 of 82 In your assessment what did you make of our recommendation to put forward his form A Training plan knowledge gaps Timeline Written evidence of this There is one other point I want to raise around integrity. Apparently Salam put in 2 Form A applications at the same time; my understanding was that he wasn't sure one of the roles would come to fruition, s he hedged his bets and applied for both. He disclosed this right from the outset The FCA contacted him to understand what he was doing, he explained, no further action was taken by the FCA He then started talking to equity, took the job and pulled the 2 Form A's Our compliance officer has taken issue with this and says it's an integrity issue, and ultimately he is refusing to sign the form A[122]On 25 May 2022 R2’s External Counsel sent an email to Mr Webb, Mr Najjar and Mr Holmes with his feedback on the Claimant following their meeting on 20 May 2022 [PB183-184] in which he said: All, I write in relation to our discussion yesterday and following the interview/proprietary exercise that I carried out with Salam Alaswad ('Salam') on Friday. The purpose of that exercise was for me to provide you with input as to whether Salam has any gaps with respect to becoming a senior manager and carrying on the Chief Executive role for you (which you are required to understand in relation to learning and development needs etc). We had a detailed discussion as to my thoughts on Tuesday morning (yesterday) and the following is a high level overview. Key points 1. I consider that Salam Alaswad has the relevant expertise to be a CEO in the sector. 2. This was evidenced by his experience and the way in which he talks about the business and other operators in this sector. 3. It is clear that he understands the FCA's macro expectations and the 36 of 82 key regulatory requirements with respect to the role. Gaps identified 4. The above stated, I do not consider that FCA would, on interview, necessarily consider that Salam can appropriately evidence some of FCA's key (micro) expectations in an articulate manner. This is not to say that Salam does not know the answers, but he would benefit from some preparation with respect to how these are conveyed to the FCA. In particular, these would relate to: a) detailing relevant "conduct" risks relevant to the business; and b) speaking the "senior manager" language such as in relation to "reasonable steps" and how he will "discharge" his duties; and c) being up to speed with financial crime risk (which is a hot topic for the FCA currently). 5. I had two separate points: a) Work might be undertaken with Salam in order that he can better evidence how he would "challenge" the Board and the group of Equiti in general. I mention this because the FCA often comment that they have reservations as to persons ability to demonstrate this; and b) There were some "honest" answers that were given that might be better rephrased in order to put across Equiti's position in a more favourable light (such as with respect to withdrawing its variation of permission and the current "use" of the "retail" permissions). I believe that all of the above is achievable with requisite training and teach-ins and interview prep (acknowledging that being interviewed by the FCA is materially different to being interviewed for a senior management position by a company).[123]We accept R2’s External Counsel’s evidence [R2ECWS16] that given the Claimant was R2’s prospective CEO, he thought it was possible that the Claimant might at some stage see his advice and that he took that into account when writing the email above.[124]We also accept R2’s External Counsel’s evidence that his email reflected the fact that he:124.1 Thought the Claimant had the requisite knowledge to be CEO of Equiti UK;124.2 had reservations about whether he would get through an FCA interview at this stage, without material prep.[125]R2’s External Counsel’s evidence was that his email conveyed a level of seriousness of those concerns and that his email provided a strong message to R2 about those concerns. We agree with him that he phrased the email politely. 37 of 82 We find that the recipients of the email were disappointed with the news from R2’s External Counsel and, contrary to what the Claimant had said to Mr Najjar in his message of 21 May 2022, the meeting with R2’s External Counsel could not have been said to have gone well in the context of the recruitment of someone who they had thought had significant expertise as regards FCA requirements to perform the CEO role. We find that R2’s External Counsel, because his client had chosen the Claimant as their prospective CEO, wanted to portray a ‘we can nonetheless do this’ message. It was a delicate situation for R2’s External Counsel who had to make sure he complied with his duties to advise his client accurately on where he thought the land lay and also manage a client relationship with R2 and the Claimant. PD4 - 1 June 2022[126]The Claimant says that he raised PD4 on 1 June 2022 in an email to Lynette Lambert and the UK Head of Compliance in that he says he informed them of a potential breach of financial promotion rules arising from the circulation of a company profile for R2.[127]The Claimant’s emails of that date say: 11:54am Lynette, Good morning, Quick question; who signoff the copy of this electronic catalog from a legal/regulatory perspective? 12:09pm Hi Lynette, Can you name the persona who approves the content, please? I need to speak to him/her. 12:27 Hi Lynette, Who is the person responsible to approve the content for/from Equiti Capital UK Limited from a legal/regulatory perspective? 9:51 [Dubai time] Lynette, thanks! [UK Head of Compliance], Good morning, 38 of 82 Are you happy for the catalog provided today to be used by Equiti Capital UK Limited? 2:26pm Lynette, As to the below response, no one from the UK has approved the content, is there anyone else you think has signed off this catalog? 16:30 Please don't worry about the basis of my views, I just need to know who approve the content (from legal point of view) from Equiti UK or on behalf of Equiti UK. [UK Head of Compliance] confirmed he did not approve it for Equiti UK, do you know anyone else? This is all about making sure that Equiti UK are not in breach of the financial promotions rules.[128]It was the UK Head of Compliance who spelled out the issue in an email on 1 June 2022 at 10:32 (to the Claimant and to Ms Lambert) saying: Hi Both As discussed, the document is and should only ever be presented as an Equiti Group Ltd document. It therefore must not be used alongside or in conjunction with Equiti Capital's own marketing or promotional material (as it does not contain necessary disclaimers and information that would be required if being published/presented by Equiti Capital), and so should solely be used by non-UK employees when presenting information about the Equiti Group of companies, if a UK employee wishes to pass this on to another party then we'll need to create an associated disclaimer that can be provided with it that will identify that it is not and not endorsed as an Equiti UK document, it is not an inducement or offer to provide or intended to solicit that third party to engage in financial services with Equiti Group and is not directed at retail clients.[129]We accept the Respondents’ submission that the Claimant’s emails were in response to Ms Lambert sending, by email to all global staff, a link to an updated 39 of 82 Equiti Group Corporate Profile. All the Claimant then did was ask the question as to who had ‘signed off’ the documents from a legal/regulatory perspective in the UK. The Claimant clearly had in mind the issue of potential breach of financial promotion rules (as mentioned in his email of 16:30) but it was the UK Head of Compliance who then comprehensively spelled out the issue in his email prior to that. The Claimant himself disclosed no relevant information, whether tending to show breach of a legal obligation or otherwise and he did not make a protected disclosure. He was acting in the typical manner of a manager, with someone more junior (Ms Lambert and the UK Head of Compliance) doing the actual work. His actions were to ensure that R2 did not unwittingly breach a rule through use of the materials that Ms Lambert had circulated. Board approval to submit Form A to the FCA 1 June 2022 – 13 June 2022[130]On 1 June 2022 Mr Holmes sent an email request to Mr Webb, Ms Chouhan, Mr Najjar and Ms Abeygoonaratne asking for UK Board approval to submit the Claimant’s Form A to the FCA [PB193]. The email acknowledged that as part of the continuing on-boarding process, it would be beneficial in preparation for him assuming the CEO role for the Claimant to have some external professional support training in areas and in readiness for an interview with the FCA.[131]On 13 June 2022 R2’s board did approve submission of the Form A. This is important because, as the Claimant submitted, it suggests that what happened between 13 June 2022 and 22 June 2022 (when it was agreed that the decision to terminate the Claimant’s employment was taken) is important to the reasons for the termination of the Claimant's employment. [INWS57 and 1698]. PD5 - 6 June 2022 video meeting with Chantelle[132]We find that on 6 June 2022 the Claimant was working from home and had a video meeting with Ms Johnson (Group Chief Marketing Officer) who, like the Claimant, was based in the UK. Ms Johnson did not give evidence at the hearing.[133]We find that the purpose of the call was to discuss Ms Johnson’s reporting line and specifically her remit within and outside the UK. We do not think it is probable that the Claimant went into the detail he said he did in his witness statement [CWS68-72] but we consider that he did make the point that he thought that, in line with the FCA’s requirements and R2’s strategy to have a clear reporting line to their direct employer, R2 should introduce firm lines in the company organisation chart, rather than dotted lines, in order to emphasize the accountability in the UK and the importance of local oversight. This was not something that the Claimant was raising entirely independently. It was a topic that had already been raised by Ms Dehal with Mr Holmes, Ms Abeygooneratne and the UK Head of Compliance at a UK nomination and Remuneration Group Meeting on 14 March 2022 [1242]. It was later mentioned as a topic in a Strategy Paper [1199] Mr Holmes had prepared. That strategy paper included the following “[…] It is worth noting that the FCA requires Equiti Capital to ensure it has a clear organisational structure and reporting lines, all employees should be clear on who they report to locally, even where they may have dotted/sub reporting lines into individuals at Group level, failure to do so can result in individuals at Group level being brought within scope of the FCA's oversight.[…]”.[134]We find that the Claimant did disclose information to the Respondent that there 40 of 82 was a breach of FCA requirements in respect of reporting lines. In common with our findings on PD3, we find that a disclosure of a breach of the FCA rules would be in the public interest because of the public interest in financial institutions being properly managed in accordance with FCA requirements. We find that the Claimant had a reasonable belief that this disclosure was in the pubic interest. We also conclude that the Claimant had a reasonable belief that his disclosure tended to show that the Respondent was not complying with a legal obligation.[135]The Claimant alleged that he raised this same issue with Mr Najjar in a meeting they had on 7 June 2022 (which we address in more detail below). We accept Mr Najjar’s evidence that he told the Claimant that Ms Johnson did report to him, but that there was a functional reporting line between Ms Johnson and Mr Najjar, as some of the work she did was at a Group level. We accept that Mr Najjar explained that the Group had adopted a functional matrix organisation since its inception and the Group was not looking to make changes to that. We accept Mr Najjar’s evidence that the Claimant told Mr Najjar that he thought this was inappropriate and Mr Najjar went on to explain to the Claimant that:135.1 The structure had previously been validated and checked; but135.2 if he had concerns he should speak to Mr Myers (who was the former Equiti UK CEO) to discuss this further.[136]We find that the Claimant did not then go on to raise this issue with Mr Myers in their meeting on 9 June 2022 [CWS83-86]. PD6-8 - 7 June 2022 video call with Mr Najjar[137]The Claimant and Mr Najjar had a video call on 7 June 2022 and there is significant dispute as to what was discussed on the call. Mr Najjar could not specifically recall the meeting or what was discussed whereas the Claimant, despite there being no contemporaneous documents directly recording the topics of conversation, suggested that he had detailed recollection of the various topics discussed.[138]The Claimant said he raised the topics that are alleged to have been PDs 1-5 together with a further two topics which are classed as PD 7 and PD 8. PD7 is closely related to PD3 and PD5. PD8 is the first time that the Claimant alleges that he raised a concern about the Respondent’s Transfer Pricing arrangements but also blends in an element related to PD3, PD5 and PD7. Claimant’s Handwritten Discussion Points[139]Because it is one of the only relatively contemporaneous documents we note here that on 22 June 2022 the Claimant made a brief hand written note of points he wanted to discuss with R2’s External Counsel at their meeting that day. Because it is one of the few documents available to us from this time we set out the wording of the note here in full and we refer to it as the “Handwritten Discussion Points” [1688/1689]: 22 June 2022 [R2’s External Counsel] @ pm - PFOF 41 of 82 - Transfer Pricing/Tax - Minimum threshold conditions/ the mind and the management - Regulated activities done by overseas - Outsourcing agreements/SLA - Systems & Controls / overseas Control - No UK MI - Policies and procedures - No speak up culture PD6 - Did the Claimant raise PD1 and PD2 with Mr Najjar on 7 June 2022?[140]The Claimant, in his witness statement [CWS74], did not say that he went any further in his call with Mr Najjar on 7 June 2022 than what he alleges with respect to PD1 and PD2.[141]We find that the topics raised as PD1 and PD2 were not raised with Mr Najjar in their meeting. They were dealt with at the time the Claimant first raised them (when he commented on whether wording in the financial statements should be adjusted). We do not think it is probable that the Claimant would have then raised them with R1. In any event, and as we have explained, we did not find that they amounted to protected disclosures at PD1 or PD2 so consequently, the Claimant not having asserted that he said any more on 7 June 2022 to Mr Najjar, they could not therefore, if they had been said to Mr Najjar, have amounted to protected disclosures in the 7 June 2022 meeting.[142]We have taken into account that the Claimant did then develop PD2 in to the PFOF issue which is the subject of PD10 (alleged to have been made to Mr Fulton on 10 June 2022) and PD13 alleged to have been made to R2’s External Counsel on 22 June 2022. He also references PFOF in his note of 22 June 2022 [1688] bulleting the matters he wanted to discuss with R2’s External Counsel. PD6 and PD7 - Did the Claimant raise PD3, PD5 and PD7 with Mr Najjar on 7 June 2022?[143]As we say above, PD3, PD5 and PD7 are closely related:143.1PD3 was that the Claimant thought that R2 was in breach of FCA requirements because there was no UK specific risk incident reporting and because the Claimant said he was concerned that R2 did not have sufficiently robust systems and controls at UK level (in contrast to Group level).143.2PD7 was alleged to be a disclosure to Mr Najjar that R2 was too concerned with the Group’s systems and controls as a whole and not concerned enough with those within R2 itself. 42 of 82143.3PD5 was also related to PD3 and PD7 because the Claimant said that he gave as an example the fact that the marketing team reported to Group entities instead of to R2 and PD5 was his allegation that Ms Johnson should report to him [CWS76a].[144]For the reasons we have explained above, we have found that PD3 and PD5 did constitute protected disclosures.[145]Mr Najjar did recall the Claimant raising the topics said to constitute PD5, PD7 and PD3 (but with respect to PD3 not in so far as it related to separation of UK MI from Group MI).[146]We find that the Claimant did disclose information on these matters to Mr Najjar at their meeting on 7 June 2022:146.1 The Handwritten Discussion Points [1688] evidence that less than two weeks later these matters remained on the Claimant’s mind. PD3 is referred to in that document as “No UK MI” and “Systems & Controls / overseas Control” and this latter reference is also to the topic of PD7. PD5 is closely related to this (being the specific example related to Ms Johnson as being someone in the UK who reported to Group entities rather than R2).146.2 Mr Najjar does recall [INWS70 and 70.2] discussing Ms Johnson’s role with Mr Alaswad during his employment and on the balance of probabilities we consider it was at this meeting (PD5). We accept that Mr Najjar did explain to the Claimant that Ms Johnson did report to him, but that there was a functional reporting line between Ms Johnson and Mr Najjar, as some of the work she did was at a Group level.[147]We find that the Claimant did raise matters that were in the public interest (for the reasons set out in respect of PD3) and that he had a reasonable belief that the disclosures were made in the public interest. We also consider that they tended to show that a legal obligation was likely to be breach and that he had a reasonable belief that this was the case. Evidence on the Group’s organisational structures[148]We accept that at the 7 June 2022 meeting Mr Najjar explained to the Claimant that the Group had operated as a functional matrix organisation since its inception and they were not looking to make changes to that. There was a good deal of cross examination of Mr Najjar on this in which it was put to Mr Najjar that his evidence was inconsistent on this point. However, there is a difference between saying “we are not looking to make changes to that” (the operating model) and “we are not going to change that”. The latter of course ‘shuts down’ the discussion. We do not consider that Mr Najjar was in fact being inconsistent in his evidence and accept that he did not shut down the discussion by saying ‘we are not going to change that’.[149]We also accept Mr Najjar’s evidence that he asked the Claimant to speak to Mr Myers on these topics (Mr Myers having previously been the CEO and the person who had agreed to the organisational structure that was in place). We accept Mr Najjar’s evidence that he suggested that the Claimant speak to Mr Myers so that 43 of 82 the Claimant could understand Mr Myers perspective of why it had been decided that it was under the FCA's mandate to structure the organisation in this way.[150]We accept Mr Najjar’s evidence that he and R2 were looking for a CEO to challenge them and ensure that they were within the FCA requirements. We further accept his evidence [INWS75] that he considered that the Group had a strong governance structure within the organisation and had brought PricewaterhouseCoopers (PwC) in to advise on an appropriate governance framework in mid-2021 which they had since embedded within the organisation.[151]We accept Mr Najjar’s evidence that, notwithstanding that, everything was adaptable and everything was open to change so long as it was supported with the right evidence. Mr Najjar was not the right person to have that debate with and that is why he referred the Claimant to Mr Myers (who was better placed to understand the Claimant’s perspective, explain why the Group was organised as it was and then determine if there was a good basis for making changes and what those changes might be).[152]The Claimant’s evidence was that he asked Mr Najjar if he could share with him the work previously done by PwC on the structure of R2’s corporate governance but that Mr Najjar said that “there wasn’t much there” and that the Claimant “shouldn’t worry about it”. The Claimant’s evidence was that said he wanted to see it nonetheless but it was not supplied to him. We do not accept the Claimant’s evidence on this. It does not seem probable that Mr Najjar would have withheld the report from the Claimant and we accept his evidence that, in any event, the report was on the Group’s intranet. Had the Claimant been denied a document that he really wanted to see we consider that he would have sent an email requesting it to Mr Najjar, Mr Myers or perhaps others. PD 6 - Did the Claimant raise PD4 with Mr Najjar on 7 June 2022?[153]We find that it is not probable that the Claimant raised the topic of PD4 with Mr Najjar on 7 June 2022. This was a matter that was not outstanding and it had been dealt with principally by the UK Head of Compliance. PD4 was also not subsequently recorded on the Claimant’s Handwritten Discussion Points document in any way that was apparent to us. Did the Claimant raise PD8 with Mr Najjar on 7 June 2022?[154]This is the first time that the Claimant says he raised the Transfer Pricing issue with the Respondents as a protected disclosure. This was clearly on the Claimant’s Handwritten Discussion Points which he prepared a little over two weeks later on 22 June 2022. Transfer Pricing is principally a tax issue but in his witness statement the Claimant also mixed in an element of the oversight issues that he references in PD3, 5 and 7 when he said [CWS76b] (emphasis added) “The fact that certain costs for the Group were covered by R2, in breach of HMRC rules. I gave the example of individuals working within both the IT and Marketing teams in the UK (on the UK payroll) but doing almost all of their work for overseas entities (i.e, being outside R2’s oversight) and explained that this was a serious regulatory issue. I mentioned the fact that this also appeared to be a potential illegal tax avoidance scheme (“the Transfer Pricing Issue”).” 44 of 82[155]We accept the Respondent’s position that Transfer Pricing is not per se unlawful – it is used by most multinational companies. It only becomes potentially unlawful when transactions are not priced at arms length.[156]The Claimant relied on the following example of this Transfer Pricing issue which he alleges he raised with Mr Najjar [CWS77-78]:77. Transfer Pricing in R2’s business was, in my reasonable belief, an illegal tax avoidance/evasion scheme because it artificially manipulated profit to reduce tax liability, which is also a breach of FCA Principles 1, 2 and 8.78. One good example is the IT costs for R2 in 2019 and 2020, which were approximately US$7 million and US$8.6 million respectively (p.1429) but which reduced to approximately US$4.5 million in 2021 EoY financials, and US$ 4 million in 2022 EoY financials. However, R2 does not hold any technology assets or have IT personnel that could account or justify any of these staggering figures. This was a point which had also been recognised by Paul Webb in an Audit & Risk Committee meeting on 12 April 2022, which both R1 and I had attended (p.1232), when he had questioned technology costs in the region of US$9 million and specifically queried both the accuracy of these, and their allocation to the UK (i.e. R2) (p.1235). I believe that Mr Webb and I had discussed this issue prior to the 12 April 2022 meeting but cannot recall the details.[157]Mr Najjar’s evidence [INWS71.1] was that the Claimant had raised with him R2’s approach to Transfer Pricing but did not ever say that there were tax-avoidance or regulatory issues in relation to Group functions being performed out of the UK. Mr Najjar’s position was more that the Claimant enquired about how R2 dealt with Transfer Pricing and he therefore directed the Claimant to speak with Mr Fulton as CFO who understood the topic better and the approach of the Group, Mr Najjar being aware that a lot of work had been done on it.[158]Mr Najjar referred to the fact that the minutes of R2’s Executive Committee meeting on 15 June 2022 referenced ‘transfer of pricing risk’ and notes that Ms Chouhan should check and coordinate further with the Claimant on this point. This of course is the subject of alleged PD12 which we address below.[159]We accept the Claimant’s evidence that Transfer Pricing had been raised by Mr Webb at the 12 April 2022 Audit and Risk Committee Meeting and the notes record (emphasis added) [1235]: 2.2 Draft annual accounts — review/approve/ recommend to Board […] PW specifically raised the $9 million technology costs, querying both accuracy and allocation of this to the UK. Committee agreed that this was a good point to bring out at Board. ACTION POINT 104 for SC to collate the highest contributors to technology spend for the Board.[160]We find that on 7 June 2022 the Claimant did raise the issues with Mr Najjar about how Transfer Pricing was managed within R2. However, we find that, on the balance of probabilities, the Claimant did not raise a concern or present information to Mr Najjar that tended to show that R2, through its Transfer Pricing 45 of 82 arrangements, was failing or was likely to fail to comply with its legal obligations. We consider that at this stage, on this issue, and as reflected in the minutes the Claimant and R2 (specifically Mr Webb) were trying to establish the accuracy and allocation of this to the UK. We therefore find that the Claimant did not raise PD8. PD9 - 9 June 2022 Claimant video meeting with Brian Myers (essentially PD3 and PD7 combined)[161]As we make clear above, we find that the Claimant did not raise the topic of PD5 (specific reporting line of Ms Johnson) with Mr Myers in their meeting on 9 June 2022 and the Claimant does not make clear that he did in his witness statement [CWS83-86].[162]We find that the Claimant contacted Mr Myers to arrange the video meeting that they had on 9 June 2022. There would have been no particular reason for Mr Myers to have contacted the Claimant to organise a meeting on that date (given that they had not spoken since 14 February 2022).[163]We accept Mr Najjar’s evidence that he contacted Mr Myers prior to Mr Myers’ call with the Claimant to let Mr Myers know to expect some contact from the Claimant and what the Claimant wanted to discuss with him (Mr Myers could not specifically remember this).[164]Mr Myers accepted that he could not recall any of the detail of his meeting with the Claimant on 09/06/22 but nevertheless said that he was confident that the Claimant did not raise with him that R2s board was too concerned about group systems and controls and insufficiently concerned with its own systems and controls [BMWS11]. Mr Myers did not advance any evidence on what he says actually was discussed at the meeting.[165]Taking into account what had been discussed with Mr Najjar two days earlier and the content of the Handwritten Discussion Points, we accept the Claimant’s evidence that at this meeting he raised with Mr Myers information regarding the Claimant’s view of:165.1 the inadequacy of the systems and controls at R2 (i.e. PD3 and PD7).165.2 there being no Management Information (MI) reports available exclusively for R2 (and the issues this created in his view);165.3 a corresponding breach of legal and regulatory obligations, including Principle 3 of the FCA’s Principles for Businesses.[166]On the balance of probabilities we do not consider that Mr Myers fully agreed with the Claimant regarding these concerns. We consider that he more likely suggested that, if having considered it more fully there was an issue to be addressed, then options for dealing with it might be enhancing the Service Level Agreements between R2 and other members of the Group and improving “paperwork”. We consider that on the balance of probabilities Mr Myers also told the Claimant that his view was that the Group currently had sufficient resources overseas to prevent an issue arising and without improper reliance on the resources of R2 in such things as IT and Marketing. We accept the Claimant’s 46 of 82 evidence that, on the balance of probabilities it was at this meeting that Mr Myers discussed a similar scenario which he had previously encountered during his tenure as CEO at GKFX, involving mismanagement and a breach of several of the FCA’s Principles for Businesses and how he had handled it with the FCA.[167]As such we consider that the Claimant did disclose information to Mr Myers at this meeting which tended to show that R2 was likely to fail to comply with a legal obligation and that he held this belief on reasonable grounds and that he had a reasonable belief that the disclosure was made in the public interest (for the same reasons as explained in respect of PD3). However, we consider that the Claimant was raising it as a concern, at the same time as trying establish for himself how much of a concern it might be as incumbent CEO and whether he might need to press for changes when appointed as CEO. He was also thinking ahead to how he might talk about these issues if he were interviewed by the FCA. We accept the Claimant’s submission (para 108) that the Claimant is a calm, understated, courteous and professional person. We do not consider that he would have raised this issue (or any others) in forceful way that is likely to have ‘ruffled feathers’. These were matters of course that had been raised at an ExCo meeting on 18 May 2022 [1448] and at the Risk Committee meeting on 26 May 22 [1507] and on both occasions Mr Holmes had agreed with the Claimant. PD10 and PD11 Video meeting on 10 June 2022 between Claimant and Mr Fulton[168]PD10 is alleged to have been made to Mr Fulton (the Group CFO) in a video call on 10 June 2022. It is said to have amounted to a repetition of PD2 but it is clear to us that by 10 June 2022 the Claimant had developed his thinking on the issue to question whether there had been illegal PFOF.[169]PD11 is alleged to have been made in the same call and is said to have been a repetition of PD8 (relating to Transfer Pricing).[170]Mr Fulton accepts that it was the Claimant who arranged this meeting [RFWS8]. We also accept the Claimant’s submission that, on the balance of probabilities, Mr Najjar told Mr Fulton that the Claimant might contact Mr Fulton (Mr Najjar accepts he had done with Mr Myers prior to Mr Myers’ call with the Claimant).[171]Mr Fulton recalled discussing(i) transfer pricing and(ii) Bloom Capital with the Claimant at this meeting. We do not accept Mr Fulton’s evidence that the Claimant was not raising any “concerns” with him in this meeting. We also do not accept Mr Fulton’s recollection that, as regards the Bloom Capital issue, the Claimant did not mention PFOF at all. We consider that the Claimant did refer to PFOF and accept many of the Claimant’s submissions in this regard:171.1 At a board meeting on 26 June 2022 R2’s board had been presented with a paper in which a significant increase in R2’s Q2 revenues was explained as having been “due to H1 profit share with Bloom” [1263]. Mr Fulton’s explanation for this was that this paper was likely drafted by Ms Chouhan, R2’s CFO, who apparently made the “continual error” of calling the arrangement with Bloom a “profit share”.171.2 Mr Fulton and Mr Webb both accepted that the Claimant was right to be concerned by the description in this paper. 47 of 82171.3 Neither Mr Fulton nor Mr Webb was able to explain why the EOY 2021 Financial Statements described that R2 had received $6M from Bloom in respect of trading activities. Mr Fulton conceded that he himself would not have used the term “trading activities” to discuss the nature of the payments received by R2 from Bloom Capital.171.4 There would have been no reason for Mr Fulton to emphasise to the Claimant that R2 was “appropriately” compensated for services provided to Bloom, that the services were “formally documented under a Service Level Agreement” and that the payment from Bloom to R2 was for “risk management services received” unless the concerns that the Claimant was raising called for such an explanation [RFWS8].171.5 Indeed, there would have been no reason for Mr Fulton to have been talking about Bloom at all, unless the Claimant had raised his concerns about PFOF in relation to Bloom.171.6 Around the time of the meeting with Mr Fulton there had been focus by the European Securities and Markets Authority (“ESMA”) on PFOF, not least because of the highly publicised “Gamestop” case [1059]-[1062].171.7 At almost exactly the same time as their 10/06/22 meeting, the UK Head of Compliance is contemporaneously recorded as having been examining R2’s SLA with Bloom Capital in order to “ensure that these accurately reflect the activity that Bloom is, and is able to conduct under its regulatory standing” [PB213].171.8 The UK Head of Compliance in an email copied to R2’s CFO (Ms S Chouhan) observed that [PB213]: “please correct me if I am wrong, Bloom is not providing liquidity to the UK, they are purely the UK’s client and is carrying out their own proprietary trading, which happens to be the inverse of the UK’s client B-book. Therefore, references in the Services section should not mention “client” as Bloom does not have clients and therefore requires the UK to provide them with outsourced service […] as in fact the UK should be doing this itself as the clients are its own. Additionally, we will need to consider whether UK staff managing the proprietary trading activities of Bloom for whom the UK is also the counterparty, raises conflicts of interest in UK and whether these can be managed acceptably. I cannot see any remuneration provisions in this agreement, however we should be careful to ensure that this reflects remuneration for the actual services being provided per the above, and if there is an element of remuneration to the UK based on profit generated by Bloom from its proprietary trading activity, that there is no mention of routing client orders to Bloom, as this would put the UK in the frame of PFOF as we would be charging both sides of an execution”[172]We consider that the Claimant did refer to concerns about Transfer Pricing and again accept many of the Claimant’s submissions in this regard: 48 of 82172.1 There would also have been no reason for Mr Fulton to be at pains to “explain the exact steps we go through in relation to transfer pricing issue and inform him that this was something that the finance department was aware of and continued to prioritise” [RFWS11].172.2 This topic was noted 12 days later in the Claimant’s Handwritten Discussion Points as “Transfer pricing/tax” and the notes of the Claimant’s meeting with R2’s External Counsel make clear that the Claimant discussed Transfer Pricing (and PFOF) with R2’s External Counsel. The notes include a reference to his making clear that he had discussed them with the “head of finance in Dubai” (i.e. Mr Fulton) [PB239].[173]As such we accept the Claimant’s evidence that he disclosed sufficient information at this meeting tending to show that the R2 was failing or was likely to fail to comply with a legal obligation and that the Claimant held that belief on reasonable grounds. We also consider that he had a reasonable belief, for the reasons explained in respect of PD3, that he made the disclosure in the public interest. As such we consider that PD10 and 11 did constitute protected disclosures.[174]We accept Mr Fulton’s belief that R2’s arrangement with Bloom did not constitute PFOF. We also do not consider it is probable, as alleged by the Claimant, that Mr Fulton said that the way to rectify the Transfer Pricing Issue was to approach HMRC directly and confirm that following an internal audit the issue had been discovered and R2 would like to rectify it. We were persuaded by the evidence that Mr Fulton gave under cross examination on this point [Transcript p35 line2 - p37 line 6].[175]We find that both Transfer Pricing and PFOF are issues that organisations such as R2 have to actively monitor and assess. We accept R2’s External Counsel’s evidence that PFOF in particular is a very complex area. We do not consider on the evidence that the discussion with Mr Fulton was out of the ordinary or caused any dispute or particular concern on the part of Mr Fulton. The Claimant accepted that Mr Fulton was relaxed rather than nervous or defensive at the meeting [Transcript 1 March p86 lines 9-25].[176]We accept the Claimant’s evidence that Mr Fulton also suggested that the Claimant speak with Mr L Conway (Deputy Group CFO at that time) if the Claimant wanted to discuss any finance issues or if he had any other concerns. We accept the Claimant’s evidence that, on 13 June 2022, he had a brief chat with Mr Conway inside Mr Conway’s office about his discussions with Mr Fulton on 10 June 2022 and his concerns regarding Transfer Pricing and PFOF matters. We note that Mr Conway subsequently became R2’s CEO. We also accept the Respondents’ submissions that it is notable that Mr Fulton and the Claimant agree that Mr Fulton pointed him to Mr Conway for further information on any financial issues and yet the Claimant stated expressly in cross-examination that although he knew Mr Conway well and ‘went for a pint with him’, he never mentioned tax fraud [Transcript /1 March/p85-86/line 18-line 8]. 13 June 2022 Mr Holmes confirms R2 board approval to submit Claimant’s Form A to the FCA and related correspondence[177]On 13 June 2022, Mr Holmes, at 09:51 sent an email to Mr Webb and the UK 49 of 82 Head of Compliance confirming that R2’s UK board had approved the submission of the Claimant’s Form A to the FCA. He therefore asked for the process to be completed. This prompted the following reply from the UK Head of Compliance at 13:54 the same day [1552]: From: the UK Head of Compliance to Mr Holmes and Mr Webb at 13:54 Subject: RE: FORM A Hi Both Please see attached the draft application form. Given my position on the matter, and therefore considering I am conflicted, can the Board provide wording for a response to the following 2 questions (highlighted in the form): - Please provide full details of why the candidate is competent and capable to carry out the controlled function(s) applied for - Description or documentation setting out how the competency was assessed (demonstrating competence and suitability mapped to the specific role and responsibilities of the role) I am also attaching the additional documents being submitted for your review and approval: - Candidate Org Chart - mifid-article-4-information-form - S Alaswad - Collective Suitability Assessment — filled with the self-assessment answers given by Salam - mifid-changes-management-body-form - S Alaswad — this will need to be signed by either of you (I'm suggesting Paul given Nigel's identified as a leaver) and then attached to the application - Statement of Responsibility As above, and as indicated at the declaration page of the form @Paul Webb, once the application is complete it will need to be attested to and signed by yourself, then Compliance can just make the actual submission. Thanks [UK Head of Compliance][178]On 13 June 2022, Ms Ilbak asked Ms Abeygoonaratne via MS Teams whether R2 had already submitted the Claimant’s FCA Application [1613] and immediately relayed the answer to Mr Najjar [1616]. 50 of 82 Mr Najjar suggests the Claimant travel to Dubai[179]Also on 13 June 2022 Mr Najjar exchanged the following messages with the Claimant [1674]: [13/06/2022, 18:16:0-] Iskandar Najjar: i would like you to come to dubai office [13/06/2022, 18:16:09] Iskandar Najjar: would you be able to visit next week? [13/06/2022, 18:16:25] Iskandar Najjar: could give you sometime to sit with the other departments [13/06/2022, 18:17:20] Salam Al Aswad: Would mind leave once am full authorised by the FCA? [13/06/2022, 18:18:07] Salam Al Aswad: But if you think it’s required then I don’t mind [13/06/2022, 18:18:201 Iskandar Najjar: yes- i would prefer sooner rather than later [13/06/2022, 18:18:33] Iskandar Najjar: authorisation could take up to 8 weeks [13/06/2022, 18:19:13] Salam Al Aswad: Sure no problem, what time would you prefer? [13/06/2022, 18:19:3-] Iskandar Najjar: let me check with mohamed and make sure he is also around [13/06/2022, 18:19:461 Salem Al Aswad: Ok sure [21/06/2022, 17:09:461 Salam Al Aswad: Ia€T"m with Thirdway on Teams[180]We consider that it was surprising that the Claimant did not present himself as more enthusiastic to take this opportunity to go to Dubai, meet with senior leaders in the business (to better understand the business and build his relationships with them). Ultimately the ball was left in Mr Najjar’s court but the Claimant could have pressed for it, Mr Najjar having raised the opportunity.[181]We consider that the suggestion that the Claimant go to Dubai and the questions from Ms Ilbak about whether the Claimant’s Form A had been submitted already were reflective of the ongoing question marks that Mr Najjar had over the appointment of the Claimant. Criticisms of the Claimant and the Claimant leaves his personal laptop on bus a [1614-1615]:[182]Also on 13 June 2022 the Claimant left his personal laptop on a bus in the morning but was able to retrieve it by taking a taxi to the end of the bus route. This came to Ms Abeygoonaratne’s attention and she spoke that day with Mr 51 of 82 Najjar. Whilst a human mistake, we accept the Respondents’ evidence that the Claimant came across as flustered by this and it further undermined the Claimant’s standing in the eyes of Mr Najjar. We accept Mr Holmes evidence [NHWS51] that for him there were two key issues which demonstrated to him that the Claimant was probably not the right person for the CEO role:182.1 Firstly the Claimant had not integrating himself in the office in circumstances where he should have started to be the bridge between employees and the Executive Committee.182.2 When the Claimant came in flustered having left his laptop on the bus. Mr Holmes acknowledged that it sounded minor, but he did not feel it was in keeping with how a CEO should conduct themselves.[183]We consider that the Respondents’ evidence was overly critical of the Claimant in some respects:183.1 It was asserted that the Claimant was always in his own office and not speaking with other people [MIWS18] (when he was meant to be a cultural ambassador). In fact the Claimant, after about a month or so, moved into the open plan office. However, we accept that there was this perception of him.183.2 The Claimant was criticised for not speaking at the Town Hall meetings. The Claimant was fair to point out that he had not been asked to speak at a Town Hall meeting.183.3 It was asserted that the Claimant did not participate in Friday gatherings when in fact it appears that the gatherings were held on a Wednesday (Thursdays and Fridays typically being days when more junior staff members worked from home).183.4 It was asserted that he created a poor impression by walking around without his shoes on [MIWS18]. It transpired in the hearing that there was a health reason why the Claimant removed his shoes and he said he did so at his desk and did not walk around without shoes on and was, in contrast to others, always wearing a suit.183.5 It was asserted that the Claimant repeatedly suggested that R2 go back into the Retail Market when this was not part of its strategy. There is no direct contemporaneous evidence that the Claimant was pressing for this change of strategy and, given how big a change it would have been, we do not consider that it was what the Claimant was advocating (albeit we note that Mr Haider in a WhatsApp message more than two months earlier to Mr Najjar commented “Salam has some great new ideas, they are almost a bit crazy, but they are worth hearing. Should we get him in from of the StrategyCo?” [632]). At this time there was discussion within R2 about its Retail Permission and the risk of losing it if it did no use it. The Strategy Paper [1300] prepared by Mr Holmes commented on this point. We consider that comments by the Claimant were on the balance of probabilities more likely being confused with this internal debate and then 52 of 82 misquoted back to Mr Najjar and others who were based in Dubai and who were therefore somewhat dislocated from London.[184]However, whilst we consider that the Respondents witnesses were overly critical of the Claimant, there was some legitimate basis for criticism of the Claimant’s leadership skills (he could for example have sought out an opportunity to speak at a Town Hall meeting). We accept the Respondents’ evidence that a negative perception was building around the Claimant and, even if it was exaggerated and perhaps unfair in some respects, it was nonetheless there. For example, we accept Mr Holmes evidence at paragraphs 23 and 24 and Mr Najjar’s evidence as follows [INWS24]: “I conducted a town hall in London in which I presented him as the future CEO of the UK business. I remember Mr Alaswad simply sat in his seat and did not interact with others in the way I expected a future CEO to. When I come to the London office, I look to shake hands with everyone, speak to everyone, I know everyone in the office by name. This was not the approach Mr Alaswad was taking. I observed him to be distant and hierarchical which is not what we wanted for the UK CEO.” PD12 - 15 June 2022 – Claimant attends R2 ExCo Meeting (relates to PD8 and PD11)[185]The Claimant alleges that at an R2 Executive Committee meeting on 15 June 2022 he informed the Committee of the Transfer Pricing issue as his PD12. The relevant section of the ExCo meeting notes state [1666 -1667]: Executive Board meeting 15 June 2022 “9 Risk Updates PW informed the EXCO that recruitment for the 2 additional members of the risk team, following the departure of the CRO, was ongoing. He added that Risk committee in Dubai was being set up and risk register (KRIs) developed which will line up Dubai with the rest of the Equiti entities in terms of risk. The new risk register software proposal would be presented to ARC in July meeting. NH added that Larisa Husanu would be invited for future EXCO meetings to present risk matters following the departure of Saul Knapp. SA enquired whether "'Transfer of pricing risk" was included in the Risk register. New Action item 34: SC to brief SA and any follow up matter to be brought to EXCO.”[186]We accept on the balance of probabilities that the Claimant did raise the Transfer Pricing issue at this meeting and that he did not just raise it as a matter to be noted in R2’s risk register. On the balance of probabilities we find that the Claimant exemplified his concerns in terms similar to those expressed in his witness statement at paragraph 76b by referring to breach of HMRC rules and individuals 53 of 82 working within both the IT and Marketing teams in the UK (on the UK payroll) but doing almost all of their work for overseas entities (i.e, being outside R2’s oversight) and explained that this was a serious regulatory issue. We consider that here he also therefore mixed in the separate question of regulatory control. We also note the point emphasised by the Respondents that Transfer Pricing is not illegal unless there is a failure to price it at arms length. The Claimant did have a tendency to be somewhat imprecise in his language in this regard. For example, it is not that Transfer Pricing is per se “an illegal tax avoidance scheme”. Transfer Pricing just can give rise to illegal tax avoidance if not done properly and at arms length.[187]We accept the Claimant’s evidence that he disclosed sufficient information at this meeting tending to show that the R2 was failing or was likely to fail to comply with a legal obligation as regards the Transfer Pricing issue and that the Claimant held that belief on reasonable grounds. We also consider that he had a reasonable belief, for the reasons explained in respect of PD3, that he made the disclosure in the public interest. As such we consider that PD12 did constitute a protected disclosure.[188]The Claimant raising this matter at this meeting led to the following email correspondence [1693]: Ms S Chouhan to the Claimant cc Mr N Holmes on 22 June 2022 at 17:16 Subject: FW: Risk register Hi Salam, Hope you're well. Following from last Exco on transfer pricing risk, there used to be a separate risk on TP which is now included under the SLA breaches, please refer below and attached risk register. Please let me know if you think this should be shown separately and/or the probability and the impact for the existing risk updated. Happy to arrange a quick call if necessary. Regards, Sheetal. Claimant to Ms Chouhan cc Mr N Holmes 23 June 2022 at 12:17 Subject: RE: Risk register Hi Sheetal, May I suggest a short 15min meeting with you and Larisa to discuss this, please? Regards, Salam[189]Ms Chouhan then proposed a call with the Claimant to take place on 11 July 2022 for 30 mins [1691]. This was accepted by the Claimant [1697]. Ms Chouhan then on 23 June 2022 asked to postpone the call to 25 July 2022 [1692] and it did not in the event take place.[190]Ms Chouhan also emailed Ms L Husanu (Operational Risk Analyst) on 21 June 2022 requesting to see the latest risk register [1695]. Ms Husanu confirmed on 22 June 2022 that Transfer Pricing was not on R2’s risk register but had previously been. She observed that Transfer Pricing specifically would be a Category 4 risk and attached a risk definition which stated “Transfer Pricing Arrangements: The risk that outsourced functions are not priced at arm’s length and could give rise to 54 of 82 a tax inspection. Risk that engaging another group entity to provide back-office services adversely impacts the firm’s performance and risk management” [1694]. Mr Najjar’s WhatsApp messages of 15 June 2022 during the ExCo meeting with Mr Isbeer[191]The fact that we find that PD12 was made as a protected disclosure at the ExCo meeting on 15 June 2022 is particularly important because, during that meeting, there was a WhatsApp exchange between Mr Najjar and Mr Isbeer as follows [1635]: Najjar to Isbeer: i think salam is a bad idea Najjar to Isbeer: every time he talks i am cringing- i dont knw what he is going to say Isbeer to Najjar: man if u r that uncomfortble khalas Najjar to Isbeer: I feel it's too late Isbeer to Najjar: its not too late if u want to man. i suggest u bring him to dubai for a week. let him have chats with everyone. moe, Brian, rick etc etc have a collective feedback from exco if all agree he is not the right guy. then khalas[192]“Khalas” is an Arabic word meaning “finished” or in this context “call it a day” as the Claimant explained in his witness statement. The Claimant’s position was that Mr Najjar’s attitude towards him after their 7 June 2022 meeting was in stark contrast to his attitude before that date and made reference to a number of messages sent by Mr Najjar before that date which we have taken into account.[193]We also note here that on 17 June 2022 Mr Webb sent an email to Mr Najjar (Subject: Suggestion) as follows [1656]: Potential way forward with Salam is to get him to prepare a blue print of his first 90 days in the role• What is he going to change, is there anything new, anything he will stop• New hires, roles we don't need, reporting line changes, committee structures• Outsourcing?• What are his asks of the Group• Expenditure items, savings 55 of 82 Get him to complete that by the end of next week for your review, and potentially get Brian/Myself have a read for feedback. If this is way off piste then lets call it a day If that goes ok, then I think we tell Nigel to take a back seat for July, and see what happens Also, have a conversation with Nigel and see if he were to have 3 months off from August 1st, would he potentially come back if we needed him. Also, if by the end of July we decide that Salam isn't going to work, would Nigel remain as CEO, but on a 3 month sabbatical. I think this would be ok with the FCA and allow us to keep Nigel as CEO (I will sign up for his responsibilities for his sabbatical). Maybe he would do 4 days a week, if he came back for 3-6 months while we find someone, maybe he would do the job for 4 days a week?[194]On the balance of probabilities we accept Mr Najjar’s evidence [INWS55-56] that over the course of June it became clearer to him that the Claimant was not the calibre of person that he had thought they were recruiting for the CEO role. We accept that he had received feedback from others, including the Group Head of Trading, Mr Haider and Mr Fulton that the Claimant lacked the skills and experience required for the job. We accept that Mr Haider criticised the way in which the Claimant was leading the UK office move (the main piece of work that Mr Alaswad was doing while waiting for FCA authorisation). The assessments of Effecta and R2’s External Counsel had not provided the hoped for resounding endorsement of Mr Najjar’s choice of the Claimant for CEO. We accept also that:194.1 Mr Najjar’s own experience of the Claimant had started to cause him concerns about the practical value that the Claimant would bring.194.2 the fact that the UK Head of Compliance did not have confidence in the Claimant was of legitimate concern to Mr Najjar.[195]On the balance of probabilities we accept that Mr Najjar’s comments to Mr Haider in his WhatsApp message during the ExCo meeting were not reflective of a concern on the part of Mr Najjar about what the Claimant was saying about the Transfer Pricing issue and we accept the Respondents’ submission (notwithstanding that we have found that the Claimant did make a protected disclosure at the meeting) that it did not set any alarm bells ringing or particularly stand out at the meeting – Transfer Pricing was just one of a number of risks being managed and looked at by R2 in common with other businesses. We accept that Mr Najjar’s comment in his WhatsApp message was on the Claimant’s ability to do the CEO role including his ability to communicate and lead effectively. We accept the Respondents’ evidence and submission that the CEO role would have been a very significant step up for the Claimant based on his previous experience and the size of the organisations he had previously been involved in.[196]On 21 June 2022 there was a Group ExCo meeting [1686-1687]. The document we were provided with in respect of this meeting is short and heavily redacted but it shows the following: 56 of 82 Action Point: Item: 3. HR Updates Notes: UK CEO - Exco to look into this while in London Action Points: left blank. Attendance:• All Members• Invitees - Roxane and Gaurang 22 June 2022 Group ExCo meeting – decision not to appoint as CEO[197]There was a Group ExCo meeting on 22 June 2022 and those required at the meeting included Mr Najjar; Mr Fulton, Mr Webb, Mr Haider, Mr Myers [1680]. It is common ground between the parties that it was at this meeting that the decision not to appoint the Claimant as CEO of R2 was taken albeit the decision was not communicated to the Claimant until 27 June 2022 and was only ratified by the UK Board of R2 on 4 July 2022. We consider that it was ultimately Mr Najjar’s decision. We accept the Respondents’ submission that at this meeting the attendees would not have thought of the Claimant as a whistleblower (notwithstanding that we have found that the Claimant had made protected disclosures by this time). On the balance of probabilities we do not find that the protected disclosures raised by the Claimant had caused ripples at R2 or with Mr Najjar.[198]We accept Mr Najjar’s evidence [INWS57] that because Mr Myers and Mr Fulton were scheduled to be in the London office in the following weeks and, despite the decision that the Claimant was not the right fit for the role, Mr Myers and Mr Fulton were asked to meet with the Claimant to both confirm the decision not to appoint him as CEO and to consider whether there was any way he could remain employed by R2. We do not consider that this was any sort of attempt to cover up or mask a decision taken on the grounds of or influenced by the fact that the Claimant had raised protected disclosures. We consider that there was a genuine will to see if there was another role that the Claimant could perform for R2. We accept that Mr Najjar was genuinely hopeful that they may be able to find another role for the Claimant within the Group. We accept that he recognised and respected that the Claimant had spent a long time in the industry and was conscious that the Claimant was a friend of Mr Isbeer. We accept that Mr Najjar hoped to find a solution which both enabled the Group to find a role more suited to the Claimant and prevented the termination of his employment in its entirety. We accept Mr Fulton’s evidence that the Group has a friendly culture and is not quick to terminate employment relationships – it seeks to find other roles within the business that may suit a person’s skillset [RFWS15].[199]The next day Mr Najjar messaged Mr Ketmawi to confirm the decision he had taken at the ExCo meeting. 22 June 2022 Claimant meeting R2’s External Counsel (PD13, PD14 & PD16) - PB238-243][200]On the same day as the ExCo meeting, 22 June 2022, the Claimant had a meeting with R2’s External Counsel. As we refer to above, prior to this meeting the Claimant had prepared his Handwritten Discussion Points document [1688]. The intention was for this to be a mock interview and advising the Claimant on the FCA interview process. 57 of 82[201]R2’s External Counsel exchanged the following emails with the Claimant in the two days before the meeting [PB216-217]: From the Claimant to R2’s External Counsel 20 June 22 10:54 am Subject: RE: SMF1 - Equiti Capital [R2’s External Counsel], good morning, Shall I prepare anything or have anything in hand ahead of our virtual meeting Wednesday this week? R2’s External Counsel to the Claimant 20 June 2022 17:27 Subject: RE: SMF1 - Equiti Capital not at all. I think we will concentrate on the following: 1. Governance and SMCRa. What is your role and how does it fit into SMCR?b. What SMCR responsibilities do you have?c. How do you think about the "reasonable steps" expectations under SMCR? 2. Business model a. Explanation of revenue model. b. Detail as to intra-group exposures (and hedging model). c. Detail as to outsourcing.d. What are the key risks to the business? 3. Conduct risk a. What are the key conduct risks to the business? b. Note - they may relate to the following (i.e. not acting appropriately in these areas - because of the remuneration model which disincentivises calling out client risks): i. Financial crime (STORs/SARs) ii. Marketing / target market / opt- up 4. Key regulations - being able to sensibly talk to: a. CASS b. MAR c. Consumer Duty d. IFPR Does this make sense? Are you happy with this? 58 of 82 [R2’s External Counsel] From: the Claimant to R2’s External Counsel 21 June 2022 08:41 Subject: RE: SMF1 - Equiti Capital [R2’s External Counsel], I think that's a very sensible approach, my main thing is the business model, I need your views on what to say, how to say it, etc. to avoid leaving a confusing opinion.[202]It is at this meeting that the Claimant alleges that he raised PD13, PD, 14 and PD16 and that R2’s External Counsel subjected the Claimant to a detriment for which the Claimant says R2 is liable.[203]We have a short hand note of the meeting prepared by a trainee solicitor of R2’s External Counsel’s firm of solicitors. We accept that note, understandably, is not complete. Taking into account the note and the surrounding context of the meeting we concluded that the Claimant did raise PD13 (related to the PFOF issue) and that he did so in a way that amounted to the disclosure of information that tended to show that R2 had failed or was likely to fail to comply with a legal obligation, that he a reasonable belief in that and that, for the reasons explained in respect of PD3 the disclosure was made in the public interest and the Claimant had a reasonable belief in that. We reach this conclusion in particular because of the way in which R2’s External Counsel himself appears to have responded to what the Claimant said, based on the notes.[204]However, based on the evidence before us we do not consider that the Claimant said enough to raise PD14 (related to lack of oversight of people on R2’s payroll) or PD16 (Transfer Pricing).[205]R2’s External Counsel had no basis for concluding on what the Claimant said in this meeting that R2 had in fact failed to comply with a legal obligation. In particular, as regards PFOF, we accept R2’s External Counsel’s evidence that it is far too complicated an area for him to have reached any sort of conclusion. There was a mismatch in the expectations of the meeting. We consider that the Claimant went to the meeting hoping to both get valuable practice and guidance on how to perform in an interview with the FCA and also to get legal advice on the PFOF, Transfer Pricing and organisational control issues to sense check his thinking with R2’s External Counsel with two aims in mind:205.1 be guided on how to address those issues in an FCA interview; and205.2 to help him assess whether these were serious matters that he would need to be concerned with and take action on when he became CEO. We note [CWS109] that the Claimant told R2’s External Counsel that he considered these to be serious matters which would need to be addressed in any event, regardless of who was the CEO, and they needed to be addressed before any FCA interview [PB239]. 59 of 82[206]However, there was not enough time to go into the sort of detail that would be required to achieve the Claimant’s aims and R2’s External Counsel’s expectation was that he was there to help the Claimant present himself in an FCA interview.[207]For practical reasons related to the Rule 50 Order we address the alleged detriment (Det 1) that the Claimant says he was subjected to by R2’s Legal Counsel here (rather than with the other detriments and automatic unfair dismissal allegation below). The notes of the meeting record the comment which is the subject of Det 1 as [PB239]: “payment for flow in OTC market where you set the price. More a share of risk management/ Not cash equities - if it was, maybe and issue. Can you go into the interview if you aren't agreed as to positions and whether appropriate. Position as CEO untenable anyway.” We accept R2’s External Counsel’s explanation that he was surprised by the fact that the Claimant did not appear to fully understand the Group’s business model or know how to deal with issues which affect global businesses and that he therefore commented that if the Claimant was not able to demonstrate to the FCA his understanding of, belief in and support for Equiti’s business model / business then he could not realistically be its CEO (or, as the notes say, made his “Position as CEO untenable anyway”). We accept that the comment was more of a point of sentiment and that he was of the opinion that, unless this changed materially, the FCA would have doubts as to whether the Claimant really wanted the role or to work for Equiti within the confines of its global operating structure. We do not consider that R2’s External Counsel subjected the Claimant to a detriment as alleged. R2’s External Counsel was not insulting the Claimant or saying that he was not fit to be a CEO. The purpose of the mock interview was to test the Claimant’s ability to take on the CEO role and his ability to perform well in an FCA regulated role and FCA interview. If we are wrong and R2’s External Counsel did subject the Claimant to a detriment as alleged then we do not find that he did so on the grounds of the Claimant’s alleged protected disclosures (or more particularly PD 13 which we have found did in fact amount to a protected disclosure). R2’s External Counsel knew the Claimant from previous work together and we consider that he felt that he could speak frankly to him and that it was appropriate for him to do so.[208]We accept R2’s External Counsel’s evidence that in the event he was not able to conduct a mock interview (starting from basic questions and working their way through more detailed questions) because the rest of the meeting became more of a discussion as to certain questions he thought the FCA would ask and considerations about how the Claimant might best answer them.[209]R2’s External Counsel did not then share any feedback from the meeting with R2 or R1 because, before he had the opportunity to do so, he learnt that R2 had decided not to proceed with the the Claimant’s appointment to CEO. Therefore this meeting and the Claimant’s performance in it cannot have influenced the subsequent decisions of R1 and R2.[210]For completeness we accept the Claimant’s submission that throughout the period of R2’s External Counsel’s relevant involvement he viewed R2 as his client and he was acting on their behalf in conducting the interviews with the Claimant. We accept that he was acting as R2’s agent within the meaning of 60 of 82 Section 47B(1A)(b) and that consequently, R2 would have been liable for the alleged detriment under Section 47B(1B) (had it been a detriment to which he had subjected the Claimant on the grounds of a protected disclosure). We accept that in this case it is immaterial that the detriment would have been by R2’s External Counsel without the knowledge of approval of R2 (Section 47B(1C)).[211]We also accept the Claimant’s submission that the Respondents’ attempt to rely on Section 43B(4) ERA in this regard is misconceived. We accept that that provision provides that: “A disclosure of information in respect of which a claim to legal professional privilege (or, in Scotland, to confidentiality as between client and professional legal adviser) could be maintained in legal proceedings is not a qualifying disclosure if it is made by a person to whom the information had been disclosed in the course of obtaining legal advice”.[212]We accept that none of the information disclosed by the Claimant to R2’s External Counsel on 22 June 2022 had been disclosed to the Claimant in the course of obtaining legal advice. It was information which the Claimant acquired in the ordinary course of his employment, which was then disclosed by the Claimant to R2’s External Counsel (not the other way around).[213]We accept the Claimant’s submission that the Respondents’ construction of Section 43B(4) requires it to be interpreted back to front and that properly construed, the provision would prevent R2’s External Counsel making his own protected disclosure based on the information disclosed to him by the Claimant on 22 June 2022. We accept that Section 43B(4) is not relevant to the facts of this case.[214]We accept the Claimant’s submission that by contrast, as is clear from Section 43D, a qualified disclosure made by a worker to a legal adviser in the course of obtaining legal advice will be protected and that this is what the Claimant did (at least as regards PD13) to R2’s External Counsel on 22 June 2022. We accept that the Respondents’ construction of Section 43B(4) would render Section 43D otiose. Email correspondence between the Claimant and Ms Chouhan re the Transfer Pricing question[215]As we reference above, on 22 June 2022 Ms Chouhan and the Claimant exchanged emails on the Transfer Pricing question and were due to meet but ultimately that meeting did not happen.[216]On 23 June 2022 Mr Webb sent an email to Mr Najjar to say that the Claimant was pushing to conclude sending Form A to the FCA and asked(i) how Mr Najjar wanted to proceed and(ii) whether he should brief Mr Holmes. [1690][217]The same day, Mr Najjar sent a WhatsApp message to Mr Ketmawi saying “yesterday on our talk at exccom, we collectively decided that salam not the right fit so need to speak to him next week and tell him” [1698-1699]. 61 of 82 27 June 2022 - Mr Najjar tells the Claimant that not progressing him as CEO[218]On 27 June 2022 Mr Najjar had a video meeting with the Claimant to tell him that the decision had been made that he would not be appointed CEO [1700].[219]We accept Mr Najjar’s evidence [INWS62-64] as follows as regards what he said to the Claimant at the meeting:219.1 The Claimant would not be the next UK CEO within the business. We accept that Mr Najjar did not tell the Claimant directly that Mr Najjar thought the Claimant lacked regulatory knowledge and leadership skills and we accept that he did not say this to the Claimant because of a sense of professional courtesy, respect and because of cultural norms (the Claimant being Mr Najjar’s elder). We accept that with the benefit of hindsight Mr Najjar regrets not being more direct with the Claimant in explaining his reasons.219.2 He recognised that the Claimant had experience on the commercial side and had set up brokers and that there may be other parts of the business where they could involve him.219.3 That he was sincere in this hope and suggested that the Claimant come to Dubai to meet the wider Group leadership team and explore other opportunities (this suggested trip did not materialise).219.4 He did not give the Claimant an ultimatum to search for alternative roles (Det 3) and was trying to be soft in the manner in which he communicated the message to the Claimant but told the Claimant that an in-principle decision had been reached at Group ExCo.[220]We also accept Mr Najjar’s evidence that:220.1 the Claimant himself asked to be considered for alternative roles;220.2 his impression of the Claimant’s reaction was consistent with that reported later by Ms Abeygooneratne (as we explain below);220.3 the Claimant responded to the news in a mature way and took it well.220.4 It was out of a sense of respect that R2 felt it appropriate to pay the Claimant an additional three months’ salary when his employment was terminated as a gesture of goodwill (and against Ms Ilbak’s advice) and R2 did not request a waiver from him in return for this payment.[221]We find that Mr Najjar found it a difficult message to give to the Claimant because it reflected badly on his own initial judgment of the Claimant’s suitability, because of the respect and cultural matters referred to above and because the Claimant was Mr Isbeer’s friend.[222]We accept the Claimant’s evidence that after his first call with Mr Najjar that day and after he had time to reflect on the news, he had a further video call with Mr Najjar later in the day and asked if he could be considered for what he saw as a vacant Chief Risk Officer (CRO) role. We do not accept that Mr Najjar was 62 of 82 dismissive in referring the Claimant to Mr Webb to discuss the CRO role but find that he did have his own reservations as to the Claimant’s skillset for the role. We find that it was natural for a discussion about that suggestion to be held with Mr Webb (Det 5). Ms Abeygoonaratne correspondence with Mr Najjar 27 June 2022[223]Between 27 June 2022 and 4 July 2022 Ms Abeygoonaratne and Mr Najjar exchanged the following WhatsApp messages [1725]: Rika: Can you please let me know once you speak to Salam please so I can make sure I am available to follow up with him? Thanks [27/06/2022, 14:46:42] Iskandar Najjar: Are you there? [27/06/2022, 14:56:12] Rika: a missed voice call [27/06/2022, 19:34:27] Rika: Spoke to Salam and he seems very relieved... He did mention the CPO position and said he would speak to Rick and Paul. Let’s see [27/06/2022, 19:35:181 Iskandar Najjar: I don’t know how well it fits [27/06/2022, 19:35:23] Iskandar Najjar: But did you feel relief? [27/06/2022, 19:36:24] Rika: Yes he seemed less stressed all of sudden and smiling. Probably knew he was not at the level. He said he understands if the company thinks he is not the right fit for the CEO position. [27/06/2022, 19:37:38] Iskandar Najjar: I felt he was quite mature with his response [27/06/2022, 19:38:27] Rika: Yes he reacted well 27 June 2022 – Claimant asks Mr Webb about the Chief Risk Officer (CRO) role[224]On the same day as his calls with Mr Najjar and Ms Abeygoonaratne the Claimant sent the following email to Mr Webb and Mr Holmes to enquire about the possibility of instead being R2’s Chief Risk Officer [1700]: Sent 14:41:44 Subject: CRO role Hi Paul, I learned from Iskandar today that Equiti UK is not willing to proceed further with my SMF1 application and indeed the CEO role, he offered me the opportunity to suggest another role that I see suitable for me. While I reconfirmed to him my confidence in delivering the outcome expected in a CEO role, I understand the company may have different views to mine. I suggested to Iskandar to consider me for the CRO role, which is also a role of my interest and I am confident that I can deliver the outcome expected for this role. 63 of 82 Iskandar suggests that I speak to you and Rick re the CRO role. I look forward to hearing from you[225]On 28 June 2022 Ms Ilbak emailed Mr Najjar to let him know that the Claimant had approached Mr Webb about the CRO role [1701]. We consider that this was a normal message keeping Mr Najjar up to date with matters. 28 June 2022 – meeting between Mr Webb and the Claimant in Starbucks re CRO[226]On 28 June 2022 the Claimant met with Mr Webb in person at a Starbucks and it is at this meeting that the Claimant alleges that he was subjected to detriments Det 6, Det 7, Det 8. The main purpose of the meeting was to discuss the CRO role. We accept Mr Webb’s evidence as follows:226.1 the CRO in London had recently resigned;226.2 R2 did not plan to replace him (in fact R2 at the date of the hearing of this claim had still not replaced him 2 years on).226.3 R2 was just looking for two more junior roles in risk (someone to look after operational risk and someone to look after market risk) [1666-1667].226.4 those more junior roles would have involved carrying out risk assessments and preparing frameworks and reports, i.e. they were genuinely more junior rules.226.5 There was not a Group Risk Officer role that was being recruited for.226.6 There was no role in risk for the Claimant to take, particularly for someone senior like the Claimant.226.7 He explained this to the Claimant.226.8 He suggested meeting the Claimant in Starbucks, rather than the office because he knew that telling the Claimant there was no Group Chief Risk Officer role was sensitive.226.9 He did not tell the Claimant that he should cease acting as CEO that day but said that if the Claimant did not want to come back to the office after their meeting then that was fine. We accept that Mr Webb was being sensitive to the situation.[227]We also accept Mr Fulton’s evidence [RFWS16] that he discussed the idea of the Claimant becoming Group Chief Risk Officer role with Mr Webb and that he too could not see the Claimant performing the role because it is very specific and needs a lot of wide-ranging, technical knowledge which, based on the Claimant’s CV, the Claimant did not have. The Claimant had never held a CRO role before. 64 of 82 29 June 2022 – draft circular re not nominating the Claimant as CEO[228]On 29 June 2022 Mr Holmes sent an email to Mr Webb as follows [1702]: Subject: Confidential UK Board Matter - Chief Executive Officer designate Paul this been drafted for circulation in due course (ie once matters have been closed with Salam). Sharing for thoughts. Tks Nigel For record & ref. previous communication, the UK Board is notified that the drafting of the FORM A submission has been halted due to a number of factors that has led the Executive Directors to conclude that it may not now be in the Company's best interests to pursue the approved objective of nominating S. Alaswad as the next Chief Executive Officer. Concerns around the individual's inter-personal leadership & communication skills as well cultural fit over the last 3 months have failed to reach the level expected and required, particularly absent over the last month; all of which are key competencies for the role. Accordingly, the appointment is revoked with a discussion at the forthcoming Board Meeting on the 12th July on the meeting agenda to review options as well over all Board composition. 7 July 2022 Mr Najjar and the Claimant - video call[229]On 7 July 2022 Mr Najjar had a further video call with the Claimant. The Claimant alleges that Mr Najjar explained that the Claimant would not be offered the CRO role without giving any reason why (Det 9). The Claimant further alleges that Mr Najjar also dismissively directed him to speak to Mr Myers and Mr Fulton to discuss where to go from there and then refused to join the subsequent meetings with those individuals when the Claimant requested him to do so (Det 10).[230]We accept Mr Najjar’s evidence that he did not say to the Claimant that he would not be considered for the CRO role because it was not a role that was within Mr Najjar’s remit to offer. We accept that is why he directed the Claimant to speak to Mr Webb and Mr Fulton who would have been the ultimate decision makers. Mr Najjar also directed the Claimant to speak to Mr Myers and Mr Fulton to ensure that the decision that had been made at the Group ExCo on 22 June 2022 was right for the business. At this meeting the Claimant remained eager to be given the chance to prove himself in the CEO role. Despite his reservations, even at this stage, Mr Najjar wanted to give him the opportunity to do so through further discussions with Mr Myers and Mr Fulton. 27 June – 26 July 2022 - WhatsApp messages between Mr Najjar and Mr Webb[231]We note here the WhatsApp messages exchanged between Mr Najjar and Mr Webb [910-911] between 27 June and 26 July 2022: [27/06/2022, 09:55:48] Paul Webb: Morning. I think Nigel is planning to 65 of 82 start handing things over to Salam this week, so I think we need to speak to Nigel asap and get him up to speed - it won’t look good if he moves out of his office and hands everything off to then have to unravel. [27/06/2022, 10:02:5-] Iskandar Najjar: Thank you for all your support - really transformed a big part of the business since you have joined [27/06/2022, 10:03:1-] Iskandar Najjar: I will reach out to nigel today and communicate our thoughts to him [27/06/2022, 19:13:071 Iskandar Najjar: Spoke to Nigel and Salam [27/06/2022, 19:13:181 Iskandar Najjar: Briefed them both about our decision and the logic behind it [27/06/2022, 19:13:4-] Iskandar Najjar: Have the ball in Salam court not to see if he sees a fit elsewhere in the organisation [27/06/2022, 19:13:54] Iskandar Najjar: Will have a follow up call with him tomorrow on the subject […] [12/07/2022, 18:30:37] Paul Webb: We are just responding to The first point he raised is about the selection of Salam as CEO. Brian tells me he is re interviewing Salam, and this could be back on the table. This impacts how we respond to the solicitor so we need to decide asap, and we will hold off replying to - on that point until clarified [12/07/2022, 18:41:34] Iskandar Najjar: Yes- but I think we are all the same opinion [12/07/2022, 18:41:39] Iskandar Najjar: On that subject […][232]This conversation reflects the fact that, notwithstanding that Mr Najjar had been persuaded by the Claimant to give him a further opportunity – which Mr Najjar implemented with the suggestion that he meet again with Mr Myers and Mr Fulton, it would have taken a good deal for Mr Najjar’s mind to have been changed about the Claimant taking the CEO position and it was a decision that was unlikely to be reversed. On the balance of probabilities it gave the Claimant false hope. 12 July 2022 Mr Myers and the Claimant meet for dinner[233]On 12 July 2022 Mr Myers met the Claimant for dinner [1731]. Mr Myers asked the Claimant to tell him more about his proposals for Equiti UK and what he hoped to achieve as CEO if they were to consider reversing the decision not to appoint him and also explained the focus he saw the CEO role having [BMWS15-16]. R2 was going through a cultural transition period with a focus on how to re-implement a culture of being invested in the people in the office and the culture that had been established across the Group. 66 of 82[234]We do not consider it probable that Mr Myers indicated to the Claimant that he expected the Equiti UK CEO to implement a ‘soft-touch’ culture in relation to compliance and regulation. There is in fact evidence that it was the Claimant who told Ms Ilbak around 5 May 2022 that he thought with respect to the FCA and its assessments, obligations and regulations [05/05/22 – 1750] “most of it seems to be BS and not necessary” and we accept Mr Najjar’s evidence that [INWS71.3] that the Claimant told him that he thought that Equiti UK was overgoverned and over-compliant and there were larger companies with fewer committees and board members. One of the things that brought the Claimant into contention for the CEO role was his apparent strengths in compliance and regulation.[235]We do not accept that it is probable that the Claimant put the emphasis that Mr Myers asserts that he did as regards R2 radically changing strategy by actively seeking to take on retail clients.[236]Mr Myers clearly was not however persuaded that the decision taken on 22 June 2022 had been wrong and remained of the view that the Claimant lacked an understanding of what his role and responsibilities as CEO of R2 would be. This is the message that Mr Myers then conveyed at a Group ExCo meeting the following day on 13 July 2022. 13 July 2022 message exchange between the Claimant and Mr Najjar[237]On 13 July 2022, after the dinner with Mr Myers, the Claimant and Mr Najjar exchanged the following messages [1733]: From the Claimant to Mr Najjar Hi Iskandar. hope you are doing welt Brian and I had good sensible discussions yesterday around the role of the UK CEO and the current situation in the UK office. I think we have now a mutual understanding of all major issues. I also confirmed to Brian my absolute confidence to deliver on the mandate but the mandate needs to be activated. Many thanks for suggesting this meeting, it was really useful. From Mr Najjar to the Claimant Hi Salam, Thank you for the feedback we are still in review process on this and havent come to a conclusion_ apologies but that was the last discussion we had. as i had agreed, i would set up a call with Rick for a follow up. we would then meet as an executive committee for input on it From Mr Najjar to the Claimant The decision as of now is still as we had it last week_ if you are not comfrotable with the process, please let me know- and i will inform them that you are passing on the position. From Mr Najjar to the Claimant i had explained my reservations on the call- however due to your 67 of 82 passion; i wanted to open it up to you again. From the Claimant to Mr Najjar I appreciate that, I just thought to give you some feedback, nothing else.[238]The Claimant’s impression of how the meeting had gone was different to that of Mr Myers. 22 July 2022 WhatsApp message exchange between Mr Fulton and Mr Myers[239]On 22 July 2022 Mr Fulton met with the Claimant [1932]. Mr Fulton did not recall the conversation but he exchanged the following messages on WhatsApp with Mr Myers that day [2183]: Fulton to Myers: Deed done Not very convincing on anything I asked him about what type of CEO he feels we need in the UK, what the priorities would be for the next six - 12 months, what is currently working and what isn't. He did mention that we need someone to ensure that all believe in Iskandar's vision for Equiti without being able to articulate how that could be done. No change in my view. Myers to Fulton: ditto Fulton to Myers: Had a call with Iskandar earlier and passed on the feedback. 28 July 2022 video call between the Claimant and Mr Najjar[240]On 28 July 2022 Mr Najjar had a video call with the Claimant during which it is alleged that Mr Najjar subjected him to further detriments [1734] being that [CWS159-160] Mr Najjar told him that R2 had decided to proceed with the termination of his employment (Det 11) without giving the Claimant any proper explanation or reasons for the decision to dismiss him and instead simply repeating that the CEO role required “different skills” (Det 12).[241]We accept that at the meeting the Claimant asked Mr Najjar if he could tell the Claimant against what job description Mr Najjar had assessed his performance (because the Claimant had never received the job description for his role).[242]At the meeting Mr Najjar told the Claimant that R2 was proceeding with the decision to terminate the Claimant’s employment with R2 and that his skill sets were not quite fitted for the requirements of the role, in terms of capacity of knowledge from an FCA perspective and cultural fit. Mr Najjar’s voicenote to Ms Ilbak on 28 July 2022[243]On 28 July 2022 Mr Najjar sent Ms Ilbak a voice note at 11:45 which was transcribed for us as follows [1734]: 68 of 82 Hi Marta, erm I spoke to Salam. I explained that his skill sets weren't quite fitted for the requirements of that role. It was either capacity of knowledge from an FCA perspective or the cultural fit as required for that role. He came and challenged the fact that he doesn't have the [JD]. I said "listen, you have a certain set of skills and there are a different set of skills that are required for this task in particular. Potentially we can work on projects together in the future that Equiti could fund if you come up with different opportunities, let's keep the dialogue open on that front but with this opportunity in particular the door is closed" and I said either yourself or Rika would get in touch with him with a package, maybe we can give him 3 months' notice and and er erm... just be very, very careful in terms of how you phrase it because like you said previously, even like from our experience previously, he could come back to us in terms of managing er...to try and squeeze us in some capacity or another. So erm er yeah the ball is in your court erm to kind of progress and sign that off. Thank you. 29 July 2022 email relating to PD4 - withdrawn PD 15 [1735-1747][244]We accept the Respondents’ submission (closing submissions para 81) in respect of PD15 which has now been withdrawn and which is contained in an email dated 27 July 2022, and in part relates back to PD4 [PB239/1735-1747]. 1 August 2022 call between Ms Ilbak, Ms Abeygoonaratne and the Claimant – dismissal and related messages – Det 13 withdrawn[245]On 1 August 2022 Ms Ilbak and Ms Abeygoonaratne held a meeting (via video call) with the Claimant to confirm that the Claimant’s employment would terminate on that day.[246]The Claimant withdrew his allegation of whistleblowing detriment (Det 13) that during the call:246.1 Ms Ilbak became very unhappy when he questioned the reason for his dismissal and against which job description R1 had assessed his suitability for the role.246.2 There was no explanation or reason given for the termination of his employment.[247]Ms Ilbak conducted the meeting with Ms Abeygoonaratne in attendance as a witness and whilst it was a short, formal conversation she was not rude.[248]During the meeting the Claimant again raised that he did not have a job description. Ms Ilbak was, reasonably, of the view that this would have been part of his FCA application and would have been discussed with him many times. Ms Ilbak replied saying that his job description had been discussed with him and that she was sure that he was very aware of the expectations of the role. Ms Ilbak considered that the Claimant was quite arrogant and provocative on the job description point but did not respond in an inappropriate tone. We consider that she was nonetheless irritated by the Claimant raising this point in the manner he did and he picked up on this. 69 of 82[249]Ms Ilbak confirmed to the Claimant that the reason he was being dismissed was due to his experience and skillset (language which she was careful to replicate in the termination letter).[250]Ms Ilbak did not consider that R2 should enhance the Claimant’s entitlement to notice by paying him three months’ salary at termination. She felt that this was not justified, but had to respect the decision.[251]On the same day the following emails were exchanged [1813-4]: From: Ms Ilbak to Mr Najjar at 07:59:04 I have a meeting with Salam in 2 h - we have the confirmation that it's safe to terminate with 2 weeks notice, (however his last working day will be today) and pay you in lieu of the full three-month notice period From Mr Holmes to Ms Abeygoonaratne at 13:09 Also he was involved in the drafting of the proposed media release at that time — so why on earth would someone consent to this without knowing what the job was. Also have noticed that it was the first thing he asked for when someone mentioned about the Group CRO role....so find it hard to believe he didn't ask for the JD before or when joining, also who on earth signs the Offer/Contract without understanding the role...unless of course desperate.. Best Nigel From Ms Abeygoonaratne to Mr Holmes at 12:17 Absolutely ! ![252]This correspondence between Mr Holmes and Ms Abeygoonaratne was of course in respect of a point that the Claimant had raised on his call with Ms Ilbak and Ms Abeygooneratne that day. Letter confirming dismissal received 2 August 2022 [1819][253]The Claimant was then sent the following employment termination letter: August 1st 2022 Dear Salam Notification of dismissal with immediate effect This letter is to notify you that Equiti Capital UK Limited (the "Company") is terminating your employment. The reason the Company is terminating your employment is that your role as CEO was subject to approval from 70 of 82 the Financial Conduct Authority ("FCA"). As per your conversation with Iskandar Najjar on 28th July 2022, the Company does not consider that you have the requisite skill set and experience to carry out the role successfully and therefore will not be putting you forward for FCA approval. In accordance with clause 5 of your contract of employment, you are entitled to receive one week's notice of termination during your probationary period. In accordance with clause 15.2 of your contract of employment, the Company has the right, and opts, to pay you in lieu of your notice period. However, as a gesture of goodwill the Company is prepared to increase your notice period to three months which you will receive in a lump sum as a payment in lieu of your notice ("PILON"). Your contract of employment terminates with immediate effect and your last day of employment is today, 1 August 2022. The PILON will be paid direct into your bank or building society account by 31St of August 2022, subject to normal deductions of tax and National Insurance contributions. Your holiday entitlement for this year, calculated pro rata up to the end of your employment, is 8 days. You have taken 1 day of your holiday entitlement So you have 7 days of outstanding holiday entitlement, for which you shall receive payment in lieu directly into your bank or building society account by 31St August 2022 subject to normal deductions of tax and National Insurance contributions. If you have not already done so, you must return any property belonging to the Company still in your possession to Rajesh Vaghela by August 5th 2022. If you have any personal effects and belongings currently on the Company's premises, please let me know and the Company will arrange to return these to you. Please note that you remain bound by clauses 18 (Obligations upon termination), 21 (Confidentiality) and 22 (Intellectual Property) of your contract of employment. You also remain bound by the post-termination restrictions set out in Schedule 3 of your contract of employment until 1 August 2023. I note that you have raised concerns about not having received a job description for your role. The Company is not legally obliged to provide you with a job description. Your contract of employment confirmed your job title as required under the Employment Rights Act 1996.[254]It seems that the Claimant did not receive this letter until the next day (2 August 2022) because the following emails were then exchanged (however the Claimant was told in unequivocal terms on 1 August 2022 that that day was the last day of his employment [1818]): 71 of 82 From the Claimant to Ms Abeygoonaratne on 2 August 2022 at 10:14 Rika, good morning, As I have no more access to my Equiti email, would you please use this email address to communicate with me? Also to confirm that I have received nothing from you since our Teams meeting yesterday morning. From Ms Abeygoonaratne to the Claimant at 09:18:35 Good morning Salam, This is very strange as I have sent the attached to your email address (personal email) and via docusign yesterday at 5.47pm. Please find in attachment copy of the letter, sending you a hard copy registered and by courrier today as well. The letter should be with you by 1.10pm today. Thank you Kind regards Rika Respondent’s assertion that the Claimant would have been dismissed in any event due this his use of personal email for business matters[255]The Respondent argued that the Claimant would have been dismissed in any event because of his use of personal email for business matters. We accept the Claimant’s submissions on this. There is no prospect that the Claimant would have been disciplined for his conduct in sending a few emails to his personal email address in the first few days of his employment. The Respondents did themselves no credit in advancing this argument and it undermined the credibility of their case more generally considering:255.1 On 25 March 22 the Claimant had expressly notified the Head of IT and Ms Abeygoonaratne (Head of HR) of his intention to use his personal laptop and had received no objection from them in that regard [532].255.2 Mr Holmes was aware that R2 had approved the Claimant’s access to his Equiti emails on his personal devices via portal.office.com on the first day of his employment [619].255.3 The UK Head of Compliance [721] and Mr Holmes [621] corresponded with the Claimant about Equiti business using the Claimant’s personal 72 of 82 email address after his Equiti email had been set up [619].255.4 On 08 April 2022 the Claimant corresponded with Ms Abeygoonarate about Equiti business using his personal email address without any objection from her [683].255.5 The UK Head of Compliance, Mr Webb (COO) and Mr Keshtari (Global Head of IT) all agreed in May 2022 that the Global IT Security Policy did not make explicitly clear that employees should not send Equiti data to their personal email addresses [1534-5].255.6 Several other employees were flagged as having sent Equiti data to their personal email addresses in the relevant period. None of them were subjected to any form of disciplinary action whatsoever, let alone dismissed [1454-6, 1246, 1467, 1469].255.7 It was routine for Equiti Group employees to correspond via WhatsApp on Equiti business, in ostensible breach of 4(iii)(b) of the Global IT Security Policy [551]. Indeed, Mr Holmes described this as “industry standard”. FURTHER FINDINGS OF FACT, ANALYSIS AND CONCLUSIONS[256]We rely on our findings of fact above but make the following further findings of fact and address the allegation of automatic unfair dismissal and whistleblowing detriments (other than Det 1 addressed above) as follows: Automatic Unfair Dismissal[257]The Claimant’s effective date of termination was 1 August 2022 when he was told verbally by Ms Ilbak that his employment would end with immediate effect.[258]The Claimant’s protected disclosure were not a reason or principal reason for the Claimant’s dismissal.[259]As the Respondents submitted:259.1 The Claimant’s prior experience was very different to what the CEO role at R2 required and would have marked a substantial step up for the Claimant;259.2 The Claimant was over confident in his abilities (we refer in particular to our finding on skills gap analysis response but also, for example, his presentation of how the meeting with R2’s External Counsel went on 22 June 2022 and how his meeting with Mr Myers went on 12 July 2022);259.3 two external consultants both made clear that there was more to do before the Claimant could be confident of getting through an FCA interview. Effecta, which said that the Claimant needed three months of training before he could be interviewed by the FCA and R2’s External Counsel who clearly thought the Claimant needed material training. 73 of 82259.4 R2’s UK Head of Compliance had strong reservations as to whether the Claimant had demonstrated the requisite regulatory expertise.259.5 As Mr Najjar very fairly accepted in cross-examination, there was not one big issue but rather an ongoing series of small questions that was affecting the ongoing reassessment of the Claimant as the prospective UK CEO.259.6 The succession of small questions, taken together, undermined the initial confidence in the Claimant’s abilities.259.7 One of the functions of a Form A is to force employers of employees subject to the SMCR to assess whether they have conducted complete and thorough due diligence on the candidate and are able to assert with confidence, and under threat of criminal liability, that the proposed SMF candidate has the requisite skills and competence.259.8 It was a serious (and unusual) matter that the UK Head of Compliance was not willing to sign off on the Form A for a CEO or even prepare wording for the form. The areas in which he was unwilling to provide wording were also important [1552].259.9 It does not matter whether the UK Head of Compliance was right or not.259.10 The Respondents’ witnesses identified slightly different aspects that caused them and others to have serious concerns which we agree was a strength of the Respondents’ evidence rather than a weakness (pointing away from a coordinated single corporate view). Their ability to remember events and conversations clearly from 2022 was also largely as we would have expected in circumstances where neither the Claimant nor the Respondents’ witnesses had committed much to writing (in whatever form) at the time.259.11 We accept that none of the Respondents’ witnesses remember anything dramatic happening or the Clamant showing or alleging in clear terms that R2 had clearly done something seriously wrong (being another reason why witnesses did not have notes of meetings);259.12 Where the Claimant asked questions in writing or during minuted meetings they were dealt with in a matter of fact and business as usual fashion and it is surprising that the Claimant did not correct meeting notes if he thought they were seriously inaccurate or raised allegations of serious wrongdoing in writing.259.13 For two of the alleged protected disclosures Mr Webb (allocation of IT costs) and Mr Holmes (R2 risks not separated and too focused on the Group) championed the same points and suffered no detriment.259.14 Ms Husanu and Ms Chouhan had already identified the need for the risk register to include transfer pricing arrangements and the risk that outsourced functions are not priced at arm’s length and could give rise to a tax inspection [1694] and were intending to discuss this with the Claimant. 74 of 82259.15 The UK Head of Compliance was looking at the PFOF risk.259.16 It is a common feature of whistleblowing claims that the alleged reason for dismissal or detriment is the respondent’s sensitivity to the revelation of the contents of the protected disclosure to a wider audience (or a regulatory body) or the sense that dramatic and unwanted changes would be necessary to comply with the relevant legal obligations. Given the actions of Mr Webb, Mr Holmes and the UK Head of Compliance in relation to the same and other matters, that case was not put seriously to any of the witnesses in cross-examination.259.17 Those interviewing the Claimant for the role had to comment on the Claimant’s apparent ability to challenge decisions effectively [459, 489, 502, 512]. Mr Webb, Mr Holmes, the UK Head of Compliance demonstrated that they were able to challenge matters in writing or in minutes without concern as to the consequences and when the Claimant challenged aspects in writing it is recorded together with positive views as to those challenges [1401], [2126, cf. 1197].259.18 R2 did want a new CEO who was not merely willing to challenge R2 to improve it but was keen for the highest standards of regulatory conduct and was keen that not just the CEO but all employees were able to challenge it to improve in this regard. There was no evidence of the comment in the Claimant’s Handwritten Discussion Points of the final point that the Claimant listed (and little if any focus on it at the hearing) namely: “No speak up culture”[260]Once the Respondents had decided the Claimant was not right for CEO role on 22 June 2022 they were still genuinely interested in what he might be able to do for them and to keep him in the company and no doubt felt uncomfortable about having taken him on only to tell him that he would not be their CEO – they thought he was a nice and affable person. They were also prepared to give the Claimant other chances, even after 22 June 2022, to persuade them that they had made the wrong decision. This points away from the reason for not making him CEO or dismissing him being his protected disclosures.[261]We did not place much weight on Ms Abeygooneratne’s comment on 27 June 2022 that the Claimant seemed relieved about the news that he was not going to be taken forward at CEO but consider that her comment “Probably knew he was not at the level. He said he understands if the company thinks he is not the right fit for the CEO position.” was an accurate representation of the situation. The alleged detriments[262]In the context of the findings of fact set out above, we explain here our findings on the detriments to which the Claimant alleges that he was subjected on the grounds that he made his alleged protected disclosures.[263]When we use the statutory language “on the grounds of” we take into account the authority of Fecitt in which it was held that, in contrast to the test for automatic unfair dismissal, the requisite causal link is established in detriment 75 of 82 claims if the protected disclosure materially influences (in the sense of being more than a trivial influence) the employer's treatment of the whistleblower. 22 June 2022 -Detriment 1 - R2’s External Counsel[264]We have explained our finding on this above and do not repeat it here. 27 June 2022 - Detriments 2, 3, 4 and 5 – Mr Najjar[265]For the reasons we have explained, we conclude that Mr Najjar did not, on the grounds of any of the Claimant’s protected disclosures:265.1 Say to him that he was not suitable for the CEO role (Det 2). This would have been a detriment but it does not have the necessary causal link to the Claimant’s protected disclosures.265.2 Deliver an ultimatum to the Claimant by suggesting that the Claimant should search for alternative roles (Det 3). The Claimant was not subjected to this detriment, he was not given an ultimatum, it having been decided that he should not be appointed CEO this was an opportunity for the Claimant to remain in other employment with R2. If we are wrong and the Claimant was given an ultimatum that amounted to a detriment we do not consider that it was on the grounds of his protected disclosures. The Respondent’s genuinely wanted to give thought to whether there might be another role for the Claimant.265.3 Fail to give any reasoning for the alleged ultimatum (Det 4). Mr Najjar did give a reason (albeit he admitted he could have been more direct with the Claimant). The Claimant was not subjected to a detriment but if he was the reason for Mr Najjar not giving more detailed reasoning was not on the grounds of the Claimant’s protected disclosures (it was out of professional courtesy, respect, and cultural norms).265.4 Refer the Claimant to Mr Webb (Det 5). This was not a detriment, it was a reasonable suggestion that the Claimant speak to Mr Webb who was better able to assess whether the Claimant could do the CRO role (if indeed the Respondent decided to fill the role that it had planned to leave vacant). 28 June 2022 – Detriments 6, 7, and 8 – Mr Webb[266]We accept the Respondents’ submission that it is surprising that Detriments 6 & 8 are maintained in circumstances where 7 has been withdrawn (i.e. the allegation that Mr Webb said to the Claimant that the Claimant should cease acting as CEO that day).[267]For the reasons we have explained, we conclude that Mr Webb did not, on the grounds of any of the Claimant’s protected disclosures:267.1 Say to the Claimant that it would not be possible for the Claimant to take the role of CRO (Det 6). Whilst potentially a detriment, Mr Webb had good grounds for concluding that the Claimant did not have the expertise and experience for the role and in any event it was not a vacancy that R2 was looking to fill. 76 of 82267.2 saying to the Claimant that the Claimant should cease acting as CEO that day? (Det 7); and267.3 Fail to give the Claimant any proper explanation/reason for such treatment (Det 8). There was no such failure. 7 July 2022 – Detriments 9 and 10 – Mr Najjar[268]For the reasons we have explained, we conclude that Mr Najjar did not, on the grounds of any of the Claimant’s protected disclosures:268.1 Assert to him that it would not be possible for the Claimant to take the CRO role (Det 9). When Mr Najjar suggested that the Claimant speak to Mr Webb and Mr Fulton he was not aware that there was no CRO role available. In any event it was not a role that was within Mr Najjar’s remit to offer which is why he directed the Claimant to Mr Webb and Mr Fulton who would have been the ultimate decision makers.268.2 Refer the Claimant to Mr Myers and Mr Fulton (Det 10). This was not detrimental treatment and the reason for Mr Najjar referring the Claimant to them was because Mr Najjar wanted to sense check the decision he had taken on 22 June 2022. He also directed the Claimant to speak to Mr Fulton as he (with Mr Webb) would have been one of the ultimate decision makers in respect of the CRO role. 28 July 2022 onwards – Detriments 11 and 12 – Mr Najjar[269]For the reasons we have explained, we conclude that Mr Najjar did not, on the grounds of any of the Claimant’s protected disclosures:269.1 On 28 July 2022 say to the Claimant that that R2 had decided to proceed with termination of the Claimant’s employment (Det 11). This was a detriment but it was not on the alleged grounds and was for the reasons set out above in respect of the Claimant’s automatic unfair dismissal claim.269.2 Thereafter fail to explain any reasoning for such decision (Det 12). Mr Najjar did give his reasons for his decision and accepted that he could have been more direct with the Claimant but the reasons he did not give more detailed reasoning to the Claimant was not on the grounds of the Claimant’s protected disclosures (it was out of professional courtesy, respect, and cultural norms). Dismissal letter - Det 14[270]Detriment 13 was withdrawn.[271]We conclude that R2’s dismissal letter did not contain misleading reasoning for the Claimant’s dismissal. We do not find that a failure to provide fuller reasoning was on the grounds of any of the Claimant’s protected disclosures. Ms Ilbak understandably wanted to make sure that the wording of the letter was consistent with the reasons given to the Claimant verbally (which in substance remained consistent from 27 June 2022 onwards). 77 of 82