Mr D Fotheringhame v Barclays Services Ltd: 3200194/2017
EMPLOYMENT TRIBUNALS
Case No 3200194/2017
Between
Mr D FotheringhameClaimantBarclays Services LtdRespondent
Before
Employment Judge BrownIn person for claimantMr A Blake (instructed by Counsel) for respondentDate 24 January 2019
JUDGMENT
It is the judgment of the Employment Tribunal that:-[1]The Respondent dismissed the Claimant unfairly.[2]If the Respondent had acted fairly it would not have dismissed the Claimant.[3]The Claimant contributed to his dismissal in the order of 20%. It is appropriate to reduce the basic and compensatory awards by 20%.[4]The Remedy Hearing will proceed on 9 – 11 May 2018.
REASONS
Relevant law
[1]The Claimant brings a complaint of unfair dismissal against the Respondent, his former employer.
Issues
[2]The parties agreed the issues in the case. They were: 2.1. the reason for dismissal 2.2. if it is misconduct: 2.2.1. Did the decision-makers believe the Claimant was guilty of misconduct? 2.2.2. Was this belief based on reasonable grounds, in particular was there an adequate investigation and/or a fair procedure? 2.2.3. If the answers to the preceding questions is yes, did the decision to dismiss fall within the range of reasonable responses? 2.3. If the dismissal was in some way unfair: 2.3.1. Would the Claimant have been dismissed anyway for some other substantial reason? 2.3.2. Judged objectively by the Tribunal, was the Claimant’s conduct blameworthy such that it contributed to his dismissal? 2.3.3. What compensation, if any, is just and equitable?[3]It is the Claimant’s case that he was not dismissed for misconduct, but was sacrificed to appease the New York State Department for Financial Services (“DFS”). He maintains that the Respondent could not reasonably, and did not, believe that he was guilty of the misconduct alleged.[4]The Respondent contends that the decision makers, Mr Mahon and Mr Mbanefo (on appeal), reached a decision open to them on the evidence, following an adequate investigation and fair procedure. It denies therefore that the dismissal was unfair.[5]I heard evidence from the Claimant. I also heard evidence from: John Mahon, formerly Head of Corporate Banking at the Respondent and the dismissing officer; and Arthur Mbanefo, Head of Financial Resource Management at Barclays Capital Securities Inc. and the appeal officer. I read the witness statement of Paul Exall, Head of Reward and Performance for Barclays International and grievance officer.[6]The parties agreed that, at this hearing, which was listed to consider liability and issues of Polkey and contributory fault only, the Respondent would not rely on the argument that the Claimant would have been dismissed for some other substantial reason on the ground that the New York State Department for Financial Services (“DFS”) Consent Order prevented the Claimant from working in US dollar foreign exchange. The Respondent conceded that the procedure to consider an SOSR dismissal would have been likely to have taken longer than two and a half months, during which time the Claimant would have earned compensation to the statutory cap. That argument, if successful, would not reduce the Claimant’s compensatory award. The Respondent did not wish to call complex evidence at this stage on the effect of the Consent Order and its interplay with the regulatory regime in the UK. However, the Respondent said that, in the event that the Claimant pursued reinstatement or reengagement at a Remedy Hearing, the Respondent would call evidence in relation to the DFS Order, regulatory issues and Polkey.[7]At the start of the hearing, the Respondent conceded that Mr Mahon, the dismissing officer, had seen a spreadsheet linked to the Respondent’s Subpoena response to the Attorney General of New York, before Mr Mahon made his decision to dismiss. The Respondent apologised for having told Employment Judge Foxwell, at a Preliminary Hearing regarding specific disclosure, that Mr Mahon had not seen this document. The Claimant was unhappy that the Respondent had apparently misled the Tribunal over this matter. He said that, if Employment Judge Foxwell had not ordered that the document to be disclosed to the Claimant, the Respondent would never have made this concession.[8]The Claimant had obtained an opinion from a lawyer in New York on the legality of the DFS Order, particularly in relation to the Claimant’s rights. I read the relevant letter from the American lawyer. I considered that it was only tangentially relevant to the issues in this case. Findings of Fact Background and Context[9]I heard a great deal of evidence in this case and was referred to a very large number of documents. These findings of fact are the facts which I considered to be most relevant to the issues I had to decide.[10]The Claimant began working for the Respondent on 13 September 2010. At the time of the matters in issue in this case, he was employed as Head of Automated Flow Trading within the Respondent’s Electronic, Fixed Income, Currencies and Commodities Trading Business (“eFICC”). His Corporate Title was Managing Director. The position was very well paid; his gross pay was over £1 million in 2014.[11]The Claimant worked in the Respondent’s electronic Foreign Exchange (“FX”) trading group. His role had direct supervisory responsibility over London based traders in that team and had indirect supervisory responsibility over technology and quantitative research groups. The Claimant’s role thus included oversight of electronic currency trading.[12]Electronic trading is driven by algorithms and is conducted at lightning speed with electronic decisions made in milliseconds. The Bank (which includes a number of corporate bodies, not just the Respondent) is a Market Maker, which that means that it provides “buy” and “sell” quotes for prices at which it will buy and sell currency to a party (“the counterparty”). The counterparty can choose if and when to send an order to try to execute a trade at one of the Bank’s published prices. The speed of electronic trading is such that, if a counterparty has an algorithm which is fractionally faster than the Bank’s, then it will have a competitive advantage, enabling it to profit at the Bank’s expense. All the Bank’s FX customers are corporate clients, not private individuals.[13]The Bank’s clients can trade electronically using different “channels”. The Bank’s GUI channel is an application designed by the Bank which clients can install onto their computers, in order to execute trades with the Bank. The GUI channel is used by human beings, rather than computer programs. Clients can also trade through “ECNs” – Electronic Communication Networks. These are electronic brokers or third parties which sit between the client and the Bank. All quote and order messages pass through the ECN’s systems. The main ECNs are “Currenex” and “Integral.” Yet further clients trade through the “FIX” channel (or “API” channel). Clients, or ECNs, which use the FIX/API channel write their own computer programs to send the Bank orders for trades.[14]The Bank has technology known as “Last Look” or “LL”, which enables the Bank to pause a request for a trade from a counterparty for a moment, to determine whether the price requested is within the Bank’s trade tolerance. During the time pause, the Bank’s electronic systems check whether the market has moved beyond a particular price tolerance for the trade. The length of the pause can be adjusted electronically. The longer the pause, the more information and thinking time the Bank’s algorithm has. If the market has moved beyond the Bank’s price tolerance for execution of the trade during the pause, Last Look will reject the trade.[15]Last Look is used by the Bank to protect it against trading on stale prices due to latency (delays in a Market Maker updating its prices), but also against trading behaviours such as “aggregation” and “order splitting”. The latter occurs where a counterparty splits an order for 10 million of a particular currency, into 10 orders of one million, and sends each smaller order to 10 different Market Makers. A counterparty splits its orders to obtain a more attractive price than would be offered to a single order for 10 million. There are numerous such trading behaviours which can result in Market Makers losing money on trades. Last Look is widely used by Marker Makers to protect them against adverse changes in market price between generating a quote for a trade and executing the trade.[16]Last Look was introduced into the Respondent’s technology systems before the Claimant was employed by the Respondent.[17]The Respondent has two technology systems controlling its eFX business: “BARX” and “BATS”. LL was originally implemented in BARX in 2008 and, later, in BATS in 2010. BATS LL introduced several new, different rules for determining whether a trade should be rejected. The settings of the LL algorithms in both BARX and BATS could be adjusted to vary the behaviour of the algorithms.[18]Almost without exception, Last Look is not applied to trades executed through the Bank’s GUI channel. It is applied to trades executed through other channels.[19]At about the beginning of 2015, the New York State Department for Financial Services (“DFS”) began an investigation into the Bank’s use of its LL system. The risk to the Bank in the DFS’s investigation was the potential revocation of its banking licence for New York State. This would affect its activities in New York City, one of the principal financial centres in the World.[20]On 17 November 2015, the Bank entered into a Consent Order with DFS under which it paid a civil penalty of $150 million and agreed, under the heading “Employee Discipline”:[31]A Barclays Managing Director and Global Head of Electronic Fixed Income, Currencies, and Commodities (“eFICC”) Automated Flow Trading has been suspended but remains employed by the Bank. The Department orders the Bank to take all steps necessary to terminate this individual, who played a role in the misconduct discussed in this Consent Order. 21. That provision referred to the Claimant. The Consent Order also provided, at paragraph 33:[33]If a judicial or regulatory determination or order is issued finding that the termination of any of the above employees is not permissible under local law, then such employee nevertheless shall not be allowed to hold or assume any duties, responsibilities, or activities involving compliance, FX benchmarks, or any matter relating to US or US dollar operations. 22. A separate investigation was started by the Attorney General for New York (“NYAG”). This led to no further action. No regulatory action was taken in relation to the Respondent’s use of Last Look by, either the Financial Conduct Authority in the UK, or the United States Department of Justice. Both the latter bodies have relevant regulatory authority over the Respondent’s FX business. 23. On 30 November 2015, the Respondent commenced disciplinary proceedings against the Claimant. These led to his dismissal with notice, allegedly for misconduct. His effective date of termination was 15 December 2016. 24. The Respondent contended that, in broad summary, it dismissed the Claimant because the Claimant (i) showed a lack of transparency about Last Look and encouraged his team to do the same, in a way which fostered a distrustful and “closed” environment which was not professional, transparent or collaborative (allegations 2 and 3 against him); had a negative attitude towards clients and misused LL as a profit opportunity (allegation 4); (iii) failed to drive forward the plan to make BATS and BARX symmetrical (allegation 6); and (v) failed to implement appropriate systems and controls (allegation 7). Relevant Procedures and Policies 25. During his employment, the Claimant was subject to a number of policies and contractual duties, including the Respondent’s Global Supervision Policy, its Global Code of Conduct, the Respondent’s Disciplinary Policy and the Claimant’s contract of employment. 26. During the Tribunal proceedings, the Claimant highlighted the following provisions of those documents: “Global Supervision Policy – (Tab 5A, Bundle B2)• P388: ‘The firm’s internal control mechanisms rely on appropriate segregation of duties between functions’.• P399: ‘proprietary information on positions and trading strategies and any deal related hedges must also be kept strictly confidential’• P401: “Need to know policy. This policy requires that information held by a representative of the firm should only be disclosed where there is a legitimate need to know’• P401: ‘As a supervisor you should frequently remind your team of the following guidelines with respect to handling confidential information. Avoid discussing confidential matters…’• P423: ‘Information Barriers …… electronic separation to ensure that electronically stored material should not be accessible by personnel without a legitimate need to access such information’ Contract of Employment – (Tab 4A, Bundle B2)• P296: ‘you have a personal responsibility to protect and maintain confidentiality belonging or relating to the company … You must use your best endeavours to prevent the unauthorised publication or disclosure of any such confidential or secret information’• P 297: ‘keep confidential all intellectual Property created or conceived by you alone or with others’ Global Code of Conduct – (Tab 5B, Bundle B2)• P465: ‘The information you obtain through your employment by the firm will almost always belong to the firm…and is therefore considered to be confidential’ ‘Presume that information is confidential and always treat it as such…Do not communicate confidential or commercial information to other people within the Investment Bank unless: (i) there is a clear need to know on the part of the recipient’• P466: ‘Do not disclose any confidential information to anyone outside the firm or anyone inside unless they have a need to know’ Disciplinary Policy – (p21, Bundle A1) The following are Gross Misconduct:• ‘Unauthorised disclosure, or use, of Barclays’ confidential information’• Non-compliance with rules on ‘confidential information’• Breach of Code of Conduct• Breach of conditions in contract of employment” 27. The Respondent highlighted that the Claimant was also subject to the following duties under the Policies: Global Supervision Policy: 27.1. To take all reasonable steps to establish a strong culture of compliance in his business area [B2/383]; 27.2. To take all reasonable steps to ensure that employees supplied all required information to clients to enable them to understand the features, risks and rewards of the particular product being marketed to them [B2/392]; and 27.3. To execute client orders as soon as practicable in the circumstances, unless there were reasonable grounds to believe it was in the best interests of the client to postpone execution [B2/397]; Global Code of Conduct: 27.4. To engage in transactions at market prices, except in certain circumstances where reasonable steps had been taken to ensure the transaction is not being entered into for an improper purpose [B2/463]; 27.5. To avoid action/inaction which might have the potential to incur reputational risk for the Bank [B2/470]; and Barclays Group: Statement on Corporate Conduct and Ethics: 27.6. To treat customers fairly [B2/475]; and 27.7. To contribute to a safe and healthy working environment in which employees are treated fairly and with respect [B2/476].” The Investigatory and Disciplinary Process 28. During 2015 the Claimant was interviewed by the New York State Department for Financial Services (“DFS”), the Department of Justice in America and by representatives of the Attorney General for New York. He was also interviewed by external and in-house lawyers for the Bank. During each of these interviews the Claimant was supported by independent legal advisors funded by the Respondent. The DFS, Department of Justice and Attorney General for New York all had regulatory responsibility in relation to financial services. 29. The Claimant helped the Respondent prepare a Subpoena response to the New York Attorney General, including files showing Last Look reject statistics in relation to counterparties’ trades. 30. The Respondent suspended the Claimant on 13 August 2015. On 16 November 2015, following an internal investigation at the Respondent, a recommendation was made that the Claimant be referred to a disciplinary hearing (Bundle A1 pages 43 – 51). The allegations against the Claimant referred to in the recommendation were later set out in writing to the Claimant. The recommendation detailed various emails and communications which underpinned reference to disciplinary proceedings. Again, these were later brought to the Claimant’s attention. The recommendation also said this: “42. The communications detailed above, particularly those concerning the level of transparency with colleagues and customers, need to be balanced with the following factors: (a) The number of ‘problematic’ communications is relatively small when balanced with the overall population of communications reviewed by the investigation; (b) There are many examples of open and transparent communications with BARX users about rejects and Last Look, as well as examples of clients negotiating or seeking to negotiate their Last Look settings – suggesting a high degree of awareness amongst customers of Last Look and its relevance to their order flow; and (c) Sales were generally aware of Last Look; (d) Last Look has been commonly understood in the market for many years and market participants were well aware that Barclays, and other banks, had a discretion to reject trade requests, and reject requests using Last Look; (e) The clients affected by rejections were overwhelmingly the most sophisticated BARX counterparties and, therefore, the group most likely to take advantage of any information about Barclays’ Last Look settings to the detriment of Barclays (and BARX pricing). With that in mind, it may have been appropriate to withhold information in order to maintain the integrity of Last Look as a legitimate defensive tool for Barclays.[43]In addition, there is evidence to suggest that Mr. Fortheringhame was aware of Barclays supervisory expectations, as detailed in the GSP, and that he spent a considerable amount of time monitoring Last Look data and directing his team to ensure settings were appropriate for clients.” 31. On 30 November 2015, Sonya Bonniface, Director of Human Resources at the Respondent, wrote to the Claimant, inviting him to a disciplinary hearing. She said that the purpose of the hearing would be to consider whether disciplinary action should be taken against the Claimant in relation to the following allegations concerning his conduct as Head of Automated Flow Trading in the Respondent’s eFICC Trading Business: “1. Inappropriate or injudicious use of language in that you sent a number of communications that created reputational risk for Barclays, particularly regarding the language used and the impact of those communications on your reports. For example, your emails dated 7 February 2011 and 29 June 2012. 2. Inappropriate directions and guidance to staff regarding disclosure to customer and colleagues in that, over a period of several years, you repeatedly instructed your reports to withhold information regarding Last Look from their counterparts in Sales. For example, your emails dated 6 June 2011, 18 July 2011, 10 October 2011, 7 November 2011 and 29 November 2011. (In the 6 June 2011 email the Claimant had said, “In fact avoid mentioning the existence of the whole BATS Last Look functionality. If you get enquiries just obfuscate and stonewall.” On 18 July 2011, the Claimant had said, “Do not discuss any part of this work with Sales… changes are neither driven nor notified to Sales,” and, in the 10 October 2011 email, the Claimant said, “Please remember do not discuss BATS LL with Sales at all. They don’t need to know it exists.” In his email of 7 November 2011, the Claimant had said, “Do not discuss Last Look with Sales.” In his email of 29 November 2011, the Claimant had said, “Can you try and make sure that Sales don’t ever contact anyone in BATS IT or QA directly… It would be best if they don’t even know the names of people in those teams..” ). 3. These instructions contributed to an environment in which your team was not transparent with client-facing employees in Sales regarding Last Look (for example, the email from Lionel Ebenezer Raj dated 24 April 2012) and may have contributed to an environment in which your reports encouraged Sales to falsely blame Last Look rejects on technical glitches (for example, the email from Sharad Arora dated 24 June 2011). (In 24 June 2011 email, the member of the Claimant’s team had said, “If you don’t want to tell him about Last Look we can always tell him there is an IT glitch etc etc.” ) 4. Inappropriate direction and guidance to your team regarding treatment of customers and management of conflicts of interest. For instance:(a) You portrayed the potential lack of transparency over Last Look rejects for clients trading through ECNs (such as Currenex and Integral) as a P&L opportunity for Barclays (for example, your email of 12 March 2012); (In the Claimant’s 12 March 2012 email he had said, “If a client hasn’t complained consider raising the reject ratio and recalculating the optimal LL settings… really squeeze them on rejects.”)(b) You similarly instructed that ECN clients should be targeted for higher rejection rates (for example your emails of 2 August 2011, 27 March 2012 and 14 February 2013); (In the Claimant’s email of 27 March 2012 he had stated, “I think we just go ahead with it and then gradually tighten the rule until someone complains.”) and(c) You instructed that fixed delays be added to customer’s Last Look hold times to hide the time improvements gained from the Project Marlin Infrastructure upgrade, in order to ‘make more money’ (your email of 15 March 2012) (The Claimant’s email of 15 March 2011 to Mike Bagguley had said of Project Marlin, “From a revenue perspective the main effects will be: 1. Longer last look times will enable us to make more money with the same number of trade rejects and the same trade confirm times...”. 5. Inaccurate marketing materials being issued that inaccurately described the execution of stop loss orders on Powerfill marketing materials (see BARX FX Order PowerFill materials). 6. Inadequate resolution of IT issues concerning the failure to implement a decision in September 2014 to make BARX Last Look symmetrical and a bug which affected Stop Loss Capping from September 2014 to October 2015. Whilst these two oversights may have been the result of issues with the IT function, which you did not oversee, they were matters which directly affected your business area and its clients. Consequently, they raise concerns with regards to the extent to which you managed the Automated Flow Trading business and ensured that risks were properly monitored and, where identified, mitigated. 7. Inadequate supervision: In addition to the evidence detailed above, there appear to have been potential gaps in the systems and controls of the Automated Flow Trading business for which you may have been accountable. For example, it appears that: There was no written procedure detailing the change management process for Last Look, including the process for approving changes to Last Look settings and determining whether settings were suitable for particular client types, such as Real Money and Corporate clients. (a) There were no written supervisory procedures for the introduction and periodic review of Last look settings to assure that they continued to be appropriate and consistent with the stated rationale for Last Look; (b) There were no written procedures governing the management of risks associated with inconsistencies arising from the interplay between BATS and BARX FX. (c) There were no written procedures or guidelines in place to ensure that the configuration of pricing for clients was fair and reasonable. The absence of documented procedures of the type detailed above raises concerns as to whether you had complied with the expectations detailed in Barclays’ Global Supervisory Policies for the Investment Bank (the ‘GSP’), for instance the expectation that you would:(d) take reasonable steps to ensure that your business was organised so that it could be controlled effectively and that it complied with relevant legal and regulatory requirements and standards (2009 GSP); and(e) be able to demonstrate and evidence the controls and procedures used in order to meet your supervisory responsibilities (2012 GSP) Without adequate supervisory systems in place, there was a risk that you would be unable to manage and control the risks associated with the use of Last Look, including the risk that it could be used inappropriately and the risk that clients would be inadequately informed as to the use and effect of Last Look. Please note that the documents referred to above are a non-exhaustive example of the evidence that may be referred to at the hearing and that all the documents we will sent through to you shortly may also be taken into consideration)..” 32. Ms Bonniface told the Claimant that, because of the serious nature of the allegations, if disciplinary action was decided to be appropriate, sanctions up to and including dismissal, with or without notice, would be considered. Ms Bonniface told the Claimant of his right to bring a Barclays’ employee as a companion to the hearing. 33. In the Claimant’s 13 August 2015 letter of suspension however, the Respondent had said that, during the Claimant’s suspension, “You may not…contact any clients, or employee of Barclays or the Barclays Group to discuss your leave…”. The letter also said, “You must not discuss the circumstances connected to your suspension or this investigation. Also you must not, therefore, discuss these matters with any others either inside or outside the Bank…” (Bundle A1, pages 30 – 31). 34. On 2 December 2015 the Claimant replied to Ms Bonniface. He said that he had received 2 lever arch files containing documentation and asked that the disciplinary hearing be postponed. The Claimant requested additional documents which he said he required in order to prepare adequately for the disciplinary hearing. The Claimant said that he had seen a New York State DFS press release dated 18 November 2015, which confirmed that the Bank had been ordered to take all steps necessary to terminate the employment of the Managing Director and Global Head of Electronic Fixing Currencies and Commodities, as well as the DFS Order dated 17 November, which repeated that requirement. The Claimant said that he believed that he was the individual referred to and it seemed clear that the outcome of the disciplinary action was a foregone conclusion, in that the Bank was simply going through the motions, to give the appearance of acting reasonably (bundle A1, p.60). 35. The Claimant requested the following documents: missing emails exhibited to the memorandum of the Claimant’s first interview; “A database copy of all the emails I sent while at Barclays in an electronically searchable format; A copy of all electronic chats and emails between Barclays employees and clients…contain any reference to Last Look…or the terms “reject”, “reject ratio”, “hold time/period”, “holding time/period” (The Claimant also asked that, in addition, all the search terms that were used by the Bank in its investigation be used); “The documentation describing the policy on Written Supervisory Procedures” when the policy went live and how it was notified to the Claimant; “All WSPs in the FX and eFICC businesses” and the date when they were formally signed off; … “All the contents of the eFICC team wiki referencing in any way practices, policies, procedures etc. and the date of any changes”; full audit reports for Audit Department investigations into eFX business during the Claimant’s period of employment; all reports by the Operational Risk Department on the eFX business during the Claimant’s employment; all communications with regulators concerning the operation of the eFX business during the Claimant’s employment; … The Desk Procedure document for the eFX business; “All documents and emails/BRDs sent or received by Nick Wells, Daron Bowes and Nick Shires concerning the request to make BARX LL symmetric and to make the Stop Loss gapping logic fully symmetric. All mention of this request and its remediation. The transcript of the interviews with the above personnel regarding how the error occurred and whose enquiry brought it to light and what involvement [the Claimant] had in directing that it should be remedied”;…documents describing the exact legal and regulatory requirements referred to in allegation 7(d) against the Claimant; a full list of all compliance breaches recorded against the Claimant’s name; the complete Subpoena response to the New York Attorney General including all the excel files describing the statistics around Last Look; copies of all communications from the DFS to Barclays concerning Last Look and notes of meetings and conversations, and correspondence, between the Bank and DFS in which the Claimant’s conduct and/or requirement in paragraph 31 of the DFS order were discussed; transcripts of interviews with other witnesses who participated in the DFS investigation; and notes of internal bank meetings/ conversations/ correspondence in which the Claimant’s conduct and the requirement of paragraph 31 of the DFS order were discussed. 36. On 3 December 2015, Ms Bonniface wrote to the Claimant, agreeing to postpone the disciplinary hearing and saying that she would respond in due course to the Claimant’s request for further documents (A1, p.63). 37. On 25 February 2016 Ms Bonniface wrote again to the Claimant (A1, p.64-68). Ms Bonniface responded to the Claimant’s document requests. She provided the missing sets of exhibits associated with the Claimant’s first interview memorandum but said, in relation to the Claimant’s request for all emails he sent while at Barclays, that it was a very broad request, likely to generate hundreds of thousands of irrelevant documents. She said that the communications which were relevant to the issues to be determined at the hearing were provided to the Claimant on 30 November 2015, as part of the disciplinary hearing bundle. Ms Bonniface said that if there were other documents or matters which the Claimant felt were relevant, then he would have the opportunity to raise them at the disciplinary hearing with the hearing manager, who could then consider whether further enquiries or documents were required before reaching a decision. Ms Bonniface said that the Claimant’s request for a copy of all electronic chats and emails between Barclays employees and clients and other employees containing any references to Last Look or terms “reject”, reject ratio”, “hold time/period” and “holding time/period” was also overly broad, but that, again, the Claimant could raise any matters, or documents, in the hearing. 38. Ms Bonniface provided the Global Policies and relevant policies requested by the Claimant and said that she was currently retrieving copies of relevant written supervisory procedures in the eFX and eFICC business. She also enclosed a copy of the Respondent’s Global Electronic Trading Policy. 39. In respect of the Claimant’s request for the contents of the eFICC team wiki referencing any practices, procedures and policies, Ms Bonniface said that the Claimant’s request referred to the internal web page created by the eFICC Trading Desk to store procedures, control documents and related materials. She said that those materials contained proprietary and confidential information, as well as information which was likely to be irrelevant, and that the Respondent did not intend to provide the Claimant with anything further. 40. Ms Bonniface said that the Respondent was not aware of any audits by Barclays internal Audit which included a review of Last Look or eFICC trading during the relevant period, or of any reports by the Operational Risk Department on Last Look, or its use. She said that all communications between the Bank and its regulatory supervisors were confidential and would not be disclosed. Ms Bonniface said that algorithmic reference sheets and control reference sheets (ARS and CRS) documents for the eFICC business contained propriety and confidential information and that the Respondent was not aware of any which specifically concerned Last Look. 41. Regarding the Claimant’s request for desk procedures for the eFX business, Ms Bonniface said that she was enclosing a copy of the BATS/BARX FX algorithmic desk procedures dated October 2013. 42. In respect of the Claimant’s request for documents and emails and BRDs sent or received by Nick Wells, Daron Bowes and Nick Shires, concerning the request to make BARX LL symmetric and transcripts of interviews, Ms Bonniface said that transcripts of interviews with Barclays staff during the course of its investigations into Last Look were legally privileged and confidential and that the Respondent had provided all relevant communications with staff. 43. Ms Bonniface specified the legal and regulatory requirements relied on by the Respondent, including extracts from Barclays Global Code of Conduct.[44]Ms Bonniface said that the complete Subpoena Response to the New York Attorney General, including Excel files, were confidential as between Barclays and one of its regulatory supervisors and that the Respondent did not propose to provide copies to the Claimant.[45]Ms Bonniface also asserted privilege in relation to communications between the DFS and Barclays concerning Last Look and meetings, conversations and interviews between the Respondent and DFS and internally in the Respondent relating to the requirement of the DFS order at paragraph 31.[46]Ms Bonniface said, in response to many of the Claimant’s requests, that the Claimant could raise any other relevant documents or matters with the hearing manager, who would consider whether further enquiries or documents were required, before he came to a decision.[47]The Respondent did not provide the Claimant with its Subpoena Response to the Attorney General New York, nor the Excel spreadsheets attached to it. The Respondent did not provide the Claimant with any additional correspondence or interview transcripts regarding the implementation of Last Look symmetry. These documents were only disclosed to the Claimant during disclosure and/or specific disclosure in these proceedings.[48]The Claimant was not provided with all documents concerning Last Look stored centrally on the Claimant’s team intranet site (the wiki). He obtained these on his application for specific disclosure in these proceedings (bundle A3, p.1287-1332). These documents comprise a BATS Last Look log, recording changes to Last Look framework during 2014. They record various occasions upon which clients’ Last Look settings in BATS were changed. The documents also include a list of BATS clients with Last Look exceptions (p.1296) and their required reject ratio. The documents also comprise a BATS Last Look rule change log for 2012, recording changes to settings for clients during that year.[49]In addition, the documents obtained on disclosure included a BATS Last Look Support Document, which the Claimant told the Tribunal he had been responsible for creating. The Last Look Support Document set out 10 principles to be applied in determining Last Look settings. These included: “1. The longer the holding period and the higher the target reject ratio, the more revenue we make from a client. Be firm when specifying these parameters. … 4. There are just 2 Default groups… 5. The exceptions list should be as short as possible. All clients should try to be put on their default setting. … 8. Always fill in the reason why a client needs to be on the exception list in the comments section… 9. (Reject ratios) for exception clients will be monitored regularly to identify deviations from target reject ratios. Setting will be adjusted to achieve target reject ratios. 10. Reject ratios for all ‘default’ clients will be monitored. Increases in reject ratio are often indicative of increased toxicity of flow or technology/pricing problems.” (A3, p.1316)[50]The Support document also contained links to a guide to assessing if the Last Look settings are correct for clients “Last Look Optimisation” (page A3/1318). The Support document dealt with client exceptions and stated: “Firstly, it must be said that we want to keep the number of exception clients as low as possible. If there is a business reason for putting a client on an alternative setting. The correct procedure is: 1. Email London with the client, the reason and expected reject ratio required. 2. Analysis will be done and findings sent back. 3. London will amend the codebase to reflect any change. 4. The exceptions page will be updated and monitored weekly to make sure the expected Reject Ratio is being met.” (p.A3, 1319)[51]Ms Bonniface confirmed that the Claimant’s disciplinary hearing would take place on 15 March 2016. She said that no decision had been taken by the Respondent in relation to the allegations against him. Ms Bonniface said that the Respondent acknowledged the New York State Department of Financial Services press release and the Order dated 17 November 2015. She said that the Bank had appointed John Mahon as the independent hearing manager to consider the allegations against the Claimant and determine the outcome. She said that the decision would be independently determined by Mr Mahon, on the basis of the evidence set out in the disciplinary file and any further representations that the Claimant wished to make.[52]Mr John Mahon, then Co-Head of Barclays Non-Core Business, held a disciplinary hearing with the Claimant on 22 March 2016. At that time, Mr Mahon was a member of the Respondent’s Regulatory Investigations Oversight Committee, “RIOC”. The RIOC was a standing body to provide oversight, direction and supervision of significant internal and external regulatory investigations and remediation.[53]The RIOC had approved the agreement of the Consent Order with the DFS.[54]The Claimant prepared a written response to the allegations, to which he appended documents on which he relied in support of his contentions. The Claimant’s response was contained in Tribunal Bundles labelled, “Claimant’s Defensive Script Volume C1 & C2”. The attached pack of documents was contained in Tribunal Bundle volumes D1 and D2. Volumes C1 and C2 were about 580 pages long. Volumes D1 and D2 were about 550 pages long.[55]In relation to the allegation that he had “given inappropriate directions and guidance to staff regarding disclosure to customers and colleagues,” in that he had, “repeatedly instructed his reports to withhold information regarding Last Look from their counterparts in sales including .. emails of 6 June 2011, 10 October 2011, 7 November 2011 and 29 November 2011”, the Claimant said, in his written response, that he was duty bound to keep algorithmic implementation details confidential, but that he had actively informed and trained sales employees about the general principals and properties of Last Look. He said that Sales employees fully understood these.[56]The Claimant said that he had created a Sales training role. He referred to an email of 22 June 2012 (bundle D1, p.74) wherein he had set up a Last Look oversight role for a trader, whose duties included leading the education of Sales about Last Look, its benefits and why the Respondent needed to be firm. The Claimant said he had organised meetings with Sales management with the specific discussion item “Last Look/Rejects” (D1, p.14). The Claimant also said that Sales had tools which allowed them to view Last Look details, including BARX Trading Report reject ratio reports, which were supported by a PowerPoint training understanding BARX Trading Reports, in which reject ratio reports were explained (bundle D1, pgs.42-43). The Claimant also pointed to evidence of a Sales person using the reject ratio report (bundle D2, pgs.471- 472). The Claimant also said that he had designed a toxicity index tool and pointed to an email of 15 June 2012 (bundle D1, p.186) in which the Claimant had set up a project to create a toxicity index for client flow. The Claimant also said that there were tools used by the Protection Support Team, to check reject logs and look at configurations, to use the information to inform sales. The Claimant further referred to an email chain on 12 July 2011, which showed Sales employees seeking the reasons for a reject and BARX support supplying the reason as Last Look, along with the Last Look settings for the client (bundle D2, pgs.485-486).[57]The Claimant also attached 23 emails in which the Claimant had communicated with sales staff about Last Look. These included an email to Marek Robertson, Head of Sales, on 20 June 2012, setting out how Last Look operated saying, “There is a Sales Reject Ratio report on BTR which should provide transparency about the rejects…Clients who give us sharp flow will get higher rejects – that’s the deal” (Bundle D1, p.71). Another email from the sales team to the Claimant showed the sales team requesting that the Claimant ensure that Last Look was put in place in respect of particular clients (bundle D1, p.81).[58]An email of 29 October 2012 showed a member of the Claimant’s team asking whether the Claimant was happy if the “hold times” on Last Look were sent to the members of the Sales team and the Claimant replying that he was (bundle D1, p.87). The emails also included one from the Claimant to Mr O’Sullivan of the Sales team on 15 June 2012, wherein the Claimant provided Sales with an in-depth analysis of the Last Look Rejects for a client (bundle D2, p.473).[59]The Claimant said in his written response, “There are literally hundreds of records showing sales discussing Last Look,” which the Claimant said had been denied to him. The Claimant also said that clients knew about Last Look and gave references for three emails in which clients were discussing Last Look with the Respondent (bundle C1, p.7).[60]The Claimant also responded to the allegation that, on 6 June 2011, the Claimant had said in an email: “Do not involve Sales in anyway whatsoever. In fact avoid mentioning the existence of the whole BATS Last Look functionality. If you get enquiries just obfuscate and stonewall.” The Claimant said that this was completely consistent with the standard policy concerning technical algorithm details (bundle C1, p.7).[61]The Claimant addressed an email on 10 October 2011, in which the Claimant had said (bundle A1, p.168): “Please remember do not discuss BATS Last Look with Sales at all, they don’t need to know it exists. It’s a tool that we will apply systematically within QA and BATS Trading. Putting Sales in the loop will just add noise to the process.” Again, the Claimant said, in his response, that this was consistent with the standard policy concerning not disclosing algorithm details.[62]The Claimant also addressed an email he had sent on 7 November 2011, in which he had said: “Do not discuss Last Look with Sales. If there has been a spurt just blame it on the weekend IT release and say it’s being fixed.” (bundle A1, p.191). The Claimant commented that he had also said, in the email, that there should not have been an increase in Last Look rejects. He said that the email was completely truthful. He said: “The spurt in rejects that occurred on this occasion was due to a slight error in a “widely known” IT release as is quite clear in the immediately preceding email to which this is a response. For this technology release great effort was made beforehand to try and ensure that there was no such change in the reject rates…” The Claimant referred to a number of emails showing proof of the effort to keep Last Look reject rates constant (bundle D1, pgs.55, 233, 239 and 241).[63]On 29 November 2011, the Claimant had said in an email to his direct report: “Can you try and make sure that Sales don’t ever contact anyone in BATS IT or QA directly. They always need to go through BATS Trading. It would be best if they don’t even know the names of people in those teams.” (bundle A1, p.172) The Claimant said of this, in his response: “This is just good team organisation… We don’t allow the clients to contact the quants directly with good reason. The best hope of ensuring accurate communication is to observe these organisational principles.” He quoted from the Bank’s Global Supervision Policy: “The firm’s internal control mechanisms rely on appropriate segregation of duties between functions.” (bundle C1, p.8)[64]In response to allegation 3, that the Claimant’s instructions contributed to an environment in which his team was not transparent with client facing employees in Sales regarding Last Look and may have contributed to an environment in which the Claimant’s reports encouraged Sales to falsely blame Last Look Rejects on technical glitches, for example, an email from Sharad Orera on 24 June 2011, the Claimant said that there was no such environment and, in fact, that there was a strong environment of constant open engagement with Sales and support staff and clients. The Claimant provided 42 emails showing what he said was a general knowledge amongst Sales and clients and openness about Last Look. The Claimant said that the emails were the tip of the iceberg, but that the Respondent had refused to provide the Claimant with all Sales and client support emails which referred to Last Look. The emails the Claimant referred to included: an email from Sales person saying: “Last Look settings reviewed with BATS” (bundle D1, p.113); an email from a member of the Sales team to other Sales employees and the Claimant, saying that, as agreed with the Claimant, reject rates would be widened and concluding: “We will still have Last Look protection in the interim” (bundle D1, p.130) and; an email from the Sales team to many other members of the Sales team saying: “Last Look settings reviewed with BATS and changes made”. (bundle D1, p.113).[65]With regard to the specific email mentioned in the allegation, sent by a member of the Claimant’s team, the Claimant said that the email was not representative of team member’s behaviour and was not something that the Claimant had ever encouraged. The Claimant said: “In his defence he is dealing with a dishonest counterparty and I think this may have clouded his judgment slightly on this occasion. I know him to be an honest professional.”[66]The Claimant provided 11 emails showing this team member correctly communicating regarding Last Look, including an email of 19 December 2011, in which the team member said, “We informed the client before we added them on Last Look” (bundle D1, p.264) and another email which that team member sent on 18 April 2012 saying, “Yes, imposing Last Look will help. But we need to tell the client about it before we do that.” (bundle D1, p.270)[67]The Claimant also addressed allegation 4. The Claimant said that it was completely clear to all ECN users when they were rejected by the Respondent and what their reject ratios were (bundle C2, p.142). The Claimant said that the high toxicity and unprofitability of the ECN business was directly due to the trading behaviour of the counterparties, “who by construction deliberately trade not full, sweep the stack, machine gun etc – attempting to get prices for large size trades that are only given to small size trades.” The Claimant said that profitability of the ECN channel had been consistently at, or below, zero and said that this could be proven by looking at the Profit and Loss reports (the Claimant was not given Profit and Loss reports).[68]The Claimant referred to his 2012 end of year review when he was given the objective, “Last Look should have several mio extra squeezed out ASAP.” (mio is an abbreviation of million). The Claimant said that he was very open about publicizing a reduced service level and referred to an email where he agreed with his direct report that “very reduced service levels” should be given to any aggregator client and that this should be made public (Bundle D1p.194 to 195). The Claimant said that the aim had been to improve client service and protection and again referred to an email dated 9 September 2012 (bundle D2, p.353), where his Last Look coordinator had prepared a year to year summary of Last Look rule performance and concluded the email by saying: “In summary the trend through the year has been to reduce overall reject ratios to improve client service whilst still offering consistent performance in P & L protection from Last Look.”[69]With regard to allegation 4c, that the Claimant had instructed fixed delays to be added to customer’s Last Look hold times, the Claimant said: “The Marlin project was a very expensive and lengthy upgrade to the technology infrastructure. It is totally acceptable that we try to get a return on that investment by strengthening our defences to toxic flow. We achieved this without changing the reject ratio or confirmation time experienced by clients. Any unexpected initial hiccups were corrected immediately.” Bundle C2, p144. He referred to emails showing efforts to keep reject ratios constant for clients. The Claimant also referred to the 15 March 2011 email that he had sent to Mike Bagguley, his line manager’s manager, about the project Marlin infrastructure upgrade in which the Claimant had said: “From a revenue perspective the main effects will be: 1. Longer last look times will enable us to make more money with the same number of trade rejects and the same trade confirm times…” The Claimant said that email proved that his approach was fine with senior management level (bundle D1, p.245; C2, p144).[70]The Claimant also provided responses to allegations 1 and 5. Those allegations were not subsequently upheld.[71]The Claimant responded to allegation 6, which alleged that the Claimant had been responsible for inadequate resolution of IT issues regarding BARX Last Look symmetry.[72]The Claimant said that he had specified that BARX Last Look should be made symmetrical in or about March 2014 and that he had discovered that IT had made a mistake and that it had not been implemented. The Claimant said: “I notified compliance and the legal team investigating Last Look. Can prove this when I get all communication records… I repeatedly chased to have it completed… I am confident that when I have access to witness statements and all my emails these statements will be corroborated.” He also referred to having noticed a bug in another electronic system and said: “It’s quite outrageous that the firm is trying to turn these 2 examples of my extreme diligence and attention to detail into misconduct issues. I should be praised for these actions. There’s no-one else at my level of seniority in a business position who would have spotted and dealt with errors down at this level of technical detail. If I hadn’t “appropriately monitored” here, these two issues may still be sitting there unnoticed.” (bundle C2, p.145)[73]Lastly, the Claimant addressed allegation 7, which was, in summary, that the Claimant was guilty of inadequate supervision and implementing inadequate controls for approving changes to Last Look settings and determining whether settings were suitable to particular client types (like Corporate and Real Money); so that the Claimant had not managed and controlled the risks associated with the use of Last Look.[74]The Claimant said that there was a clear policy to assign Real Money and Corporate clients to, either, no Last Look setting, or the loosest setting. He said that he could not prove that the treatment of Real Money or Corporate was deliberately gentle compared to other sharper clients, as he had been unfairly refused access to the relevant documents. The Claimant said, however, that the statistics demonstrated overwhelmingly that this was true: the spreadsheet sent to the New York Attorney General subpoena for US clients sorted by highest rejects numbers in 2014 showed that the first Real Money or Corporate clients appeared at position 99.[75]The Claimant asserted that it was completely untrue that there were no written supervisory procedures for the introduction and periodic review of Last Look settings. He said: “I added a large amount of written procedures and process so this was a closely controlled and monitored activity. As I have been denied access to the main documents that would prove this I am unable to fairly refute this accusation. There were no written procedures when I arrived. All the process surrounding the setting of Last Look was created by me… I rationalised the settings and implemented a clear process. Fair, objective analysis determining settings with a Trader veto overlay to pick up any special cases agreed with clients and clear instructions to process feedback from Sales and clients.” The Claimant said that Compliance, Legal, Trading management and Sales management all knew about Last Look, but never once asked for any other controls or written procedures. He referred to his own email to the Head of Electronic Sales, the Head of Compliance and the Head of Legal, explaining what Last Look was and how it worked in July 2014 (bundle D1, p189). In the email, the Claimant set out, for the Compliance and Legal Departments, the Last Look process and justification for making it symmetric.[76]With regard to part (b) of allegation 7, the Claimant commented that it misunderstood the nature of IT systems interactions and that the consequences of BARX and BATS interactions were so numerous and diverse and diffuse in their effects that to have a written procedure to manage all the associated risks was impossible. With regard to the allegation that there was no written procedure or guideline in place to ensure that the configuration of pricing for clients was fair and reasonable, the Claimant said that it should never have been Trading’s responsibility to ensure that pricing was appropriate for a client, as Trading did not control it, Sales did. The Claimant listed 25 examples of instructions and processes which he had introduced in his business. He said: “If I hadn’t been unfairly denied access to all my emails and calendar records I would be able to demonstrate literally thousands of examples of me working on supervision, organisation, controls and policies for this business. I can prove literally 1000’s of meetings and communications with reports and other colleagues in control functions that show me meeting my supervisory responsibilities.” (bundle C2, p.150).[77]The Claimant also listed 20 examples, from his appraisal reviews, where his manager, Tim Cartledge, praised the Claimant’s level of supervision and control of his business (bundle C2, pgs.150 to 152). The Claimant referred to a “mountain of policies and procedures on the wiki” and regular weekly meetings with his reports and compliance (bundle c2, pgs.149 to 150). The Claimant said that the Respondent had produced no evidence of clients being unfairly treated. He asked that the Respondent present him with a list of clients who it believed had been treated unfairly and an explanation of why. He said that, then, he would have a reasonable chance of making a specific defence.[78]The Claimant said that his defence had been severely damaged by the firm denying him access to any of the relevant documents (bundle C2, p.154).[79]The Claimant attended a first disciplinary hearing on 22 March 2016. At the start of the meeting, the Claimant said that he would like to have had a colleague to accompany him, but that had been made impossible by the firm’s decision to forbid any of his colleagues to speak to him regarding any work matters. He said that he was not happy to continue without a companion, but would continue nonetheless.[80]At the meeting, Mr Mahon asked the Claimant whether the existence of Last Look was withheld from the Claimant’s colleagues. The Claimant referred to the Disclosure of Information Policy at the Bank and said that he had adhered to the principle of confidentiality in his role. He referred to a number of emails in which he implemented confidentiality. The Claimant said that, if a client asked for information relating to themselves, then the Claimant believed that the information should be given to them, but that the Respondent should not discuss propriety details of Last Look. The Claimant said that confidentiality was essential because of the high turnover of employees in the Bank, including Sales, any of whom would take new jobs with Barclay’s competitors. He also said that confidentiality was essential because the Respondent needed to ensure that clients were not misinformed. He said that the risk of misinformation was high due to complex algorithms, which would often change.[81]Mr Mahon asked whether clients were aware that they were assigned a profile. The Claimant said that he did not know and that Mr Mahon would need to check with Sales. Mr Mahon asked whether clients knew, or were informed, about Last Look. The Claimant said that he was not sure, but that many clients were aware of Last Look functionality, as many emails demonstrated. The Claimant said that it was not credible that any client receiving more than trivial amounts of rejects would not know that Barclays was using Last Look. He said that Last Look was standard practice in the industry. He said that electronic clients were probably made aware of it and that all orders on the fixed channel were “kill or fill” - it was very explicit. The Claimant said that he had not written the BATS Last Look terms, nor had he introduced Last Look, nor invented it.[82]Mr Mahon asked the Claimant whether he thought it would be alright for Sales to tell clients about Last Look and the Claimant confirmed that this would be OK. Mr Mahon asked what would happen if a client knew that they had a particular “basis point” for Last Look and a particular millisecond time period. The Claimant replied that, if a client knew the shape of the defence, then they could get around it.[83]The Claimant said that he had organised a meeting on 18 July 2012 with the two Heads of Sales with the specific agenda item, “Last Look/Rejects.” He said that he was not sure whether or not the whole Sales team knew about Last Look. He was not sure whether they knew that the systems and controls were changed.[84]Mr Mahon asked the Claimant whether particular settings would be abusive settings in relation to a “normal flow” client. Mr Mahon said that a long hold on an asymmetric setting for a normal client would be abusive. The Claimant disagreed. He responded that a large proportion of trades with the shortest hold time would still be loss making – 20-40% loss making. The Claimant also responded that, in his view, there were no “non toxic” clients. He said that clients with low toxicity would have their settings adjusted accordingly. The Claimant said that the settings would discriminate on the basis of toxicity, non toxic clients would have a low level of rejects.[85]The Claimant told Mr Mahon that specific tools were used by Sales to enable them to view Last Look details. The Claimant said that his team had developed BTR (Barts Trading Reports, or Data Reports) tools and a reject ratio report was part of this. He said that the report would break down the number of trades accepted and rejected. He said that the tool would not tell the Sales team about Last Look settings.[86]Mr Mahon said that trades should not be rejected just because the market had moved against Barclays. The Claimant said that BATS was behind permission walls and Sales were not supposed to know the technical details. He said that the Sales team did not need to know the way that decisions were made in Code. He said that he did not believe that the Sales employees needed to know about BATS Last Look functionality; confidentiality was key, as was emphasised in all the firm’s policies. Mr Mahon asked the Claimant why he did not inform Sales about tuning the settings. The Claimant said that this was because the process was very technical and specialised and he did not want this information leaking, as it was intellectual property.[87]Mr Mahon asked the Claimant about 8 November 2011 email, in which the Claimant had told a colleague to blame it on IT. The Claimant said that the increase in rejects was due to a slight error in a technology release (bundle A2, pgs.607 to 624).[88]The Claimant attended a second disciplinary hearing on 23 March 2016. In the interview, Mr Mahon asked the Claimant to define his view of the purpose of Last Look. The Claimant said that, in his view, Last Look was in place to defend revenues against toxic flow by abusive counterparties. Mr Mahon asked the Claimant if clients were bucketed in terms of calibration. The Claimant said that he had introduced default groups for different Channels, depending on the Channel they were connected through. He said that it was a fact that the toxicity flow from different Channels was different, so that it was reasonable for each Channel to go to different defaults. He said that he introduced an exception list. Some clients lobbied Sales for different settings, in order to vary their reject ratios. He said that it was usually the sharpest clients with a toxic flow who would do this.[89]Mr Mahon asked the Claimant how many clients were exceptions. The Claimant said that there were perhaps 50 out of 3,000 who would lobby Sales for different settings. Mr Mahon asked the Claimant if he needed to sign off for each setting change. The Claimant explained that the process for amending settings was that an employee would go on to a wiki page; fill in a form with the client name, a justification for the change and a target reject ratio. The Claimant told Mr Mahon that there was no authority required to do this, although nothing excessive was usually done. Mr Mahon asked the Claimant how many changes were made on average a week. The Claimant replied that he guessed 2 or 3 changes were made per week. Mr Mahon asked what the process was for reviewing these changes. The Claimant replied that he had a reject ratio report which he monitored once a week. He said that, despite this, he could not keep abreast of everyone’s changes and that he had delegated responsibility to members of his team to monitor this.[90]Mr Mahon asked if 2 changes to the 50 or so exception clients per week would be deemed high. Mr Mahon expressed his own view that a change every 6 months, per client, seemed quite a lot. The Claimant said, “possibly”, although it was not a stationary system and that counterparties were furiously retuning their algorithms and trading flow, to maximise profit for themselves, so that the Respondent needed to make reactive changes. Mr Mahon said he could not see any controls in place to stop a Trader changing the settings to make the reject rates go up, in order to make more money. The Claimant said that Traders did not abuse this and this was evident from the facts. Mr Mahon commented that an absence of control failure did not mitigate an absence of control. The Claimant said that control was a very loose term and that his team would not abuse it and evidence pointed to the opposite. The team was, in fact, very well controlled.[91]The Claimant said that his team did probe the sensitivity of a trading relationship. He said, however, that there was no purpose in fiddling with Last Look settings for a low toxicity client and that his team were aware of this. The Claimant said that, if Mr Mahon looked at the change logs for Last Look settings, he would see that they were all for toxic hedge funds and banks. He explained that one could compare the toxicity of flow and rejects and this would show that it was the client’s behaviour, not the firm’s which, was the primary determinant of reject ratio. The Claimant said that only 50 or so clients had bespoke settings and the others were pretty static. He said that amendments to settings would be documented in the e-change records system and wiki.[92]With regard to the Marlin IT update project, the Claimant said that he was duty bound to get a return on his investment. He said kept the client experience the same and went to much effort to do so. He ensured that the reject ratio stayed the same and corrected any deviations.[93]The Claimant said that, if he took a benign Corporate client who traded from an ECN RFQ platform, then the client would pick the lowest price if the client was buying and the highest price if the client was selling. The client would pick up on latency failures and “pick off” the marker makers. The Claimant said that this was known as “winner’s curse” and was a large source of peril in market making, but was not malicious.[94]Mr Mahon said that there was a high possibility that a request to trade would be rejected. The Claimant said that this was not the case. He said that the facts were in a spreadsheet he had created for the Attorney General of New York and that Mr Mahon should look at this. The Claimant said that Mr Mahon would see that the reject ratio related to client type. The Claimant told Mr Mahon that he sorted all the clients in 2014 by reject ratio and that it could be seen that 80 to 90% of all rejects came from a tiny proportion of clients.[95]On 31 March 2016, the Claimant emailed Jennifer Knapp, the note-taker for the disciplinary hearings, attaching part 1 of his Defensive Script for allegations 1 and 2 and references to emails (bundle C1, pgs.1 to 9)[96]The Claimant attended a third disciplinary hearing on 5 April 2016. The Claimant produced a Defensive Script in relation to these allegations shortly after the meetings were concluded (bundle C2, pgs.136 to 154) also produced emails in bundles C1, C2, D1 and D2. The whole of the bundles C1, C2, D1 and D2 was relied on by the Claimant as his written response to the allegations.[97]In the third meeting, Mr Mahon asked the Claimant whether clients knew that Last Look was not symmetric. The Claimant said that he did not know, but that he would not have any objection to them being given this information. The Claimant said that the Sales team had never questioned the symmetry of Last Look. Mr Mahon asked the Claimant why he implemented symmetry, if there was nothing in it for him or his team. The Claimant replied that he and his team would occasionally catch random market moves going the other way, which looked unfair. The reason for symmetry was to remove a possible, mostly spurious, objection to Last Look. Mr Mahon asked when symmetry was implemented, the Claimant said that it was during Q1 or Q2 2014 and that his team had gone through a lot with the Respondent’s Compliance Department. He said that the process had taken a long time and that the release had been delayed until June or July, while he had waited for Compliance approval.[98]Mr Mahon asked whether BARX or BATS symmetry was used. The Claimant said that he had specified both BARX and BATS symmetry from the start, but that IT had innocently made a mistake and did not make BARX symmetric. He said that BARX did only a small proportion of trades - about 7%. The Claimant said that he was not sure when the issue was finally fixed.[99]Mr Mahon said that he was aware that the Claimant had discovered that BARX symmetry had not been implemented properly in September or October 2014 and that, 10 months later, it had still not been rectified. He asked why the system had not been properly implemented for so long. The Claimant said that IT often took a long time to implement projects; that it was only very vital things which were undertaken quickly. He said that no Regulator had ever asked the Respondent to implement symmetry, but the Claimant had implemented it regardless. He said that Compliance would be able to help answer some of the questions. He said that he should be praised for his actions, otherwise failure to implement symmetry may have gone unnoticed.[100]With regard to allegation 7, Mr Mahon asked the Claimant whether there were written procedures to ensure that the Last Look settings were fair and reasonable for clients. The Claimant said that there were different categories of change and different procedures for each category. Mr Mahon asked whether Sales could see if a client had been on Last Look. The Claimant replied that everyone knew that non GUI clients were on Last Look, which was standard. There were approximately five GUI clients who were also on Last Look and they had all been notified. The Claimant said that all ECN clients had Last Look.[101]Mr Mahon asked whether the Claimant could turn toxic clients “off,” or cut off toxic flow. The Claimant said that he could never have done this as Sales would not agree. He said it would be contrary to the firm’s aspirations and image to turn the counterparties off. The Claimant said that they were “forced to swim with the sharks” and had to put up defences.[102]Mr Mahon said that if someone was not in the small client group of about 50, then this would mean that they were not a shark, or visa versa? The Claimant said that this was true. Mr Mahon asked about the clients that were not in this group of 50. The Claimant said that these clients could still be sharks and that they could often pick off a bad price. The Claimant explained that Last Look protected the firm from this. The Claimant said that there was a mountain of procedural and control documentation. He asked where there was any evidence that the business had not complied with appropriate standards. He said there was a long list of processes and procedures that he had introduced for the purpose of control. He said that his business was very hot on Compliance policies, desk control, procedures, documents. The Claimant read out his defensive script in relation to control and reiterated that, if he had had access to emails and calendars, then he would be able to back up his arguments. He explained that his appraisals did not make any mention of his needing to change controls and Compliance issues.[103]Mr Mahon said that he wanted to read over all the evidence and speak to other people involved.[104]On 23 March 2016, Mr Mahon emailed Sonya Bonniface in Human Resources and several members of the Respondent’s Legal team. He said, of the interviews with the Claimant, that the Claimant had seemed to imply that only a small proportion of clients, 50 out of 3,000, had individual settings, as these were the sharpest, most toxic flows. He said: “If this is true, then it gives weight to some of his arguments”. Mr Mahon commented that the Claimant had made an “interesting argument” as to how the system’s upgrade, which gave extra time to Last Look, was offset by increasing the tolerances, such that reject rates stayed the same. Mr Mahon said that, again, this needed analysis (Bundle A1, p478).[105]Also that day, a member of the Respondent’s Legal Department in New York sent Mr Mahon a spreadsheet which the Respondent had produced to the New York Attorney General’s office in connection with its Last Look investigation. This spreadsheet was attached to the Respondent’s response to New York Attorney General’s Subpoena (pgs.478 to 478a). This spreadsheet was not made available to the Claimant until an order for specific disclosure was made by the Employment Tribunal at a hearing on 10 to 11 October 2017.[106]On 5 April 2016, Mr Mahon met with Vidura Seneviratne, the Claimant’s direct report. Mr Seneviratne said that Last Look had approximately 12,000 users across 5,000 clients. He said that some clients who went through the electronic route had standard settings and tolerance, but others had more bespoke settings. He said that API channel (fixed channel) were clients or electronic communication networks who wrote their own computer programmes to send the Respondent orders and that they were on more restricted settings. He said that in 2012 to 2013 there were about 600 API clients, of which approximately 40 to 50 clients had bespoke settings. He said that 90% of clients had one of the main 3 – 5 standard settings.[107]Mr Mahon asked for a list of clients with their settings and how often the settings were changed (bundle A1, p.512). On 6 April 2016, Mr Mahon emailed Mr Seneviratne, asking for a list of all API clients, their BARX and BATS Last Look settings, and a GUI client which had a Last Look setting, on the dates 30 October 2011, 31 March 2012, 30 September 2012 and 31 March 2013 (Bundle A1, p.513).[108]On 19 April 2016, Mr Mahon interviewed Mr Seneviratne again (Bundle A1, p.517 to 520). Mr Mahon asked Mr Seneviratne how well he thought clients understood the existence of Last Look. Mr Seneviratne said that a fixed client would be aware of the idea of a Last Look and a trade being held for a period and rejected following the decision of a trader. Mr Seneviratne explained that the industry was not explicitly open about Last Look, but everyone was aware of it. Mr Seneviratne said that, in 2012, a trader could go in and change the settings whenever he liked, but that he would not do so. Mr Mahon asked Mr Seneviratne whether there would be any “sign off” preventing a trader setting an inappropriately long setting. Mr Seneviratne said that there would not. Mr Seneviratne said that, if there was a BATS Last Look change, then the Code would have to be released; it would have to be done through IT and other people, in order to obtain sign off to amend the settings.[109]Mr Mahon told Mr Seneviratne that there were some emails showing that the Claimant did not want to share any information in relation to Last Look. He asked why that was. Mr Seneviratne said that the primary difference between him and the Claimant was that Mr Seneviratne preferred to be transparent, but that the Claimant did not like to share much information at all.[110]On 19 April 2016, Mr Mahon also interviewed Marek Robertson, Head of Sales, Bundle A1, pgs.521 to 525. Marek Robertson told Mr Mahon that Last Look was viewed as applying to FIX channel, or API flow: a high volume and low return business. Mr Robertson said that Last Look was described to Sales, but not to clients, as a protection mechanism. He said that there was an original mechanism built into the BARX architecture and then another mechanism was built within BATS architecture. Mr Robertson said that the difference between the mechanisms was not something he ever fully understood. The Claimant had told him that it might be better if he did not understand.[111]Mr Robertson said that Sales were aware of the existence of Last Look and many FIX clients discussed Last Look openly. Mr Robertson said that the BARX FX RFQ application had a screen, and some of the Sales team could view “hold time” and “profit check” settings. Mr Robertson explained that what was not well understood was the BATS side of Last Look; this was not visible to Sales. Mr Robertson said that the Claimant was part of a “tell them what they need to know and no more” culture. Mr Robertson said that he did not receive reports on reject rates, but that there was a BARX trading reports web tool, where Sales could view the reject rates and the reason for the rejects. Mr Robertson said that, over time, the trading desk had become more opaque as a result of the Claimant’s management. He said that the Claimant viewed clients as “glass half empty” and that the Claimant had concerns about clients abusing the service that the firm offered.[112]Mr Roberson told Mr Mahon that the profiles he could see in BARX FX RFQ seemed to proliferate over time.[113]On 26 April 2016 Mr Seneviratne sent Last Look data and Excel spreadsheets to Mr Mahon (bundle A1, p.531).[114]On 28 April 2016, Mr Mahon interviewed Mr Seneviratne for a third time (Bundle A1, pgs.534 to 536). Mr Mahon asked Mr Seneviratne if he had access to information about the quantity of rejects in BARX and BATS in his usual course of business. Mr Seneviratne replied that he could view this on the system. Mr Mahon asked Mr Seneviratne if it would be possible to see who was rejected, and why, on any given day. Mr Seneviratne replied that this was possible and that they could also see if they were rejected through BARX or BATS.[115]On 27 May 2016, Mr Mahon emailed Ms Bonniface in HR and a member of the Respondent’s Legal Team. He said that data showed that there had been 127 changes to settings in BATS Last Look Max Loss (the major source of BATS rejections) between 30 March 2012 and 1 October 2012 and 429 changes to settings in BARX Last Look. He said that 535 clients were affected and that there were, therefore, about 22 to 23 changes per week. Mr Mahon said that the Claimant had said that there were 2 - 3 changes per week, so either the Claimant was lying, or did not know because he had no control on how people changed the settings (bundle A2, p.588).[116]On 19 May 2016, Sonya Bonniface wrote again to the Claimant, saying that Mr Mahon had completed his further meetings and would like to meet with the Claimant again to discuss. She invited him to another meeting on 26 or 30 May (bundle A2, p.590).[117]On 23 May the Claimant replied, saying that he had been surprised and disappointed to receive a request to attend yet another meeting after three lengthy meetings. He said that the intolerable stress of repeated requirements to come to the office and the prolonged process was not acceptable. He said that he had looked at the written description of Barclays disciplinary procedure and that there was no provision for an additional meeting, for further questioning, 7 weeks after the completion of the disciplinary meetings. He said, however, that in order to finally close the process, he would provide written responses to any further questions which Mr Mahon wished to pose. The Claimant said that conducting the process in writing would also solve the problem of the inaccuracy of the written records that had come out of the face-to-face meetings (bundle A2, p.589 to 590).[118]It was not in dispute that the Claimant had made substantial amendments to the original notes of the disciplinary meetings. It appears that the notes of the disciplinary meetings were not transcripts and did contain many omissions from the account that the Claimant had given, (bundle A2, p.606).[119]Ms Bonniface replied to the Claimant on 24 May 2016, saying that the meeting was intended for Mr Mahon to clarify some queries following his investigation. She said the meeting was a reasonable request and was intended as a further opportunity for the Claimant to confirm his position. She said that, Mr Mahon had given the Claimant all the time he needed to present his case in full, which had taken a number of hours, over a series of meetings, which the Claimant had willingly attended.[120]On 2 June 2016, Ms Bonniface emailed the Claimant further, saying that Mr Mahon had now confirmed that he did not have any additional queries for the Claimant (bundle A2, p.589).[121]On 6 June 2016, Mr Mahon emailed Ms Bonniface and a member of the Respondent’s Legal Team once more (bundle A2, p.595). He said that he was still looking at the data and emails and transcripts, but had some initial thoughts on the Claimant. He set out his thoughts and proposed upholding most of the allegations. He said, “... Let’s start putting the conclusion together.” (bundle A2, pgs.595 to 596)[122]On 11 July 2016, Ms Bonniface emailed the Claimant, saying that she would courier the notes of meetings between Mr Mahon and Mr Seneviratne and Mr Robertson, in advance of Mr Mahon’s final decision as to the disciplinary outcome. She asked that the Claimant provide a response to the notes (bundle A2, pgs.598 to 599).[123]On 21 July 2016, the Claimant provided comments on the notes of interviews between Mr Mahon and Mr Seneviratne and Mr Robertson (bundle A2, pgs.600 to 603).[124]On 28 July 2016, Ms Bonniface emailed the Claimant, saying that Mr Mahon had carried out additional investigations. She said that the data involved client data which, due to confidentiality, the Respondent was unable to send directly to the Claimant’s home address, but could make available for the Claimant to review at the Respondent. She said that the data covered, amongst other things: API clients with their BARX settings and BATS settings across a number of dates in 2011, 2012 and 2013; accepted and rejected trades in March and October 2012; the number of BATS rejected trades versus the number of BARX rejected trades in March and October 2012; breakdown of a number of rules and which rule rejected the trades in March and October 2012.[125]On 8 August 2016, the Claimant replied, saying that, at that stage, he did not want to come in to view the data.[126]On 10 August 2016, Ms Bonniface wrote to the Claimant enclosing the Last Look support document for BATS: LL Rule Optimisation. She asked the Claimant to provide comments on them by 15 August 2016 (bundle A2, p.655).[127]The Last Look Rule Optimisation Guide said, amongst other things: “Holding Time: If a client has excellent flow and extremely low rejects, there is no reason to hold a trade for 300 milliseconds Given a proven track record of good flow, we should move clients to a shorter holding time. Reasons for doing this; May be missing out on trades because we’re too late to confirm For legacy clients, LL look back times can work against us as liability is only applied after our LL check… For soft retail flow, they want quick confirms Sales had indicated that our holding times are excessive and this is a way to accommodate.”) The Claimant did not respond to Ms Bonniface’s letter.[128]On 18 August 2017, Ms Bonniface wrote to Mr Mahon, setting out draft conclusions, upholding all allegations, apart from allegation 5.[129]Mr Mahon replied on 21 August saying that he was considering not upholding allegation 1, otherwise Ms Bonniface’s draft looked right in tone and content (bundle A2, pgs.686 to 689).[130]On 7 September 2016 Alison Miln, from the Respondent’s Legal Department, emailed the members of the RIOC subcommittee, saying that Mr Mahon had made a recommendation that the Respondent dismiss the Claimant for misconduct on the grounds of the Last Look issues. She said: “The members will recall that the terms of the DFS November 2015 order required Barclays to “take all steps necessary to terminate” DF’s employment.” (bundle A2, pgs.705 to 706)[131]On 12 September 2016, the sub RIOC committee endorsed the recommendation that the Claimant be dismissed (bundle A2, pgs.710 to 719).[132]On 15 September 2016, Mr Mahon wrote to the Claimant, dismissing him, with notice, for misconduct. He did not uphold allegations 1 or 5 and said that part of allegation 6, relating to the inadequate resolution of a bug which affected stop loss gapping, had been withdrawn. However, he upheld all the other allegations. In relation to allegations 2 and 3 he said that, whilst he agreed that Last Look algorithms are proprietary information and should be kept confidential, the existence of Last Look and its settings and/or changes in the settings were not secret information which must be guarded within trading. He said that it was clear from the Claimant’s numerous emails to colleagues in trading that the Claimant actively encouraged hiding and withholding information, for example in his email of 6 June 2011, 18 July 2011, 10 October 2011, 7 November 2011 and 29 November 2011.[133]Mr Mahon said that, taking into account the Claimant’s evidence, he did accept that there was some interaction with Sales about Last Look, but found that, more commonly, the Claimant proactively encouraged his team to withhold information about Last Look from Sales. He said that that was inappropriate and unwarranted and fostered a distrustful and closed environment in which, on occasions, team members falsely quoted alternative reasons for Last Look rejections. He gave one example of an email sent by a member of the Claimant’s team on 24 June 2011 saying: “If you don’t want to tell him about Last Look we can always tell him there is an IT glitch etc etc.” Mr Mahon said: “This kind of environment is not profession, transparent or collaborative and is not acceptable at Barclays”.[134]With regard to allegation 4 Mr Mahon said that, in a disciplinary hearing as well as from evidence in the disciplinary file, the Claimant consistently expressed a view of clients which was overridingly negative and that the Claimant considered that clients were not to be trusted. Mr Mahon said: “Last Look is used primarily (and legitimately) to protect against trading on stale prices due to latency, and against more ‘toxic’ flow trading behaviour. However, I have found that under your leadership Last Look was applied to a much wider client base than just those with ‘toxic’ order flow, and that there was a lack of clear differentiation between those clients who may have been considered to have more toxic order flow, and those clients whose trade prices may have moved more generally against the firm but in favour of the client.”[135]Mr Mahon said that the Claimant was clear that his remit was to maximise revenue for the firm. Mr Mahon said that this could have been true if there had been a clear process for highly technical clients, who sought to find inefficiencies in the firm’s pricing and take advantage of them, but this was not what had happened in practice. Mr Mahon said the Claimant believed that all clients were suspicious and, therefore, that the Claimant was comfortable with turning up settings for the large majority of clients, in order to maximise the firm’s revenue. Mr Mahon said that this was inappropriate. Mr Mahon said that the protective role of Last Look for the firm against a small number of clients had been lost and that it had been applied too widely and too indiscriminately to ECN clients. He said that, on reviewing Last Look settings in BARX and BATS between 31 March 2012 and 30 September 2012, there had been around 535 clients who had their settings changed and that over 95% of those changes were to increase the hold time or to reduce the maximum loss. Mr Mahon said that those statistics seemed to contradict the Claimant’s view that there was a small number of approximately 50 clients who were the main aggressive high frequency trading clients. Mr Mahon said that the evidence would also support the view, expressed in a number of emails, that traders would adjust settings to maximise profit until the client complained. Mr Mahon said: “The actual impact on profit and loss may be small, but the application of Last Look was wide ranging and indiscriminate, resulting in potentially unfair treatment for some clients and inappropriate management of conflicts of interest.”[136]With regard to allegation 6, Mr Mahon said that, in early 2014, a decision was taken internally to make Last Look symmetrical across BATS and BARX, in order to address the potential inequity with rejection of unprofitable trades. He said that, by 2015, the Claimant had identified that BARX symmetry had not been implemented due to an oversight by the technology team. Mr Mahon said that the error remained outstanding over 10 months later. He said that, as the Head of the business, the Claimant could and should have been more proactive in driving the change forward with technology, given the ongoing risk to the business, rather than leave this to the discretion of technology. Mr Mahon said that the prolonged delay in making the change, “… demonstrated a general lack of respect for clients, and a de-prioritisation of their interests; they continued to potentially be disadvantaged during this prolonged period.”[137]Regarding allegation 7, Mr Mahon said that he had found there to be gaps in the systems and controls of the Claimant’s team. Mr Mahon said that he accepted that some guidelines were available, for example on the Wiki pages. He said that the Claimant had stated that further information was held in various ad hoc emails, but Mr Mahon said there was no central repository for these. Mr Mahon said: “In terms of the Last Look settings per client and any amendments to these, you confirmed that there was nothing stopping a trader from changing a setting to whatever they wanted and neither was there any formal or regular review process in place to consider whether the various client settings were fair and reasonable for individual clients. When asked about the potential opportunity to change settings to inappropriate levels to the detriment of the client, you confirmed that the traders just “wouldn’t do that”. This absence of controls is insufficient and represents unnecessary and ongoing risk to your business.”[138]Mr Mahon said that while the Claimant had estimated that there 2 - 3 changes per week to the settings, but that the evidence that Mr Mahon had reviewed showed 10 times that number. Mr Mahon said that he had found that there were frequent changes, mainly against the interests of the client, across a large range of clients with a culture of profit maximisation. Mr Mahon said: “As a supervisor, you were under an obligation to ensure your business was organised so that it could be effectively controlled, and to ensure these controls and procedures were known to your team and could be adequately evidenced. From the evidence I have reviewed, I do not consider that this happened to the required standard.”[139]Mr Mahon said that Barclays expected its employees to act with the highest standards of ethics and professional conduct at all times. He said that employees were required to be aware of and follow the FCA’s Principles for Business. He said that the obligations to which the Claimant was subject were set out in the relevant versions of the Global Code of Conduct/Statement of Corporate Conduct and Ethics and Global Supervision Policy. He said that Barclays expected the Claimant to act in accordance with his obligations, including by acting in fit and proper manner and with honesty and integrity. He said that the Claimant had fallen below the standards required and that his actions were extremely serious and went directly to the relationship of trust and confidence between the Claimant and the Respondent. Mr Mahon said that the Claimant’s actions were examples of behaviour that was considered gross misconduct in Barclays’ Disciplinary Procedure including: “An act which is discreditable, dishonourable or detrimental to the conduct of Barclays’ business, its employees, customers, clients and counterparts; Breach of the Barclays’ Code of Conduct; Breach of the terms and conditions of an employee’s contract of employment; and A serious breach of or non-compliance with Barclays’ rules, policies and procedures.”[140]Mr Mahon said that he had taken into account the Claimant’s mitigation, including the Claimant’s position in terms of transparency and culture and the fact that the Claimant believed that he was acting in the interest of Barclays at all times. Mr Mahon said he also noted that, whilst he found the systems and controls in place to be inadequate in terms of the effective risk and control of the Claimant’s business, they were not wholly absent. Mr Mahon said that, therefore, he had decided to dismiss the Claimant with notice, rather than without notice (bundle A2, pgs.720 to 727).[141]On 27 September the Claimant notified Ms Bonniface of his intention to appeal against his dismissal. In his grounds of appeal (bundle A2, pgs.740 to 744), the Claimant said that allegations 2 and 3 ignored the large amount of written evidence demonstrating that the Claimant’s senior manager took a stricter view about confidentiality concerning Last Look than the Claimant and that the Claimant had made proactive attempts to educate Sales about Last Look. The Claimant also said that Mr Mahon’s finding that the climate the Claimant had created was not professional, collaborative or acceptable at Barclays was in direct conflict with the firm’s own written policies, which said that the propriety information should be kept on a “need to know” basis within the firm. The Claimant said that he had repeatedly asked for someone to explain to him what was the “need to know” basis for disseminating the information to Sales and clients, but that he had received no answer.[142]With regard to allegation 4, the Claimant said that Mr Mahon’s finding that there was a lack of differentiation between toxic clients and other clients was contradicted by the actual settings used and by the actual reject statistics experienced by clients. The Claimant said that no reasonable person could look at those statistics and conclude that there was a lack of differentiation, either in intention or in effect.[143]The Claimant said that naturally he had a focus on profit, in accordance with the consistently repeatedly defined culture, business incentives and written objectives he experienced within Barclays.[144]With regard to allegation 6, the Claimant said that there was a huge amount of evidence to demonstrate that he had fought to protect and increase the capacity of the overburdened IT teams with whom he worked. He said that, when he had discovered that, due to an accidental oversight by an IT project manager, the work to make BARX symmetrical had not been done, he immediately pressed for this to be corrected.[145]The Claimant’s appeal hearing was held on 3 November 2016 (Bundle A2, pgs.775 to 783). It was chaired by Art Mbanefo. Mr Mbanefo was a member of the Respondent’s RIOC committee.[146]In the appeal hearing, the Claimant said that he would like to have been accompanied by a colleague, but that this had been made impossible because the firm had ordered his colleagues not to speak to him. The Claimant said that he was prepared to proceed with the hearing.[147]In relation to allegations 2 and 3, the Claimant said that the Last Look system was deliberately designed to enforce confidentiality, as settings were kept behind electronic permissions. The Claimant said that he did not set those permissions up and they existed before his arrival at Barclays.[148]Mr Mbanefo asked the Claimant to clarify the process to change settings. The Claimant said that this was covered in his evidence presented at the disciplinary hearing; there were a lot of control processes dictating how to make changes and that the Claimant had introduced a lot of those. The Claimant said that there was email evidence showing that the Claimant had created a specific role for someone whose responsibility was training Sales about Last Look.[149]With regard to allegation 4, the Claimant said that the best place for Mr Mbanefo to see the facts was in a binder that the Claimant had put together for the New York Attorney General, which Mr Mahon had gone through. The Claimant said that it contained a list of US clients and their reject statistics. He described how the reject ratio worked and that the vast majority of rejections came from trading in certain aggressive styles. The Claimant said that the Last Look rejects were produced as a result of the interaction between the client trading style and the rules applied. This produced a certain number of rejects. The Claimant explained that you could not control the client’s trading styles. He said that the reject rates versus settings were highly differentiated. The Claimant said that settings were based on the Channel through which the client connected. He said that certain ECNs (Electronic Trading Networks), on average, produced more toxic flow. He said that the Last Look rules meant that the system automatically calibrated according to the client and would automatically be sharper on clients who were more aggressive. This was inherent in how the algorithm worked.[150]With regard to allegation 6 and the delay in implementing symmetry, the Claimant said that he had asked for the lack of symmetry to be fixed and that he had spoken to Mike Bagguley, his boss’s boss, about the issue.
Relevant law
[151]With regard to allegation 7, the Claimant said that he had been denied access to evidence to prove his points, but that he had overwhelmingly refuted allegation 7. The Claimant said that all of the issues regarding Last Look were in place before the Claimant arrived at the Bank and that the Claimant was sure that they were still in place.[152]On 22 August 2016, the Claimant lodged a grievance against the disciplinary process (bundle A2, pgs.691 to 692). The grievance hearing was also heard on 3 November 2016 by Paul Exal (bundle A2, pgs. 786 to 789).[153]On 17 November 2016 Mr Mbanefo interviewed Mr Mahon regarding the disciplinary process and the Claimant’s appeal (bundle A2, pgs.946 to 953).[154]On 13 December 2016, Mr Mbanefo held a second meeting with Mr Mahon, during which Mr Mahon went through the data that he had requested from Mr Seneviratne (bundle A2, pgs.1022 to 1023).[155]On 8 February 2017, Mr Mbanefo wrote to the Claimant, dismissing his appeal. He said that he was satisfied that the decision-making of the disciplinary hearing manager was reasonable in the circumstances and that he agreed that allegations 2, 3, 4, 6 and 7 should be upheld against the Claimant. Mr Mbanefo said that the instructions that the Claimant gave his team extended far beyond just keeping Code and propriety algorithms confidential. He said: “You maintained that it was absurd to suggest that your instructions were meant to include Last Look in general… but I am unable to agree with this in light of exchanges such as, “…avoid mentioning the existence of the whole BATS Last Look” (your email of 6th June 2011), “Please remember do not discuss BATS LL with Sales at all, they don’t need to know it exists” (your email of 10 October 2011) and “Do not discuss Last Look with Sales” (your email of 7 November 2011).” The instructions in these emails including the use of the words “whole” and “at all” and “exists” clearly purport an intention to keep all details of Last Look away from the radar of Sales colleagues.”[156]With regard to allegation 4, Mr Mbanefo recorded that the Claimant had disagreed that there was a lack of differentiation between certain clients and that the Claimant felt that no reasonable person could look at the statistics and reach this conclusion. Mr Mbanefo said that, in coming to his decision, he noted that the disciplinary hearing manager took a thorough step of requesting comprehensive data related to clients who were Last Looked and analysing a sample of BARX settings and BATS settings across a number of dates. Mr Mbanefo said that, as part of his review, he had considered that data. Mr Mbanefo said that the Claimant had significantly underestimated the number of changes per week to settings. Mr Mbanefo said that, put simply, the Claimant did not pay sufficient attention to try to identify which were the most toxic clients, versus those which were non harmful. Mr Mbanefo said: “In my view, in your pursuit of P&L profit, you lost sight of the overriding requirement to treat customers fairly. It is not necessary to provide a list of exact clients to corroborate this finding; it is implicit in this finding that this culture had the impact of potentially being unfair towards all clients. In coming to this view, I note your email of 12 March 2012: “If a client hasn’t complained consider raising the reject ratio and re-calculating the optimal LL settings… really squeeze them on rejects” and your email of 27 March 2012 where you stated, “I think we just go ahead with it and then gradually tighten the rule until someone complains” and your instruction to add fixed delays to counterparties Last Look hold times in order to make more money from improvements in hold times gained from Project Marlin (your email of 15 March 2012).” Mr Mbanefo said that the Claimant’s conduct reflected, at times, that the Claimant demonstrated an unacceptably negative view of clients.[157]With regard to allegation 6, Mr Mbanefo said that he agreed with the disciplinary hearing manager’s findings that the Claimant did not attribute sufficient importance to the implementation of symmetry of BARX Last Look and that as Head of the team, the Claimant should have been significantly more proactive in driving the change forward, given the ongoing risk to the Claimant’s business.[158]With regard to allegation 7, Mr Mbanefo said: “I am in no doubt that you were aware of your supervisory responsibilities and the key policies and FCA principles which governed your role. As a Supervisor and Managing Director of the firm, your business area should have been organised with effective controls and these should have been adequately evidenced and written down. I am especially concerned in particular that traders were at liberty to change settings in an uncontrolled way and that there was a complete absence of formal and regular reviews to consider whether settings changes were fair and reasonable.” Mr Mbanefo said the Claimant was fully aware of the relevant policies and regulatory obligations and standards which governed his role. Mr Mbanefo said that the Global Supervision Policy required the Claimant as a supervisor to: “.. exercise due skill, care and diligence in managing the business for which [you] were responsible” and to take “reasonable steps to ensure that it was organised so that it could be controlled effectively and that it complied with relevant legal and regulatory requirements and standards.” He said that the Barclays Global Code of Conduct reiterated the requirement to follow the FSA Principles for Business, including, but not limited to Principle 6, “A firm must pay due regard to the interests of clients and treat them fairly”; Principle 7: “A firm must pay due regard to the information needs of its clients and communicate information to them in a way that is clear, fair and not misleading”; and Principle 8: “A firm must manage conflicts of interests fairly, both within itself and its clients and between one client and another.” Mr Mbanefo said that he could not conclude that the Claimant’s conduct met the key required standards and policies in relation to the Claimant’s role. Evidence at the Tribunal[159]During the Employment Tribunal hearing the Claimant drew the Tribunal’s attention to the Respondent’s current document which describes Last Look to clients (bundle A2, pgs.1106 to 1108). The Claimant cross-examined the Respondent’s witnesses in relation to the document. The current document says: “The purpose of Last Look is primarily to protect against trading on stale prices due to latency, and against certain trading behaviour. For instance, activities such as aggregation, order splitting or previous quote selection may result in more rejected trade requests. Therefore, the proportion of trade requests that are rejected due to Last Look will depend in part on the trading behaviour of the client and the platforms and connections through which the client trades. Also, Last Look rejects trade requests whenever the market price moves beyond the price tolerance in place, so other factors such as technical errors, pricing errors, and market moves may also cause trade requests to be rejected by Last Look.”[160]The document set out frequently asked questions and answers to them including: “Do all clients have the same Last Look settings? No. Last Look settings – including the prescribed time delay and the price tolerance – may vary by client, based on each client’s connection type, trading platform, trading pattern, and other factors. Thus, Last Look settings for a single client using multiple connections and trading platforms may differ across those connections and platforms.” “Does Last Look specifically target only certain types of trading behaviours and flow? No. Last Look is agnostic as to the causes of market movements and will reject a trade request whenever the market moves beyond the price tolerance in place during the prescribed time delay.” “Can I trade electronic spot FX with Barclays without Last Look being applied to me? No. Last Look is applied to all electronic spot FX trading. However, the majority of clients are likely to see few, if any, rejects, depending on the way that they trade with us.” In answer to the question: “Can I obtain my specific Last Look settings?” The document also states: “Barclays will share with clients the amount of time delay and the price tolerance that is applied to a client’s trade requests as part of Last Look. Please consult your Barclays sales representatives for information about any rejected trade request.”[161]In evidence to the Tribunal and under cross examination, the Claimant repeated the evidence that he had included in his Defensive Scripts to the disciplinary hearing.[162]The Claimant also told the Tribunal that, when he had spoken in his emails about Last Look being withheld from Sales, he was referring to BATS Last Look. The Claimant said that confidentiality regarding BATS Last Look was very important.[163]The Claimant said that confidentiality was a fundamental principle in the Respondent’s operations and that information should only be shared with other employees on a “need to know” basis. He said that Sales did not “need to know” about BATS Last Look or its functionality. The Claimant drew the Tribunal’s attention to the Bank’s policies on confidentiality and Chinese walls.[164]The Claimant told the Tribunal that, during the DFS investigation, the Respondent’s lawyers had been confident that there was no case against the Bank. He pointed out that no other regulatory body had taken enforcement action against the Bank in relation to Last Look. The Claimant said that he believed that the Bank did not consider that its use of Last Look was wrong, but that it had agreed to the DFS Order because it did not want the DFS Last Look enforcement action preventing the Bank from coming to a settlement with the DFS in a separate, very serious and costly action against the Bank in relation to its FX Spot trading practices.[165]The Claimant told the Tribunal that he will not be able to obtain another job in the FX industry because of the DFS Order agreed by the Bank and his subsequent dismissal by the Respondent. I accepted his evidence that the combination of the DFS Order and his dismissal make it practically impossible for him to obtain alternative employment in FX markets.[166]Pursuant to specific disclosure ordered in the case, the Claimant obtained the spreadsheet which had been attached to the Respondent’s response to the Attorney General of New York Subpoena. He cross-examined both Mr Mbanefo and Mr Mahon about whether they considered that this “factually rich” document was relevant to the allegations against the Claimant. Both responded that it was. They both said that they did not know that the Respondent had refused to provide it to the Claimant in advance of the disciplinary and appeal hearings.[167]The Claimant had analysed data on reject ratios and number of rejects due to Last Look shown in the data on the spreadsheet attached to the Attorney General of New York Subpoena response. The Respondent did not dispute that the Claimant’s calculations were correct. The Claimant attached his analysis to his witness statement in an Appendix, “H”. He said that, of the trade rejects, 51% of rejects were rejects of broker trades; 46% were rejects of Hedge Funds; 3% were bank counterparties and none were either Corporate or Real Money counterparties. The Claimant also set out the reject ratios. That is, the ratio of rejected orders to total orders submitted for each type of client, for each of the years 2010 through to 2015. This showed that, for example, in 2010 Corporate counterparties had a reject ratio of 0.3% and Real Money counterparties had a reject ratio of 0.1%.[168]In 2010, by contrast, Broker counterparties had a reject ratio of 14.8% and Hedge Funds had a reject ratio of 9.9%. In 2013, Brokers had a reject ratio of 18.1% and Hedge Funds 4.8%; whereas Corporate counterparties had a reject ratio of 0.4% and Real Money 0.7%. In 2014, Brokers had a reject ratio of 19.3% and Hedge Funds 4.7%; whereas Corporate clients had a reject ratio of 0.3% and Real Money 0.4%. In 2015, Brokers had a reject ratio of 17.2% and Hedge Funds 5.6%; whereas Corporate clients had a reject ratio of 0.6% and Real Money a reject ratio of 0.6%.[169]Mr Mbanefo was cross-examined about this. He was asked, with regard to the more benign client types like Corporate and Real Money, what had happened to the reject ratios, between 2010 and 2015. Mr Mbanefo replied that there had been no change, in that the reject ratios had stayed below 1%. It was put to Mr Mbanefo that there was no evidence of more benign clients “being squeezed” (to extract more profit from them). Mr Mbanefo said that, had he had the information he now had, he might have made a different decision. He said that the analysis in the Claimant’s witness statement would have helped him.[170]Mr Mbanefo was also cross-examined about the Claimant’s appraisal document, which was in the disciplinary hearing bundle at B2, p.332. In the Claimant’s 2012 year end performance review, the Claimant was given an objective of: “Last Look – should have several mio (million) extra squeezed out asap.” Mr Mbanefo agreed that the Claimant’s manager had signed off those objectives and was aware of the objective of generating several more £ millions out of Last Look.[171]Mr Mbanefo was cross-examined about the Respondent’s current policy directed towards clients. He agreed that the policy was explicit in that Last Look was applied to everyone. Mr Mbanefo said that he did not have that framework when he made his decision and that he was operating with the information he had at the time. He said that the document educated clients.[172]Mr Mbanefo was cross-examined about whether he had found evidence of the Claimant reviewing Last Look rejects. He was directed to pages D1, 75 and D2, 476. He agreed that a year to date overview of Last Look, D1 75, was a periodic review and that D2 475 was evidence of the Claimant reviewing Last Look. Mr Mbanefo was cross-examined about the Claimant setting up a Last Look oversight role in June 2012. He was directed to an email (bundle D1, p.74), wherein the Claimant said to Mr Seneviratne that his ideas for a Last Look oversight role for a trader would be for the role to: “... Ensure new clients get assigned to the correct profiles – should nearly always be the default; Monitor clients on the exceptions list weekly to check they’re close to their reject ratio target. May be able to generate report to simply this. Adjust settings if necessary. Maintain the Wiki for Last Look. Keep the exceptions list up to date. The object being to keep it as short as possible. Keep the principles/explanation page up to date (not written yet). Face off against Sales when they have complaints/requests about rejects. Try and lead the education of sales about Last Look – it’s huge benefits and why we need to be firm…”[173]Mr Mbanefo said that he would want to see evidence that this had actually been done, from, for example, calendar entries showing reviews. He said that, if there was evidence that this did happen and that the manager reviewed the activities, Mr Mbanefo would not have made the same decision and would have changed his outcome about controls. Mr Mbanefo agreed that the Claimant had created tools for reviewing Last Look, including BARX trading reports. Mr Mbanefo agreed that there was evidence of the Claimant setting up a process, which Mr Seneviratne would then supervise. Mr Mbanefo said that he would look for training materials to ascertain that this had actually been done.[174]Mr Mbanefo said that it was his understanding that there were two Last Looks, one in BARX and one in BATS. He said that BARX Last Look was known about by Sales; the BATS Last Look was in dispute and was not known by Sales and was not widely talked about.[175]When asked about what Mr Mahon had said to Mr Mbanefo about Sales knowledge about Last Look, Mr Mbanefo said that he understood that Mr Mahon was talking about BATS Last Look, specifically; that was what made sense to Mr Mbanefo. Mr Mbanefo said repeatedly in his evidence to the Tribunal that the Claimant was fully open about BARX Last Look and that Mr Mbanefo had found only that the Claimant had hidden the existence of BATS Last Look from Sales. He said that the Claimant had discussed the settings in BARX Last Look; but not in BATS Last Look. He said that there was evidence to show that the Claimant had facilitated information being disclosed on BARX Last Look. Mr Mbanefo said that the Claimant had been inconsistent about his disclosures on BARX and BATS and that was what Mr Mbanefo’s decision was based on – the Claimant’s inconsistency in relation to disclosure of BARX Last Look and BATS Last Look. He said that Sales were generally aware of Last Look in BARX and the rationale for Last Look in BARX.[176]Mr Mbanefo was cross-examined about the Bank’s agreements with clients relating to the use of BARX for foreign exchange FX trading. The Bank’s Operational and Security Terms for Electronic Trading stated, at paragraph 2.5, “We are not obliged to act on any Instruction, or to execute or otherwise enter into any particular transaction, and need not give any reasons for declining to do so…” (bundle A3, p.1258). Mr Mbanefo agreed that that contradicted his view that clients should be told the reason for Last Look rejects.[177]Mr Mbanefo was also cross-examined about advice that the Respondent’s Compliance and Legal Departments and external Counsel had given to the Claimant about disclosing symmetry to clients. The Legal Department had advised, in relation to symmetry, that unless implementing symmetry represented a change to the terms and conditions with customers, there was no need from a legal perspective to tell the customers of the changes.[178]The Claimant had passed this on to his manager and to members of the Sales team on 17 September 2014 saying, “Just to confirm that we will be making the e-spot “Last Look” symmetrical from next week. The proposed action has been reviewed by Compliance, Legal and external counsel, as has the decision not to message-out on this under-the-hood change.” (Bundle A3, p.1194). Mr Mbanefo agreed in evidence that the Compliance and Legal Departments had had actively blocked disclosure about an aspect of Last Look which was directly relevant to clients. Mr Mbanefo agreed that, if changing the symmetry of the algorithm was an under-the-hood change, then changing hold times and threshold would also be under-the-hood changes.[179]During both Mr Mbanefo and Mahon’s evidence, they emphasised the fact that Mr Mahon had found that there were over 500 changes in client settings between March and September 2012 and that this represented a number of changes to settings clients which went beyond “exception clients”. They both said that the exception clients were the most toxic.[180]Mr Mahon said that he did not accept that all clients were toxic. He said that he believed that it was possible to differentiate between toxic and non toxic clients and that toxic clients were ones who were overtly setting out to exploit latencies and had the most toxic flows.[181]Mr Mahon and Mr Mbanefo both said that they were concerned about the lack of control in the Claimant’s business and the ability of traders to change settings. Mr Mahon said that simply because, in fact, a client had not been taken advantage of, this did not mean that the Respondent did not need controls to be in place.[182]Mr Mahon was cross-examined about the Claimant’s analysis in his Appendix, showing that there was no increase in the rejects ratio for benign clients over 5 years and, therefore, demonstrating that the Claimant was not “squeezing” those clients in the non toxic group. Mr Mahon replied that he had only seen this analysis in the Claimant’s witness statement. He said that, in his own analysis, there were many changes to the settings in the period and that there appeared to him to be minimal and incomplete control to stop that happening.[183]In his evidence, Mr Mahon said that he understood that in BATS Last Look, there were other traps to protect the firm from other behaviours. He had sympathy that that information should be withheld. Elsewhere in his oral evidence, Mr Mahon again agreed that there were some aspects of BATS which should not be explained to clients. He said, however, that the existence of BATS should be disclosed.[184]Mr Mahon was cross-examined about attitudes to confidentiality on Last Look. It was put to Mr Mahon that there was simply a difference of opinion between the Claimant and Mr Mahon about what was confidential and what was not. It was put to Mr Mahon that the Claimant had simply drawn the line regarding confidentiality, in Mr Mahon’s view, in the wrong place. Mr Mahon’s response was that he had come to his conclusion based on a number of factors, including poor culture towards disclosing information Sales and clients, changing thresholds to make more money, along with a lack of control. He said that all of those had led to his decision to dismiss the Claimant. It was then put to Mr Mahon that, in fact, he had said in his dismissal letter that he would have dismissed the Claimant for each one of the separate allegations (bundle A2, p.726). Mr Mahon conceded that that was what he had said in his letter, and that there was an apparent contradiction.[185]I concluded from this passage of oral evidence that Mr Mahon did concede, in cross-examination, that the Claimant’s attitude to confidentiality regarding Last Look was not, on its own, a matter which ought to have resulted in dismissal. Mr Mahon specifically explained that he had considered the Claimant’s attitude to confidentiality alongside a number of other things when he decided that dismissal was appropriate.[186]Mr Mahon was also cross-examined about the Respondent Legal Department’s advice that the introduction to symmetry to Last Look did not have to be disclosed to clients. He also agreed that, if this was a change which did not have to be disclosed to clients, then changing settings, for example hold times, was similarly required to be withheld from clients. Mr Mahon said that he did not see these emails at the time he made his decision to dismiss.[187]Mr Mahon was cross-examined about the Claimant’s 2012 mid-year performance review, in which the Claimant had said to his manager that, following the manager’s agreement, the Claimant had tightened the Last Look rules for Currenex and Integral clients (ECN clients). Mr Mahon agreed, in cross-examination, that the manager had seen that part of the performance review and did not object to what was said in it.[188]Mr Mahon was cross-examined about emails which the Claimant obtained on specific disclosure, showing that he had made efforts to implement BARX symmetry. For example, an email which the Claimant sent to an IT manager on 4 February 2015, saying, “Subject: Urgent doc request… I need to get hold of the BRD(s) covering the changes to make BARX Last Look symmetric. Could you send them over ASAP?” (bundle A3, p.1148). He was also shown an email from the Claimant to Barclay’s external lawyers saying: “Can I also get a response to my enquiry about correcting the error with BARX Last Look to make it symmetric? (bundle A3, p.1200), as well as an email from the Claimant dated 20 March 2015 to IT saying: “I have obtained written permission from the external lawyers for us to go ahead with correcting the work on symmetric Last Look for BARX. Can you please schedule this work?” (bundle A3, p.1219)[189]Mr Mahon was directed to subsequent emails showing that the Claimant was not included in the email circulation regarding implementation of symmetry, but that his direct report, Mr Seneviratne, had taken responsibility for it. Mr Mahon replied, when shown these emails: “I would like to have seen this email. I think it shows urgency and the Claimant taking responsibility… the email showed the Claimant giving appropriate instructions and acting promptly… I would like to have seen these.”[190]In respect of the Claimant having been excluded from the email chain, Mr Mahon also said: “I would like to have seen these emails.”[191]Mr Mahon was cross-examined about an email from the Claimant to Mr Bagguley, his manager’s manager, asking him to authorise the change to Last Look logic symmetry, in which the Claimant said he would like to close it off as soon as possible (bundle A3, p.1198) Mr Mahon said: “It definitely shows the Claimant is trying to do stuff. I would like to have seen this. He seems to have been left out. I would have liked to have known. It had a bearing on allegation 6.”[192]Mr Mahon was asked in re-examination about the relative seriousness of the allegations he found against the Claimant. He said that he had found it difficult to separate allegations 2, 3, 4 and 7 but that 6 was a discreet issue. He said that allegations 6 bothered him least, as it was a stand alone allegation. He said that his conclusion was round culture; the part of the culture being that controls were weak and transparency poor. I noted that Mr Mahon said that allegation 6 was a discreet issue in re examination and had not suggested this is his witness statement, nor in his letter of dismissal.[193]Mr Mahon produced his Excel spreadsheets, showing the number of changes which had been made to Last Look settings. He explained how he had calculated that there had been 22 changes per week to Last Look settings, which was vastly in excess of what the Claimant had said during the disciplinary hearings. Mr Mahon said that Last Look had been applied too widely and too indiscriminately and that the protective role of Last Look had been lost. He said that Last Look should be used primarily to protect against toxic flow trading behaviour.[194]Mr Mahon and Mr Mbanefo were both adamant in their evidence to the Tribunal that they made their decisions independently of the DFS Order. They both said that, while they were aware of the DFS Order, they had asked for specific assurances from Human Resources that they were free to come to a conclusion which was contrary to the terms of the Order – that is, not to dismiss the Claimant. Both said that they would not have agreed to accept their disciplinary or appeal officer roles unless they had received that assurance. Each of Messrs Mahon and Mr Mbanefo said that they came to their conclusions based on the evidence before them. Mr Mahon said that it was nevertheless relevant to his disciplinary decision that the Claimant’s actions, including his failure to implement proper controls, led to the Bank having to agree to pay a $150 million penalty to the DFS.[195]In their evidence, both Mr Mahon and Mr Mbanefo repeated the conclusions, and justifications for them, set out in their respective outcome letters.[196]Mr Mahon told the Tribunal that the Claimant had created an environment which was not professional, transparent or collaborative. He said that Sales needed to be told information by traders so that Sales would, “ .. know what is happening to the client.” While the Respondent’s Global Supervision Policy, Global Code of Conduct and the Claimant’s contract of employment stated that confidentiality was vital in the business, Mr Mahon said that the Claimant was required to determine where to draw the line on confidentiality in relation to his area of business.[197]The Claimant’s former manager, Mr Cartledge, gave evidence to the Tribunal. He said that he had been responsible for a lot of businesses in Barclays. He said that the number of supervisory systems and policies which the Claimant had implemented in his part of the business were significantly greater than existed in other Barclays’ businesses and across the industry. Mr Cartledge said that not all policies needed to be written down in a central document. He said that lower level policies could be contained on emails, or even be verbal. He said that there would certainly not be a written policy touching every aspect of every role. Mr Cartledge said that Sales people did not need to know about BATS Last Look functionality, but that they did, in fact, know that it existed. Mr Cartledge said that the BATS Last Look functionality could have been part of the BARX controls. If there had just been a new piece of Code in BARX, presenting the BATS Last Look functionality, this would not have been mentioned; it would not have been helpful for Sales to have known about that additional piece of Code.[198]The Claimant presented his claim to the Tribunal on 7 March 2017. The Claimant has not been able to obtain any employment in the financial services sector since his dismissal. Relevant Law[199]By s94 Employment Rights Act 1996, an employee has the right not to be unfairly dismissed by his employer 200. s98 Employment Rights Act 1996 provides it is for the employer to show the reason for a dismissal and that such a reason is a potentially fair reason under s 98(2) ERA. Conduct is a potentially fair reason for dismissal.[201]Cairns LJ said in Abernethy v Mott Hay and Anderson [1974] ICR 323, [1974] IRLR 213,''A reason for the dismissal of an employee is a set of facts known to the employer, or it may be of beliefs held by him, which cause him to dismiss the employee'. 'These words were approved by the House of Lords in W Devis & Sons Ltd v Atkins [1977] AC 931, [1977] 3 All ER 40.[202]If the employer satisfies the Employment Tribunal that the reason for dismissal was a potentially fair reason, then the Employment Tribunal goes on to consider whether the dismissal was in fact fair under s98(4) Employment Rights Act 1996. In doing so, the Employment Tribunal applies a neutral burden of proof.[203]In considering whether a conduct dismissal is fair, the Employment Tribunal is guided by the principles set out in British Home Stores Ltd v Burchell [1978] IRLR 379, affirmed by the Court of Appeal in Post Office v Foley [2000] ICR 1283.[204]Under Burchell the Employment Tribunal must consider whether or not the employer had an honest belief in the guilt of the employee of misconduct at the time of dismissal. Second, the Employment Tribunal considers whether the employer, had in its mind, reasonable grounds upon which to sustain that belief. Third, the Employment Tribunal considers whether the employer, at the stage at which he formed the belief on those grounds, had carried out as much investigation into the matter as was reasonable in all the circumstances of the case.[205]The Employment Tribunal also considers whether the employer’s decision to dismiss was within a range of reasonable responses to the misconduct.[206]In applying each of these tests the Employment Tribunal allows a broad band of reasonable responses to the employer, Iceland Frozen Foods v Jones [1982] IRLR 439.[207]The band of reasonable responses test applies as much to the Respondent’s investigation as it does to the decision to dismiss: Sainsbury’s Supermarkets v Hitt [2003] IRLR 23, LJ Mummery, giving the judgment of the Court, para 30.[208]However, delay can render an otherwise fair dismissal unfair, per Elias LJ in A v B [2003] IRLR 405 at para 66.[209]The gravity of the charges and the seriousness of the consequences of the disciplinary proceedings for the employee will be relevant in considering what is expected of a reasonable investigation, A v B [2003] IRLR 405. In Turner v East Midlands Trains Limited [2013] IRLR 107 at paras 20 – 22, Elias LJ said, “..if the impact of a dismissal for misconduct will damage the employee’s opportunity to take up further employment in the same field, or if the dismissal involves an allegation of immoral or criminal conduct which will harm the reputation of the employee, then a reasonable employer should have regard to the gravity of those consequences when determining the scope and nature of the appropriate investigation….The test applied in A v B and Roldan is still whether a reasonable employer could have acted as the employer did. However, more will be expected of a reasonable employer where the allegations of misconduct, and the consequences for the employee if they are proven, are particularly serious.”[210]It is not for the Employment Tribunal to substitute its own view for that of the employer, but to consider the employer’s decision and whether the employer acted reasonably, Morgan v Electrolux Ltd [1991] IRLR 89, CA; London Ambulance Service NHS Trust v Small [2009] IRLR 563, CA.[211]The ACAS Code of Practice 1: Disciplinary and grievance Procedures (2015) came into effect on 11 March 2015. By s207(2) TULR( C)A 1992, in any proceedings before an Employment Tribunal any Code of Practice issued thereunder by ACAS shall be admissible in evidence and any provision of the Code which appears to the Tribunal to be relevant to any question arising in the proceedings shall be taken into account in determining the question.[212]The ACAS Code of Practice 1, paragraph [19] states that, “where misconduct is confirmed .. it is usual to give he employee a written warning. A further act of misconduct .. would normally result in a final written warning.” Paragraphs [23] and [24] state, “Some acts, termed gross misconduct, are so serious in themselves or have such serious consequences, that they may call for dismissal for a first offence…. Disciplinary rules should give examples of acts which the employer regards as acts of gross misconduct. These may vary according to the nature of the organisation, but might include things such as theft or fraud, physical violence, gross negligence or serious insubordination.”[213]In Ladbroke Racing Limited v Arnott [1983] IRLR 154, Ct Session (Inner House) the Court of Session stated that dismissal for breach of a company rule is not necessarily fair – it still has to be decided whether dismissal was a reasonable response to the particular breach. In Donachie v Allied Suppliers Limited EAT 46/80 the EAT held that it was unreasonable to dismiss an employee for failure to comply with a material term of the contract of which he was unaware and of which he could not reasonably have been aware.[214]In Bishop v Graham Group plc EAT 800/98 the EAT said at paragraphs 23-25 of its judgment, “ for a single act of misconduct to justify dismissal, it must be serious, wilful, and obvious. In elaboration of this analysis, Mr Pritchard referred us to the case of Laws v London Chronicle (Indicator Newspapers) Ltd [1959] 1 WLR 698. In that case, Lord Evershed MR made clear that it was insufficient for the misconduct merely to be grave and serious; it had also to be wilful in the sense that there had to be a deliberate flouting of the essential contractual conditions. In formulating that test, the Master of the Rolls referred to a judgment of Lord James of Hereford in Clouston & Co v Corry [1906] AC 122 where he said this: “Now the sufficiency of the justification depended upon the extent of misconduct. There is no fixed rule of law defining the degree of misconduct which will justify dismissal. Of course there may be misconduct in a servant which will not justify the determination of the contract of service by one of the parties to it against the will of the other. On the other hand, misconduct inconsistent with the fulfilment of the express or implied conditions of service will justify dismissal.” 24 From these authorities we conclude that, to justify dismissal in the present case, the employers must show that Mr Bishop had, by his own deliberate act or acts, struck at the root of his contract of employment so as to call into question its future viability. Such would be the case where his actions undermined the trust and confidence which must exist between himself and his employers. 25 The misconduct must be obvious; it must be such that the employee would plainly recognise it as conduct which would merit summary dismissal if discovered by his employers. Such recognition might be either because the employers had expressly made known to their staff that a particular type of misconduct would be treated as a dismissable offence or because the employee, judging the matter for himself according to the ordinarily accepted standard of morality of the time, would recognise dismissal as a predictable consequence of such misconduct”. Polkey[215]If the Tribunal determines that the dismissal is unfair the Tribunal may go on to consider the percentage chance that the employee would have been fairly dismissed, Polkey v AE Dayton Services Limited [1988] ICR 142.[216]In Gover v Propertycare Limited [2006] ICR 1073, the Court of Appeal held that the Polkey principle does not only apply to cases where the employer has a valid reason for dismissal but has acted unfairly in its mode of reliance on that reason, so that any fair dismissal would have to be for exactly the same reason. Tribunals should consider making a Polkey reduction whenever there is evidence to suggest that the employee might have been fairly dismissed, either when the unfair dismissal actually occurred or at some later date. In making an assessment Tribunals should apply the principles set out in Software 2000 Limited v Andrews [2007] ICR 825. Contributory Fault[217]By s122(2) ERA 1996, where the Tribunal considers that any conduct of the complainant before the dismissal was such that it would be just and equitable to reduce the amount of the basic award to any extent, the Tribunal shall make such a reduction. By s123(6) ERA, where the Tribunal finds that the dismissal was to any extent caused or contributed to by any action of the complainant it shall reduce the amount of the compensatory award by such proportion as it considers just and equitable having regard to that finding. Optikinetics Limited v Whooley [1999] ICR 984: it is obligatory to reduce the compensatory award where there is a finding of contributory fault. The reduction may be 100% - W Devis & Sons Limited v Atkins [1977] ICR 662.[218]In Nelson v BBC (No 2) [1980] ICR 110, the Court of Appeal said that three factors must be satisfied if the tribunal is to find contributory conduct:(a) The relevant action must be culpable and blameworthy(b) It must actually have caused or contributed to the dismissal(c) It must be just and equitable to reduce the award by the proportion specified.[219]It is open to a Tribunal to make deductions both for Polkey and contributory fault. The proper approach of tribunals in these circumstances is first to assess the loss sustained by the employee in accordance with s123(1) ERA 1996, which will include any percentage deduction to reflect the chance that he would have been dismissed in any event. The Tribunal should then make the deduction for contributory fault, Rao v Civil Aviation Authority [1994] ICR 495. However, in deciding the extent of the employee’s contributory conduct and the amount by which it would be just and equitable to reduce the award for that reason under s123(6), the tribunal should bear in mind that it has already made a deduction under s123(1) ERA 1996. Discussion and Decision Reason for Dismissal[220]The Claimant contended that Mr Mahon (and Mr Mbanefo on appeal) dismissed him because of the DFS Order, not because they believed that he was guilty of misconduct.[221]The DFS Order required the Respondent, “to take all steps necessary to terminate…” the Claimant’s employment.[222]Both Messrs Mahon and Mbanefo were members of the RIOC, which had approved the DFS Order.[223]Both were adamant, however, that they came to their decisions on the evidence before them.[224]I was conscious that another senior employee at the Bank appeared to view the Claimant’s dismissal as the inevitable consequence of the DFS Order: On 7 September 2016 Alison Miln, from the Respondent’s Legal Department, emailed the members of the RIOC subcommittee, saying that Mr Mahon had made a recommendation that the Respondent dismiss the Claimant for misconduct on the grounds of the Last Look issues. She said: “The members will recall that the terms of the DFS November 2015 order required Barclays to “take all steps necessary to terminate” DF’s employment.” (bundle A2, pgs.705 to 706).[225]I have found, as set out below, that Mr Mahon’s and Mr Mbanefo’s decisions were procedurally and substantively unfair in a number of regards.[226]I was troubled by the contradictions in Mr Mahon’s and Mr Mbanefo’s evidence. It seemed to me that, at times, they were trying to advance justifications for their decisions which had not been in their minds at the time.[227]The extent of the unfairness of the disciplinary proceedings and the contradictions in the evidence could have indicated that Mr Mahon and Mr Mbanefo did not take care to make their own, fair decisions, rather than seeking ways to follow the DFS Order. However, I noted that Mr Mahon and Mr Mbanefo were not responsible for the Respondent’s failure to give the Claimant numerous relevant documents during the disciplinary process. Their colleagues in Human Resources appear to have made those decisions.[228]Mr Mahon conducted 3 disciplinary hearings, during which he asked the Claimant about the allegations. His contemporaneous email to Human Resources on 23 March 2016 (Bundle A1, 478), suggested that he had listened to the Claimant’s arguments and was open to persuasion on them. Mr Mahon interviewed other relevant individuals, Messrs Seneviratne and Robertson and sought data about Last Look settings from Mr Seneviratne. At that stage, Mr Mahon did not know what the data would show – it could have corroborated the Claimant’s account.[229]Both Mr Mahon and Mr Mbanefo gave detailed reasons for their decisions in their outcome letters. They referred to relevant evidence to support their conclusions.[230]While I had some reservations, I accepted Mr Mahon and Mr Mbanefo’s evidence, on the balance of probabilities, that they made their own decisions on the evidence available to them at the time. I accepted that they believed that the Claimant was guilty of the misconduct described in their outcome letters.[231]The Respondent therefore showed that it dismissed the Claimant for the potentially fair reason of misconduct. Reasonable Evidence and Reasonable Investigation Allegations 2 and 3[232]Regarding allegations 2 and 3, Mr Mahon decided that the Claimant “encouraged and directed (his) team to intentionally withhold information about Last Look from Sales” and that “this position fostered a distrustful and “closed” environment” which was “not professional, transparent, or collaborative" and was not acceptable at Barclay’s.[233]I found Messrs Mahon and Mbanefo’s evidence regarding their conclusions on allegations 2 and 3, and their justifications for their conclusions, both opaque and contradictory.[234]Mr Mbanefo told the Tribunal repeatedly that the Claimant was fully open about BARX Last Look and that Mr Mbanefo had found only that the Claimant had hidden the existence of BATS Last Look from Sales. He said that there was evidence to show that the Claimant had facilitated information being disclosed on BARX Last Look. Mr Mbanefo also said that he had understood, from what Mr Mahon told him, that Mr Mahon’s conclusions and criticisms of the Claimant related only to the Claimant’s secrecy around BATS Last Look.[235]Mr Mbanefo therefore accepted, in evidence, the Claimant’s contention that the Claimant had insisted, in his emails, on confidentiality regarding BATS Last Look only.[236]Mr Mbanefo said that Mr Mbanefo’s criticism of the Claimant was that the Claimant had been inconsistent in his treatment of confidentiality between BARX and BATS Last Look.[237]By contrast, Mr Mahon did not draw a distinction between the Claimant’s treatment of BARX and BATS Last Look, during his oral evidence. However, he accepted, in oral evidence, that confidentiality was indeed required regarding parts of the BATS Last Look functionality. He did not criticise the Claimant for lack of consistency.[238]It was somewhat unclear what Mr Mahon had actually decided regarding allegations 2 and 3. Mr Mbanefo said that he had understood, from talking to Mr Mahon, that Mr Mahon concluded that the Claimant’s inappropriate secrecy related only to BATS. Mr Mahon suggested that he had upheld allegations 2 and 3 in relation to both BARX and BATS, but Mr Mahon acknowledged the Claimant had been correct to maintain confidentiality about parts of the BATS Last Look functionality.[239]Nevertheless, it was clear that, insofar as Mr Mahon found that the Claimant had “encouraged and directed (his) team to intentionally withhold information” and “fostered a distrustful and “closed,” in relation to BARX, Mr Mbanefo wholly disagreed with that conclusion, when he looked at the evidence. Mr Mbanefo was emphatic that the Claimant had been fully open about BARX Last Look.[240]If Mr Mahon did uphold allegations 2 and 3 against the Claimant in relation to BARX Last Look, I agreed with Mr Mbanefo that the available evidence did not support such a conclusion. I decided that Mr Mahon did not have reasonable grounds for such a decision and that the conclusion was unfair. There was a very large body of email evidence showing the Claimant giving information to, and seeking to educate Sales about, Last Look. The Claimant had introduced reports, which the Sales team could view, showing Last Look statistics. He had sought to introduce a role which included training Sales regarding Last Look. Of all the emails the Claimant sent during his employment, there were a few in which he instructed withholding information about Last Look from Sales. Almost all (of these few emails) specified “BATS” Last Look, in particular. Put simply, there was very little evidence of the Claimant withholding information about BARX Last Look and, by contrast, extensive evidence showing him disclosing it.[241]I reminded myself that I must not substitute my view for that of the employer, but must consider only whether Mr Mahon’s decision was within the range of reasonable responses. I noted, however, that the Respondent’s own witness, Mr Mbanefo, was adamant that the evidence showed the Claimant being fully open about BARX Last Look.[242]I decided that Mr Mbanefo did not correct the unfairness on appeal – he upheld Mr Mahon’s findings and drew no distinction between BARX and BATS confidentiality at the time.[243]I therefore decided that Mr Mahon acted unfairly if he upheld the allegation in relation to BARX Last Look.[244]In relation to BATS LL, Mr Mahon accepted in his oral evidence that confidentiality was indeed required regarding parts of the BATS Last Look functionality. This was not reflected in his dismissal letter. On his oral evidence, I concluded that Mr Mahon only partly upheld allegations 2 and 3 in relation to BATS Last Look.[245]When it was put to Mr Mahon in cross examination that the Claimant had simply drawn the line in the wrong place regarding confidentiality – and that that was not a dismissable offence – Mr Mahon said that he had relied, not just allegations 2 and 3 confidentiality/withholding information, but on the other allegations, in deciding to dismiss. He accepted that this evidence was different to what he had said in his dismissal letter. In his dismissal letter, Mr Mahon had said that each of the allegations which he had upheld against the Claimant, on their own, amounted to gross misconduct and would have justified dismissal.[246]I accepted Mr Mahon’s evidence at the Employment Tribunal that he did not dismiss the Claimant solely relying on allegations 2 and 3. I decided that it was likely that he was being truthful in his oral evidence, because he conceded that a degree of confidentiality was required. He appeared to acknowledge the Claimant’s argument that mistakenly identifying where to draw the line on confidentiality, when confidentiality is vitally important for many of the Bank’s operations, was not a dismissable offence.[247]In relation to allegation 4, Mr Mahon found that Last Look was applied to a much wider client base than just those with toxic flow trading behaviour and that the lack of differentiation between clients seemed to “stem from a lack of general respect for clients as a whole.” He said that the Claimant’s predominant focus had been on profit, turning up settings until clients complained. Mr Mahon said that the Last Look settings in BATS and BARX had been changed for 535 clients between 31 March 2012 and 30 September 2012, which contradicted the Claimant’s view that there were 50 clients who were the main aggressive trading clients. He said that Last Look had been applied in a wide ranging and indiscriminate way.[248]Throughout the Claimant’s interviews, and in his Defensive Script, the Claimant said that the figures showed that Last Look was a highly discriminating tool and that it was the main aggressive clients who had trades rejected by Last Look, not the more benign client types. He said that the relevant figures were contained in a spreadsheet attached to the Respondent’s Subpoena Response to the Attorney General of New York.[249]On 2 December 2015 the Claimant had asked the Respondent to disclose the Subpoena Response document to him, in preparation for the disciplinary hearing. The Respondent declined to do so, citing privilege.[250]Mr Mahon looked at the Subpoena Response spreadsheet, but Mr Mbanefo did not. The Respondent did not provide him with it.[251]Mr Mbanefo and Mr Mahon were asked, in cross examination, whether they considered that this “factually rich” document was relevant to the allegations against the Claimant. Both responded that it was. They both said that they did not know that the Respondent had refused to provide it to the Claimant in advance of the disciplinary and appeal hearing.[252]I decided that the Respondent acted unreasonably in not providing a document which Mr Mahon had seen, and the Claimant relied on, to Mr Mbanefo on appeal. In my view, this made the appeal unfair.[253]Futhermore, I decided that the Respondent did not provide the Claimant with the document, which contained relevant evidence. In so failing, the Respondent acted outside the broad band of reasonable responses of a reasonable employer.[254]I accepted the Respondent’s argument that the Claimant asked for a very large number of documents and that the Respondent was only required to conduct a reasonable investigation, so that it was reasonable for it not to disclose some relevant documents, if to do so would have been unduly onerous.[255]However, this was a case in which the Claimant’s ability to work in FX again was likely to be imperilled by a dismissal. The Subpoena Response was a specific document which was readily available – it did not require a lengthy and expensive search of the Respondent’s IT systems. A member of the Respondent’s Legal Department in New York was able to send Mr Mahon the spreadsheet attached to the Subpoena response on 23 March 2016, when Mr Mahon asked for it. I concluded that the standard of reasonableness in such a case required the Respondent to give the Claimant documents which were easily identifiable and directly relevant to the Claimant’s defence. It was not sufficient for Mr Mahon to look at the spreadsheet himself; fairness required that the Claimant be allowed to present his own arguments and analysis of a document which was relevant to the allegations against him.[256]The importance of the Claimant being able to analyse and explain the spreadsheet was illustrated by the evidence in the Employment Tribunal. Having obtained the Subpoena document on specific disclosure in the Tribunal proceedings, the Claimant analysed the data on reject ratios and number of rejects and attached his analysis to his witness statement. He cross-examined Mr Mbanefo about the data. Mr Mbanefo confirmed that the Last Look reject ratios for more benign client types, like Corporate and Real Money, had stayed below 1% between 2010 and 2015. It was put to Mr Mbanefo that there was no evidence of the more benign clients “being squeezed” (to extract more profit from them). Mr Mbanefo said that, had he had the information he now had, he might have made a different decision. He said that the analysis in the Claimant’s witness statement would have helped him.[257]Mr Mbanefo therefore appeared to accept that the Claimant’s analysis of the AGNY Subpoena Response contradicted a finding that Last Look had been applied widely and indiscriminately, or that benign clients were “squeezed” to extract more money from them.[258]Mr Mbanefo’s answers confirmed the central importance of the AGNY Subpoena Response document to the Claimant’s ability to answer the allegations against him. Failing to disclose it to him, when he asked for it, was fundamentally unfair.[259]Mr Mahon decided that the Claimant could and should have been more proactive in driving forward symmetry in BARX after he discovered that it had not been implemented “given the ongoing risk to your business”. Mr Mahon said, “.. the prolonged delayed in making the change demonstrated a general lack of respect for clients and a de-prioritisation of their interests..”.[260]On 2 December 2015 the Claimant asked Human Resources for, “All documents and emails/BRDs sent or received by Nick Wells, Daron Bowes and Nick Shires concerning the request to make BARX LL symmetric and to make the Stop Loss gapping logic fully symmetric. All mention of this request and its remediation. The transcript of the interviews with the above personnel regarding how the error occurred and whose enquiry brought it to light and what involvement [the Claimant] had in directing that it should be remedied…”; his request was refused.[261]The Claimant obtained an order for specific disclosure of precisely these documents, as well as “any documents evidencing the date when the change went live. Any communication with Ed Falinski concerning this piece of work from the date he took over running the eFICC business until it went live into production.”[262]The Claimant’s other 2 December 2015 requests for documents were wide ranging and likely to include 10,000s of documents. The Respondent contended that, in that context, it was reasonable for the Respondent not to disclose the documents the Claimant requested regarding remediation of BARX symmetry.[263]At the Tribunal, the Respondent contended that the documents disclosed pursuant to the specific disclosure order were not necessarily the same as the documents the Claimant asked for on 2 December 2015. I rejected that argument. The terms of the Claimant’s 2 December 2015 request and the terms of the specific disclosure order were very similar. I considered that, if the Respondent had conducted the search that the Claimant requested in December 2015, it is likely that they would have revealed the documents which were available at the Employment Tribunal.[264]I decided that the Respondent acted unreasonably in failing to disclose the documents the Claimant requested. The Respondent was alleging that the Claimant failed to take remedial action to implement BARX symmetry. Conducting a search for emails mentioning symmetry was fundamentally required in order to establish what action the Claimant took. This request covered a discreet topic. It was not an onerous request like some of the Claimant’s other requests for all emails covering day to day matters in the business.[265]Mr Mahon was cross-examined about the emails which the Claimant obtained on specific disclosure, showing that the Claimant had made efforts to implement BARX symmetry, for example, emails of 4 February 2015, 20 March 2015. Mr Mahon was directed to subsequent emails showing that the Claimant was not included in the email circulation regarding implementation of symmetry, but that his direct report, Mr Seneviratne, had taken responsibility for it. Mr Mahon replied, when shown these emails: “I would like to have seen this email. I think it shows urgency and the Claimant taking responsibility… the email showed the Claimant giving appropriate instructions and acting promptly… I would like to have seen these.”[266]In respect of the Claimant having been excluded from the email chain, Mr Mahon also said: “I would like to have seen these emails.”[267]Mr Mahon was cross-examined about an email from the Claimant to Mr Bagguley, his manager’s manager, asking him to authorise the change to Last Look logic symmetry, in which the Claimant said he would like to close it off as soon as possible (bundle A3, p.1198) Mr Mahon said: “It definitely shows the Claimant is trying to do stuff. I would like to have seen this. He seems to have been left out. I would have liked to have known. It had a bearing on allegation 6.”[268]It was quite clear to me that Mr Mahon accepted that the email evidence contradicted and undermined Mr Mahon’s decision on allegation 6.[269]I inferred from Mr Mahon’s evidence that, if he had seen the emails at the time, he would not have upheld allegation 6 against the Claimant.[270]Mr Mahon found that there were “gaps in the systems and controls” of the Claimant’s team. He said that, when he asked the Claimant about what controls were in place, the Claimant’s answers were sometimes confusing and contradictory. He found that there was no regular or formal review process to ensure that client settings were fair and reasonable, which represented an ongoing risk to the business.[271]At the time of the disciplinary hearings, the Claimant had been suspended since 13 August 2015. The Claimant had asked for the Respondent to give him “The documentation describing the policy on Written Supervisory Procedures” when the policy went live and how it was notified to the Claimant; “All WSPs in the FX and eFICC businesses” and the date when they were formally signed off; … “All the contents of the eFICC team wiki referencing in any way practices, policies, procedures etc. and the date of any changes”.[272]It was not until 10 August 2016 that Ms Bonniface sent the Claimant the “Last Look support document for BATS: LL Rule Optimisation.” The Claimant was not provided with all documents concerning Last Look stored centrally on the Claimant’s team intranet site (the wiki). He obtained these on his application for specific disclosure in the Tribunal proceedings (bundle A3, p.1287-1332). These documents included a BATS Last Look Support Document, which the Claimant told the Tribunal he had been responsible for creating. The Last Look Support Document set out 10 principles to be applied in determining Last Look settings.[273]Once more, I considered that the Respondent failed to disclose relevant documents to the Claimant, which he had specifically requested. Once more, I considered that the Claimant’s request on this regard was relevant and reasonable and not unduly onerous. I took into account the serious consequences for the Claimant’s future employability if the Claimant was dismissed when I determined the requirements of a reasonable investigation.[274]It appeared from the evidence that Mr Mahon criticised the clarity of the Claimant’s answers regarding controls, when the Claimant had not had access to relevant documents and when the Claimant had been out of the business, suspended, for at least 7 months.[275]Delay in disciplinary proceedings does not, of itself, render a disciplinary procedure unfair. Nevertheless, I considered that it was unfair of Mr Mahon to criticise the clarity of the Claimant’s answers when the Claimant had not been given relevant documents, which could have helped him provide clarity, and when the Claimant could not reasonably have been expected have an accurate memory of relevant documents after a 7 month suspension.[276]I concluded that the Respondent did not conduct a reasonable investigation in relation to allegations 4, 6 and 7. Further, it did not have reasonable evidence to support a conclusion that the Claimant had been guilty of allegations 2 and 3 in relation to BARX Last Look. The unfairness went to the heart of the Claimant’s ability to defend the allegations and to the reasonableness of the evidence the Respondent had before it made the decision to dismiss. I considered that, given the extent of the unfairness, the dismissal was clearly procedurally unfair.[277]The Claimant contended that he effectively had been denied the right to be accompanied at the disciplinary and appeal hearing because the terms of his suspension prevented him from contacting colleagues. I decided that the Claimant could have contacted Human Resources to ask them to arrange for a named colleague to accompany the Claimant at the hearings. I concluded that the Respondent’s action in this regard was not unfair. The Claimant indicated to both the disciplinary and appeal hearings that he would proceed in the absence of a workplace colleague. Decision to Dismiss[278]I also decided that the decision to dismiss was substantively unfair.[279]The additional email evidence fundamentally undermined Mr Mahon’s conclusion that allegation 6 should be upheld. As Mr Mahon conceded that, the new evidence demonstrated that the Claimant was giving appropriate instructions and acting promptly to ensure that BARX symmetry was implemented, rather than failing to be proactive.[280]Allegation 6 was not supportable on the evidence. Relationship between Allegation 6 and other Allegations[281]Mr Mahon was asked, in re-examination, about the relative seriousness of the allegations he found against the Claimant. He said that he had found it difficult to separate allegations 2, 3, 4 and 7, but that allegation 6 bothered him least, as it was a stand alone allegation.[282]I did not accept Mr Mahon’s evidence on this. I noted that Mr Mahon said that allegation 6 was a discreet issue in re examination and had not suggested this is his witness statement, or in his letter of dismissal.[283]Moreover, Mr Mahon’s evidence was inconsistent with his letter of dismissal, in which he said, regarding allegation 6, “.. the prolonged delayed in making the change demonstrated a general lack of respect for clients and a de-prioritisation of their interests.” “Lack of respect for clients” was a formula which Mr Mahon used to describe his findings in relation to allegation 4. He also said, in relation to allegation 7, that he found that the Claimant held counterparts “in low regard.”[284]The true evidence, in relation to allegation 6, was that the Claimant acted proactively, in the interests of clients. It was therefore also relevant to, and undermining of, Mr Mahon’s findings on allegations 4 and 7. Allegations 2 and 3[285]Mr Mahon said that he had relied, not just allegations 2 and 3 confidentiality/withholding information, but on the other allegations, in deciding to dismiss. Mr Mahon appeared to acknowledge that mistakenly identifying where to draw the line on confidentiality, when confidentiality is vitally important for many of the Bank’s operations, was not a dismissable offence.[286]Furthermore. in evidence, Mr Mbanefo acknowledged that the Respondent’s Compliance and Legal Departments had actively blocked disclosure about an aspect of Last Look which was directly relevant to clients. Mr Mbanefo agreed that, if changing the symmetry of the algorithm was an under-the-hood change, then changing hold times and threshold would also be under-the-hood changes. That corroborated the conclusion that dismissal would not be appropriate for allegations 2 and 3 alone.[287]In relation to allegation 4, the case law indicates that dismissal is appropriate for a first offence where the misconduct is “obvious”; “it must be such that the employee would plainly recognise it as conduct which would merit summary dismissal if discovered by his employers. Such recognition might be either because the employers had expressly made known to their staff that a particular type of misconduct would be treated as a dismissable offence or because the employee, judging the matter for himself according to the ordinarily accepted standard of morality of the time, would recognise dismissal as a predictable consequence of such misconduct”.[288]At the time of the disciplinary and appeal hearings, Mr Mbanefo and Mr Mahon had sight of the Claimant’s 2012 end of year performance review, which was in the disciplinary hearing bundle at B2, p.332. In it, the Claimant was given an objective of: “Last Look – should have several mio (million) extra squeezed out asap.” Mr Mbanefo agreed that the Claimant’s manager had signed off those objectives and was aware of the objective of generating several more £ millions out of Last Look.[289]Furthermore, Messrs Mahon and Mbanefo saw the Claimant’s email of 15 March 2011 to Mike Bagguley, in which the Claimant said of Project Marlin, “From a revenue perspective the main effects will be: 1. Longer last look times will enable us to make more money with the same number of trade rejects and the same trade confirm times...”. It is of note that the Claimant did not specify that only “aggressive” or “toxic” clients would be treated in this way. There was no evidence before Messrs Mahon and Mbanefo that Mr Bagguley had disagreed with the Claimant’s proposal.[290]The Claimant pointed out, in his defensive script, that both these documents showed that senior managers were aware of the Claimant proposing that the Respondent “make more money” from Last Look. Moreover, the Claimant’s performance review actually gave him the objective of doing so.[291]On the evidence available to the dismissing and appeal officer, the Claimant’s manager and “grandfather” manager knew and approved of the Claimant using Last Look to generate additional revenue from clients. Mr Mbanefo and Mr Mahon chose not to interview either Mr Cartledge or Mr Bagguley. They therefore did not obtain any evidence to contradict the plain words of the documents to which Mr Cartledge and Mr Bagguley were party.[292]That being so, I considered that it was outside the band of reasonable responses for the Respondent to dismiss the Claimant for such actions. His managers had not indicated that generating extra profit from Last Look constituted misconduct, never mind being a dismissable offence. Further, in light of the managers’ attitudes, the Claimant, judging the matter for himself according to the ordinarily accepted standard of morality of the time, could not have recognised dismissal as a predictable consequence.[293]The Respondent relied on the very broad wording of its Policies and Disciplinary Procedure in contending that the Claimant had breached appropriate standards and should thus have been dismissed. However, Mr Mahon said that, given the broad wording of the Policy documents, it was incumbent on the Claimant to judge their particular application to his area of business. I considered that it was unreasonable for the Respondent to decide that the Claimant had misjudged the requirements of fairness towards clients when his senior managers were aware of his intention to generate more money from clients using Last Look.[294]In any event, in relation to allegation 4, Mr Mbanefo conceded that the Claimant’s analysis of the AGNY Subpoena spreadsheet would have informed Mr Mbanefo’s decision better, in that it showed that more benign client types were not, in fact, being targeted for Last Look rejects.[295]In relation to allegation 7, both Messrs Mahon and Mbanefo heavily criticised the Claimant for failing to have measures in place for reviewing Last Look settings to ensure that they were fair for all clients.[296]As Mr Mahon himself said, allegations 2, 3, 4 and 7 were interlinked. He conceded that the Claimant had introduced some systems of control.[297]I concluded that the Claimant’s AGNY Subpoena analysis was also clearly relevant to the question of whether the business was adequately controlled. If aggressive client types were being targeted and benign clients were not, that would be relevant to a decision on whether the Claimant had avoided, “ action/inaction which might have the potential to incur reputational risk for the Bank [B2/470] Global Conduct Policy; or whether he had taken, “all reasonable steps to establish a strong culture of compliance in his business area [B2/383] Global Supervision Policy.[298]It was not possible for the Respondent to make a reasonable decision on allegation 7 when such centrally relevant evidence had been withheld from the Claimant and from Mr Mbanefo.[299]Furthermore, Mr Mbanefo was cross-examined about whether he had found evidence of the Claimant reviewing Last Look rejects. He was directed to pages D1, 75 and D2, 476. He agreed that a year to date overview of Last Look, D1 75, was a periodic review and that D2 475 was evidence of the Claimant reviewing Last Look. Mr Mbanefo was cross-examined about the Claimant setting up a Last Look oversight role in June 2012. He was directed to an email (bundle D1, p.74), wherein the Claimant said to Mr Seneviratne that his ideas for a Last Look oversight role for a trader. Mr Mbanefo said that, if there was evidence that this did happen and that the manager reviewed the activities, Mr Mbanefo would not have made the same decision and would have changed his outcome about controls. Mr Mbanefo agreed that the Claimant had created tools for reviewing Last Look, including BARX trading reports. Mr Mbanefo agreed that there was evidence of the Claimant setting up a process, which Mr Seneviratne would then supervise. Mr Mbanefo said, however, that he would have looked to ascertain whether this had actually been done.[300]I concluded that Mr Mbanefo conceded that the evidence which was available during the disciplinary process showed that the Claimant had set up a system of control and review for Last Look, which Mr Seneviratne would supervise. Mr Mbanefo conceded that, if what the Claimant had set up had actually happened, Mr Mbanefo would have changed his decision on allegation 7. I considered that it was outside the band of reasonable responses, however, for Mr Mbanefo find that the Claimant was primarily responsible – and therefore dismissable - for any subsequent failure to implement the system of control. Mr Mbanefo had agreed that Mr Seneviratne was responsible for supervising the process after the Claimant set it up.[301]I concluded that there was substantive unfairness in the Respondent’s decision on each one of the allegations. I decided that, even taking all the allegations together, the Respondent’s decision to dismiss the Claimant was outside the range of reasonable responses.[302]The Respondent dismissed the Claimant unfairly. Polkey[303]In light of my findings on substantive unfairness on all the allegations, I concluded that the Respondent could not have dismissed the Claimant fairly, whatever fair procedure had been undertaken. Contributory Fault Allegations 2 & 3[304]I preferred the Claimant’s evidence to Messrs Mahon and Mbanefo regarding the Respondent’s need for confidentiality regarding Last Look. I decided that the available evidence showed that the Bank’s Legal and Compliance Departments insisted on confidentiality regarding Last Look, particularly in respect of clients.[305]The Bank’s Operational and Security Terms for Electronic Trading states, at paragraph 2.5, “We are not obliged to act on any Instruction, or to execute or otherwise enter into any particular transaction, and need not give any reasons for declining to do so…” (bundle A3, p.1258).[306]The Bank’s standard terms, not drafted by the Claimant, therefore told clients that the Bank was entitled to refuse a trade without telling clients why. The standard terms did not require any openness about the operation of Last Look.[307]The Respondent’s Compliance and Legal Departments had also actively blocked disclosure about an aspect of Last Look which was directly relevant to clients. Mr Mbanefo agreed that, if changing the symmetry of the algorithm was an under-thehood change, then changing hold times and threshold would also be under-the-hood changes.[308]All this corroborated the Claimant’s evidence that confidentiality was a fundamental principle in the Respondent’s operations and that Last Look information should only be shared with other employees on a “need to know” basis. These principles are set out in the Respondent’s Global Supervision Policy Bundle B2 P401: “Need to know policy. This policy requires that information held by a representative of the firm should only be disclosed where there is a legitimate need to know’; P401: ‘As a supervisor you should frequently remind your team of the following guidelines with respect to handling confidential information. Avoid discussing confidential matters…’; P423: ‘Information Barriers …… electronic separation to ensure that electronically stored material should not be accessible by personnel without a legitimate need to access such information’.[309]Mr Cartledge also corroborated the Claimant’s evidence. He said that the BATS Last Look functionality could have been part of the BARX controls. If there had just been a new piece of Code in BARX, presenting the BATS Last Look functionality, this would not have been mentioned; it would not have been helpful for Sales to have known about that additional piece of Code. Mr Cartledge said that Sales people did not “need to know” about BATS Last Look functionality.[310]I preferred Mr Cartledge’s evidence on this matter to Mr Mahon and Mr Mbanefo’s. It seemed to me that Mr Cartledge was a more independent and objective witness. He still works in the FX industry and he appeared not to bear any animosity towards his former employer.[311]I also noted that the Respondent’s recommendation that the Claimant be referred to disciplinary proceedings said, of the Claimant’s actions: “42. ….(a) The number of ‘problematic’ communications is relatively small when balanced with the overall population of communications reviewed by the investigation;(b) There are many examples of open and transparent communications with BARX users about rejects and Last Look, as well as examples of clients negotiating or seeking to negotiate their Last Look settings – suggesting a high degree of awareness amongst customers of Last Look and its relevance to their order flow; and(c) Sales were generally aware of Last Look;(d) Last Look has been commonly understood in the market for many years and market participants were well aware that Barclays, and other banks, had a discretion to reject trade requests, and reject requests using Last Look;(e) The clients affected by rejections were overwhelmingly the most sophisticated BARX counterparties and, therefore, the group most likely to take advantage of any information about Barclays’ Last Look settings to the detriment of Barclays (and BARX pricing). With that in mind, it may have been appropriate to withhold information in order to maintain the integrity of Last Look as a legitimate defensive tool for Barclays.[312]On all the evidence, I concluded that the Claimant was not guilty of culpable and blameworthy conduct in relation to allegations 2 and 3.[313]It seemed to me that the Respondent continues to operate many of the practices in relation to Last Look for which the Claimant was criticised. It does not target only “toxic” trading behaviours. Its current document, which describes Last Look to clients (bundle A2, pgs.1106 to 1108), states, “Does Last Look specifically target only certain types of trading behaviours and flow? No. Last Look is agnostic as to the causes of market movements and will reject a trade request whenever the market moves beyond the price tolerance in place during the prescribed time delay.” “Can I trade electronic spot FX with Barclays without Last Look being applied to me? No. Last Look is applied to all electronic spot FX trading. However, the majority of clients are likely to see few, if any, rejects, depending on the way that they trade with us.”[314]Mr Mahon and Mr Mbanefo criticised the Claimant for applying Last Look indiscriminately, to more benign client types, yet the Respondent continues to apply Last Look to all (non GUI) clients.[315]I concluded that the Claimant was not guilty of culpable and blameworthy conduct when he applied Last Look to all clients and did not distinguish between “toxic” and “benign” client types. Seeing that Messrs Bagguley and Cartledge approved him increasing Last Look hold times and generating more income from Last Look, the Claimant was not guilty of guilty of culpable and blameworthy conduct in this regard either.[316]I also preferred Mr Cartledge’s evidence about the standards of control in the Claimant’s business. Mr Cartledge said that he had been responsible for a lot of businesses in Barclays, and that the number of supervisory systems and policies which the Claimant had implemented in his part of the business were significantly greater than existed in other Barclay’s businesses and across the industry. He said that not all policies needed to be written down in a central document and that lower level policies could be contained in emails, or even be verbal. He said that there would certainly not be a written policy touching every aspect of every role.[317]I again noted the Respondent’s recommendation that the Claimant be referred to disciplinary proceedings, which said, of the Claimant’s actions: “43. In addition, there is evidence to suggest that Mr. Fotheringhame was aware of Barclays supervisory expectations, as detailed in the GSP, and that he spent a considerable amount of time monitoring Last Look data and directing his team to ensure settings were appropriate for clients.”[318]I concluded that the Claimant had instituted numerous checks and controls regarding Last Look and that his standards of control were comparatively high.[319]However, Mr Mahon did establish that the Claimant’s knowledge of the number of Last Look settings changes made each week was significantly erroneous. That indicated that the Claimant did not have accurate oversight of the way Last Look settings were being used and changed by his employees. While the Claimant had introduced numerous Last Look policies, it did not appear that the Claimant ensured that these were being followed without exception.[320]On the evidence, Mr Seneviratne had taken control of the Last Look oversight role. However, the Claimant was ultimately responsible for the business.[321]The Respondent did not produce evidence to show that any clients had actually been unfairly treated as a result of the Claimant’s lack of oversight. Nevertheless, in light of the $150 million penalty, and the Claimant’s seniority in the bank, I accepted that the Claimant was, to a limited extent, responsible for failing to protect the Respondent from serious risks associated with the Respondent’s use of Last Look. I decided that the Claimant’s failures were culpable and blameworthy because of the level of risk, in the form of regulatory sanctions, posed by failures to control the business. They clearly did contribute to his dismissal – Messrs Mahon and Mbanefo referred to them in their outcome letters.[322]I considered that it was appropriate to reduce the Claimant’s basic and compensatory awards by 20% for this less extensive failing, in respect of one allegation only. I did not consider that there were grounds, in this case, for a different reduction being applied to the basic, rather than compensatory, award.[323]I decided that the Claimant had not undertaken any other action which was culpable and blameworthy. REMEDY JUDGMENT The judgment of the Employment Tribunal is that:-(1) The Tribunal does not make an order for reinstatement because it is not practicable for the Respondent to comply with such an order and it would not be just to order reinstatement when the complainant caused or contributed to some extent to his dismissal.(2) The Tribunal orders the Respondent to re-engage the Claimant into the role of Director Data Commercialisation because the Claimant wishes to be re-engaged by the Respondent, it is practicable for the Respondent to comply with this order for re-engagement and it is just to order his re-engagement to this role.(3) The terms on which re-engagement is to take place are as follows:- (i) The Respondent shall be the Claimant’s employer; (ii) The Claimant’s job title will be Director Data Commercialisation; (iii) The Claimant’s total remuneration annually shall be £150,000; (iv) The Respondent shall pay the Claimant in respect of any benefit which the Claimant might reasonably be expected to have had but for the dismissal from the date of his dismissal to the date of re-engagement. The Respondent shall pay the Claimant arrears of pay on the basis that his loss of earnings and benefits are calculated according to the non- discretionary compensation and benefits (including pension benefits) he would have continued to receive in his pre- dismissal role, had he not been dismissed, during that period. (v) The Claimant shall be restored to the position of Director and shall have the pension rights associated with the Data Commercialisation Director post. (vi) The order must be complied with 21 September [six weeks].[1]This was a remedy hearing following liability judgment sent to the parties on 15 March 2018. That liability judgment determined that the Respondent had dismissed the Claimant unfairly and that, had it acted fairly, it would not have dismissed the Claimant. The Tribunal also decided that the Claimant had contributed to his dismissal in the order of 20%. The Claimant sought reinstatement or, alternatively, reengagement as the remedy for unfair dismissal. The issues to be determined at the remedy hearing were set out by the Tribunal at a hearing on 9 May 2018. They were as follows: Issues 1.1. Whether the Tribunal should make a reinstatement order in the case, in particular: 1.1.1. Whether it is practicable for the employer to comply with an order for reinstatement in the circumstances that the Respondent contends that: 1.1.2. The Claimant’s role no longer exists. 1.1.3. The Respondent would not certify the Claimant as a fit and proper person. 1.1.4. Reinstatement will breach the DFS order. 1.1.5. The Respondent has lost trust and confidence in the Claimant. 1.1.6. The Claimant continues to criticise the Respondent and appears to have lost confidence in the Respondent. 1.1.7. The DFS concluded that the Claimant played a role in misconduct which led to a $150 million fine for the Respondent. 1.2. Whether it would be just to order reinstatement having regard to s116(1)(c) ERA 1996 the Claimant’s contributory fault and/or 1.3. Whether the Tribunal should exercise its discretion to order reinstatement. 1.4. Whether the Tribunal should order the Respondent to re-engage the Claimant and, in particular 1.4.1. Whether there is employment comparable to that from which the Claimant was dismissed, or other suitable employment. 1.4.2. Whether it is practicable for the employer to comply with an order for reengagement, for the reasons set out in paragraphs 2.1.1.1 – 2.1.1.6 above. 1.4.3. Whether it would be just to order re-engagement where the Claimant contributed to his dismissal under s116(3)(c) ERA 1996. 1.4.4. Whether the Tribunal should exercise its discretion to order reengagement. 1.5. If the Tribunal does order re-engagement, on what terms the Claimant should be re-engaged, as set out in s115(2) Employment Rights Act 1996.[2]The Respondent opposed the Tribunal making, either, or a reinstatement order, or a reengagement order. It did not oppose the Tribunal awarding the Claimant a basic award of £3,065.60 and the maximum compensatory award of £78,962, in compensation for unfair dismissal.[3]In preparation for the remedy hearing, I made orders on 9 May 2018 which I described as follows: -3.1 The parties agreed that it would be sensible for the Claimant to answer the questions sent by the Respondent to the Claimant on 8 May 2018 at 12.24, regarding the nature of a role into which he should be re-engaged. They agreed that thereafter, the Respondent would conduct a job search and inform the Claimant of the results, so that the Claimant could identify, from the results, any roles in respect of which he says the Tribunal should order re-engagement.3.2 The Claimant agreed that he would identify the roles into which he seeks re-engagement by 19 June 2018 that that he would also say why he contends that the roles are comparable and suitable and why reengagement would be practicable and just.3.3 The parties then agreed to exchange witness statements by 3 July 2018, along with any other documents on which they rely in relation to remedy.3.4 There was some dispute about the extent of the order I should make requiring the Respondent to provide information on the number of new MD roles taken up by external and internal hires in the last three years and the number of MD vacancies advertised in the last three years. The Claimant contended that the order should be in relation to MD roles globally. The Respondent said that it should be confined to the UK; an order in relation to global roles would be extremely onerous. I had understood that the context in which the Claimant had made his application for disclosure/information was in the context of his knowledge of appointments to MD roles and advertisements for MD roles in the UK, rather than globally. My order, therefore, was for the Respondent to provide information regarding UK roles. The Respondent said that it could provide the relevant information to the Claimant by 22 May 2018.3.5 I also ordered the Respondent to provide vacancy adverts for the roles set out in the Claimant’s application for information dated 6 May 2018. In addition, I ordered the Respondent to provide disclosure of hiring plans which contained those roles. The Claimant asked for the date of the hiring plan which first contained the relevant role. I told the Respondent that I was ordering that the first iteration of the relevant hiring plan on which the role appeared should be disclosed. If the date of that document is not apparent from the document itself, I said that I expected that, if that document was held in electronic form, it could be interrogated and the date on which the first iteration was created could be established and disclosed. I agreed with the Respondent that the wording of the relevant order should be that the Respondent conduct a reasonable search for the vacancy adverts and the first iteration of the hiring plan which mentioned the roles set out in the Claimant’s application dated 6 May 2018, in so far as they exist in the UK. The Respondent agreed to do that by 12 June 2018.3.6 The Respondent also agreed to disclose to the Claimant the three Compliance Remediation plans set out in his written application of 9 May 2018. The Respondent shall do this by 12 June 2018.3.7 The Claimant agreed to provide disclosure of his current CV to the Respondent by 15 May 2018.[4]The parties had generally complied with those orders.[5]On 31 May 2018, the Respondent had sent the Claimant a list of 294 vacancies at Managing Director and Director grades in all the Respondent’s global locations.[6]On 12 June 2018, the Claimant listed 33 roles in which he was interested, and, on 15 June 2018, the Respondent sent the Claimant available job descriptions for the roles.[7]On 19 June 2018, the Claimant identified 15 roles into which he sought to be reengaged.[8]On 10 July 2018, the Respondent told the Claimant that 9 of those 15 roles were no longer vacant.[9]At the start of the remedy hearing, the Claimant told the Tribunal that he did not wish to cross-examine the recruiting managers for the remaining 6 vacant posts. He contended that, if the Tribunal were to make an order for re-engagement, it would not be necessary for the Employment Tribunal to specify a particular post into which the Respondent should re-engage the Claimant. The Claimant nevertheless indicated that he did not accept the evidence of those recruiting managers that, either, the Claimant did not have the skills required for the role, or could not be employed in the relevant role because of the New York DFS Consent Order, or that the Claimant was otherwise unsuitable for the relevant role. I decided that, if the Claimant wished to challenge the evidence of those recruiting managers, then they would have to be called to give evidence and the Claimant would need to cross-examine them, so that they would have an opportunity to provide an answer to his challenge.[10]The Respondent helpfully arranged for the relevant managers to attend to give evidence at short notice, whether in person, or by video link from America.[11]Also at the start of the hearing, the Respondent made an application for an order that some of the Claimant’s witness statement be excluded from evidence because that evidence was not relevant, would be disproportionately time consuming and a distraction from the issues to be determined, prejudicial to some of the individuals mentioned and/or calculated to embarrass the Respondent and/or those individuals. I did make an order that some of the Claimant’s evidence be excluded, giving reasons orally at the time.[12]Later during the hearing, on the Respondent’s application, I made an anonymisation order in respect of two individuals on whom the Claimant relied as comparators. I gave reasons orally for making the anonymisation order.[13]I heard evidence from the Claimant, who relied on two witness statements and from Tim Cartledge, the Claimant’s former manager.[14]I heard evidence from 7 witnesses for the Respondent: Michelle Kates, Global Head of Employee Compliance; James Hassett, Global Head of FX Trading and hiring manager for the role of Global Head of FX Platforms; Sameer Jain, Chief Technology Officer and hiring manager for the role of Head of Developer Experience; Laurence Braham, Co-Head of Technology Banking and hiring manager for the role of Managing Director Technology Banking; Grant Lewis, Director of Payment Processing and hiring manager for the role of Director Data Commercialisation; John Stecher, Group Head of Innovation and Chief Innovation Officer and hiring manager for the role of BI Innovation Coverage Officer; and Eric Anderson, Pre-Trade Technology Lead and hiring manager for the role of Head of Macro Electronic Trading.[15]There was a Remedy Hearing Bundle in four volumes and a Correspondence Bundle. Page references in this judgment are to pages in the Remedy Bundle, unless otherwise stated. The parties submitted written submissions both at the beginning and the end of the remedy hearing. The parties exchanged written closing submissions and written replies to closing submissions; they also made oral closing submissions.
Findings of Fact
[16]The Claimant is an exceptionally intelligent and well qualified individual in the field of finance and investment banking. He has a First Class degree in Natural Science from Cambridge University, a PhD in Computational Neuroscience from Oxford University, a First Class Maths Degree from the Open University and a recent Masters Degree with Distinction in Machine Learning from University College London, for which he won entry to the Dean’s List, which is given to the top 5% of graduates.[17]He has 16 years’ experience in finance and investment banking and many years’ experience in coding and, subsequently, in managing teams developing electronic trading systems. He has skills in managing large IT projects, in electronic trading, in real-time low latency technology systems, in artificial Intelligence (AI) and Machine Learning, in Advanced Statistical Modelling and in Market Making and Market Structure.[18]At the time of his dismissal by the Respondent, the Claimant was employed as Head of Automated Flow Trading within the Respondent’s Electronic Fixed Income Currencies and Commodities (“eFICC”) trading business. His corporate title was Managing Director. He had been paid gross pay of over £1m in 2014.[19]The Claimant was employed in Barclays’ FX business, which is part of its investment bank. It facilitates transactions on behalf of clients seeking to hedge or trade currencies.[20]The Claimant had direct supervisory responsibility over London-based traders and indirect supervisory responsibility over technology and quantitative research groups.[21]The Claimant told the Tribunal that he sought a reinstatement or re-engagement order. He said that it was his only real hope of re-entering the job market.[22]The Claimant said that he was seeking reinstatement to the role he would have been reorganised into. He said that it would be the same job with the same relationships and responsibilities that he had previously had. He said the e-FX business still existed and was, in very large part, the same as when he was dismissed.[23]The Claimant also said he could be reinstated into the role of Head of eFX Trading, which he held from 2010-2013, the duties and responsibilities of which were transferred to his Head of Automated Flow Trading eFICC role.[24]The Claimant said that, in reality, Managing Director and Director roles were not advertised in the Bank. He contended that there were far more roles available than the roles which appeared on the Respondent’s vacancy list.[25]Nevertheless, pursuant to the Tribunal’s Orders, the Claimant had identified the roles, from the vacant roles disclosed to him, which he said had the skills and qualifications to perform. He had explained why he considered the roles suitable, Correspondence Bundle, p99 -104.[26]The following 6 roles were the roles which were unfilled at the time of the Tribunal remedy hearing and to which the Claimant contended that he should be reengaged:(a) Head of Developer Experience, hiring manager Mr Jain;(b) Director Data Commercialisation, hiring manager Mr Lewis;(c) Head of Macro Electronic Trading and Markets Analytics Technology, hiring manager Mr Anderson;(d) Managing Director Technology Banking, hiring manager Mr Braham;(e) BI Innovation Coverage Officer, hiring manager John Stecher;(f) and Global Head of FX Platforms, hiring manager James Hassett.[27]Addressing his suitability for the role of Head of Developer Experience, the Claimant said he had 25 years’ experience in software development, 17 of which had been in finance. He had worked in, and then led, numerous development teams; he had been a hands-on developer, cutting code for 10 years of his career in finance. The Claimant said that he understood the competing constraints operating on developers in investment banks generally and in Barclays specifically and understood the role from the perspective of being a key business user of in-house built technology, Correspondence Bundle p102.[28]With regard to the Director Data Commercialisation post, the Claimant said that that role fitted squarely within his fields of expertise: Data Analytics, IT Project Leadership and Business Focused Quantitative methods and proven commercial success, Correspondence Bundle p103.[29]Regarding the Head of Macro Electronic Trading and Markets Analytics Technology Managing Director post, the Claimant said, “This job is made for me. There are very few people in the industry who can point to the breadth and depth of experience I have in electronic trading of macro products,” Correspondence Bundle p104.[30]Laurence Braham was the recruiting manager for the Managing Director Technology in Banking role. The Claimant confirmed that he no longer sought reengagement into that role following Mr Braham’s evidence to the Tribunal.[31]Addressing the BI Innovation Coverage Officer Director role, the Claimant said that his detailed knowledge of global markets, as well as implementing new technology, made him ideal for the role. He said that he had extremely up-to-date training in techniques at the cutting edge of Artificial Intelligence and machine learning and this would make him a compelling candidate, Correspondence Bundle p103.[32]With regard to the Global Head of FX platforms, the Claimant said he was uniquely well qualified for the role, having worked in FX trading technology for 15 years. He said he had rare and extensive experience in the Barclays FX electronic platforms, having run and grown the main one, BARX, for five years, Correspondence Bundle p103. Regulatory Context[33]The Respondent’s eFICC trading business was part of its investment banking business. The investment banking business is regulated in the UK by the Prudential Regulation Authority and the Financial Conduct Authority. In the US, the Bank’s significant regulators and authorities include the New York State Department of Financial Services (“the DFS”), the Commodity Futures and Trading Commission, the US Department of Justice and the Board of Governors of the Federal Reserve System.[34]On 17 November 2015, Barclays Bank entered into a Consent Order with the New York State Department for Financial Services (DFS), under which the bank agreed to pay a civil penalty of $150m (page 19 remedy hearing bundle).[35]The preamble to the agreed Order said that: “Barclays failed to properly use Last Look due to the failure of systems and controls, including management oversight..” and “.. there was a lack of transparency both internally and with customers regarding Last Look..” and “.. in certain instances, information provided to customers and/or the Barclays sales team concerning Last Look was insufficient and/or incomplete,” (p.20).[36]The “Factual Background” set out in the Order stated, at paragraph 28, “Certain senior Barclays employees instructed traders and IT employees not to inform the Barclays Sales team about the existence of Last Look: a. On June 6, 2011, in an email discussion about Last Look, a Barclays Managing Director and Head of Automated Electronic FX Trading wrote: “Do not involve Sales in anyway whatsoever. In fact avoid mentioning the existence of the whole BATS Last Look functionality. If you get enquiries just obfuscate and stonewall.” … c. On November 7, 2011, the Barclays Managing Director and Head of Automated Electronic FX Trading wrote: “Do not discuss Last Look with Sales. If there has been a spurt [in rejected trades] just blame it on the weekend IT release and say it’s being fixed” (p.27) The order said: “Violations of Law and Regulations With regards to the aforementioned conduct, the Bank has conducted banking business in an unsafe and unsound manner.”[37]As set out in the liability judgment, the Order required the bank to take all steps necessary to dismiss the Claimant, whom the Order described as having: “played a role in the misconduct discussed in this Consent Order” (p.27). The Order also said (para 33): “If a judicial or regulatory determination or order is issued finding that the termination of any of the above employees is not permissible under local law, then such employees nevertheless shall not be allowed to hold or assume any duties, responsibilities, or activities involving compliance, FX benchmarks, or any matter relating to U.S. or U.S. Dollar operations.” The “Factual Background” in the Order also stated: “Barclay’s Use of Last Look Was Overbroad 9. Barclays did not seek to distinguish toxic order flow from instances in which prices merely happened to move in favour of the customer and against Barclays after the customer’s order was entered on Barclay’s systems. 10. Barclays instead applied Last Look to all API/FIX trades, as well as a handful of GUI customers. 11. From 2009 to 2014, a large number of the trades Barclays rejected were not truly examples of latency arbitrage or other toxic order flow. …13. Whenever prices within this holding period moved against Barclays and in favour of the customer beyond a certain undisclosed loss threshold, Barclays treated the trade as toxic flow.14. Barclays thereby evaluated and applied its Last Look rejection protocols almost entirely in reference to the profit or loss the trade would bring to the Bank.15. Barclays did not perform an analysis to ensure Last Look was limiting its rejections to trades that in fact reflected “latency arbitrage” or other truly “toxic” flow.16. Thus, instead of employing Last Look as a purely defensive measure, Barclays instead used it as a general filter to reject customer orders that Barclays predicted, based on price movements during the hold period, would be unprofitable to the Bank” (p23).[38]The Order required the bank to work with a monitor installed by the DFS on remediation plans (p.28 paras 34-35).[39]The Order stated that, upon a finding that the bank was in breach of the Order, the DFS had all the remedies available to it under New York Banking and Financial Services Law (para. 37, p.29). Those remedies could include fines, removal of officers and removal of the bank’s licence to operate in New York. At the time the Consent Order was entered into, Barclays New York branch had more than 500 employees and total assets of $36b (p.19).[40]In the UK, the Financial Conduct Authority (“the FCA”) and the Prudential Regulation Authority (“the PRA”) have issued regulations to institute a “Certified Persons Regime,” which has applied to banks such as the Respondent since 7 March 2016.[41]In the case of the FCA, the main regulations in respect of the Certified Persons Regime are set out in the Senior Management Arrangements Systems and Controls (“SYSC”) section of the FCA Handbook in subsection 5.2 (pgs.240-7 Remedy bundle).[42]Under the Certified Persons Regime, Barclays is required to certify any of its employees performing a “significant harm function” (SYSC 5.2.4). Certificates can only be issued where the Bank is satisfied that the employee is “fit and proper” to perform the function in question (SYSC 5.2.5). Under the FCA’s certification regime, firms should ensure that their employees only perform an “FCA specified significant harm function” if the employee has a certificate issued by the firm to perform that function (SYSC 5.2.3, p.240). A firm may issue a certificate to a person only if the firm is satisfied that the person is a fit and proper person to perform the FCA specified significant harm function to which the certificate relates, (SYSC 5.2.6, p.240).[43]In assessing if a person is fit and proper to perform an FCA specified significant harm function, a firm must have regard, in particular, to whether that person:(1) has obtained a qualification,(2) has undergone or is undergoing training,(3) possesses a level of competence, or(4) has the personal characteristics, required by general rules made by the FCA.” (p.240, SYSC 5.2.7).[44]The FCA has issued guidance about the criteria which the FCA would expect a firm to consider in assessing if a person is fit and proper to perform an FCA specified significant harm function (SYSC 5.2.8, p.241). FCA specified significant harm functions include “material risk takers,” as defined in SYSC 5.2.42r, pgs.244 to 245): “… each function performed by a member of a firm’s dual-regulated firms Remuneration Code staff (including any person who meets any of the criteria set out in articles 3 to 5 of Commission delegated regulation (EU) No 604/2014 (criteria to identify categories of staff whose professional activities have a material impact on an institution’s risk profile)) is an FCA-specified significantharm function.” (p.246).[45]The relevant guidance issued by the FCA on the criteria which firms should consider when assessing fitness and propriety is set out in section FIT1.3 of the FCA Handbook (pgs.238 to 239). This says that firms are required to assess fitness and propriety of staff having regard to substantially the same factors as outlined in FIT2: “In the FCA’s view, the most important considerations will be the person’s:(1) honesty, integrity and reputation;(2) competence and capability; and(3) financial soundness. In assessing fitness and propriety, account will also be taken of the activities of the firm for which the control function is ….. to be performed, the permission held by that firm and the markets within which it operates.” (FIT 1.3, p.238).[46]FIT2 states that the relevant authorised person determining the honesty, integrity and reputation of staff being assessed under FIT should consider all relevant matters including those set out in FIT 2.1.3G which may have arisen either in the United Kingdom or elsewhere (p.239a).[47]In considering the reputation of staff being assessed, a relevant authorised person should have regard to whether that person’s reputation might have an adverse impact upon the firm for which the function is to be performed and the person’s responsibilities (FIT2.1.2A, p.239a). The FIT 2.1.3G matters “to which a relevant authorised person should also have regard, include, but are not limited to:(1) Whether the person has been convicted of any criminal offence …;(2) Whether the person has been the subject of any adverse finding or any settlement in civil proceedings, particularly in connection with investment or other financial business, misconduct, fraud or the formation or management of a body corporate;(3) Whether the person has been the subject of, or interviewed in the course of, any existing or previous investigation or disciplinary proceedings, by the appropriate regulator, by other regulatory authorities …;(4) Whether the person is or has been the subject of any proceedings of a disciplinary or criminal nature …;(5) Whether the person has contravened any of the requirements and standards of the regulatory system or the equivalent standards or requirements of other regulatory authorities …; (8) Whether, as a result of the removal of the relevant licence, registration or other authority, the person has been refused the right to carry on a trade, business or profession requiring a licence, registration or other authority; (9) …; (10) Whether the person, or any business with which the person has been involved, has been investigated, disciplined, censured or suspended or criticised by a regulatory or professional body, a court or Tribunal, whether publicly or privately; (11) Whether the person has been dismissed, or asked to resign and resigned, from employment …; (13) Whether, in the past, the person has been candid and truthful in all his dealings with any regulatory body and whether the person demonstrates a readiness and willingness to comply with the requirements and standards of the regulatory system and with other legal, regulatory and professional requirements and standards.” (pgs.239a to 239c).[48]The FCA guidance states that all relevant matters should be considered, including criminal convictions. With regard to the latter, “It any staff being assessed under FIT has a conviction for a criminal offence, the firm should consider the seriousness of and circumstances surrounding the offence, the explanation offered by the person, the relevance of the offence to the proposed role, the passage of time since the offence was committed and evidence of the individual’s rehabilitation,” FIT 2.1.1A, p239a.[49]The Certified Persons Regime replaced the previous Approved Persons Regime, under which individuals conducting certain roles within the Bank had to be approved by the FCA. Approval was given or refused depending on whether the individual was considered by the FCA to be fit and proper. The criteria which were taken into account in assessing fitness and propriety were the same as under the Certified Persons regime.[50]I accepted the Respondent’s evidence, from Michelle Kates, Global Head of Employee Compliance by Barclays Services Ltd, part of the Barclays Group, that the Certification regime is of wider application than the previous Approved Persons Regime, due to the broad interpretation of a significant harm function. Barclays considers that the definition of significant harm function applies to 3,500 roles and, in particular, the majority of trading roles at the Respondent. Further, the Regime encompasses material risk takers, who are defined in accordance with EU Regulations No 604/2014 (pgs.248 to 253). The criteria to be applied are both qualitative, based on the individual’s role, and quantitative, that is, based on the individual’s total compensation. An individual whose total compensation is more than €500,000 per annum is presumed to be a material risk taker and subject to the Certified Persons Regime.[51]It is clear from the above that the responsibility for determining whether an individual is “fit and proper” now lies with the firm employing the relevant individual, rather than the FCA. Under the new Certification Regime, Barclays is required to conduct fitness and propriety checks for prospective Certified Persons and any offers of employment are conditional on the Bank’s certification.[52]I accepted the Respondent’s evidence that the decision on whether or not an individual can be certified is taken by the relevant business manager, in consultation with the Respondent’s Compliance Department, which advises on regulatory requirements, and the Respondent’s Legal and Human Resources Departments, as appropriate.[53]The Claimant was registered as an Approved Person throughout his employment by the Bank until March 2016. On 7 March 2016 the Respondent certified the Claimant as a fit and proper person in relation to material risk taking (p.769). He was certified as a fit and proper person in relation to client dealing functions on 7 September 2016 (p.769).[54]Ms Kates was cross-examined about the fact that the Claimant had been certified as a fit and proper person by the Respondent in March and September 2016. She said that the Claimant had simply been “grandfathered” over from the previous regime in March and then, later, in September 2016; the regulator had not introduced client dealing as part of the certified person regime until September 2016. Ms Kates said there was no reassessment of the Claimant as a fit and proper person until March 2017, after he had been dismissed. However, Ms Kates also said that, despite the DFS Consent Order being in place, it would have been wrong for the Respondent to pre-judge the outcome of disciplinary proceedings by decertifying the Claimant. She said that, when the certification came in the Respondent had not decertified the[55]As at 7 March 2016, the FCA Handbook, at SUP 15.3.7 stated that: “Principle 11 requires a firm to deal with its regulators in an open and cooperative way and to disclose to the FCA appropriately anything relating to the firm of which the FCA would reasonably expect notice…” (p.344). SUP 15.3.8 provided: “Compliance with Principle 11 includes, but is not limited to, giving the FCA notice of: … (2) any significant failure in the firm’s systems or controls, including those reported to the firm by the firm’s auditor …” (p.345).[56]It appears that the Respondent had some telephone discussions with the FCA, updating it on the conduct of the DFS investigation into Last Look, as well as a US Department of Justice investigation (which ultimately did not result in any regulatory enforcement action by that body). These amounted to about four or five brief telephone conversations in 2015. In the conversations the FCA was told the Claimant was being interviewed by the US Department of Justice. On 17 November 2015 the Respondent told the FCA about the DFS Order and the request for termination of UK approved individuals, including the Claimant (pgs.809 to 813).[57]The Claimant submitted a Subject Access Request to the FCA concerning himself; brief notes of these telephone calls were the only documents which the Subject Access Request returned.[58]Ms Kates was cross-examined on whether the Respondent had notified the FCA of a “material breach” in the Claimant’s case. She said that the relevant conduct rule was not in force until March 2016. Ms Kates said that the Bank was not expected to notify the FCA of any breach of its Code of Conduct source book rules if that breach occurred before the application of the Code of Conduct source book to that bank (COCON)(p.795 of the bundle). She confirmed that the Respondent had not notified the FCA of disciplinary action in relation to the Claimant concerning breach of the FCA’s rules. The Claimant’s Contractual Terms[59]When the Claimant was first appointed by the Respondent, his statement of employment particulars simply provided the following about his job role: “Whilst you are employed by the Company, you are expected to devote your full business time and attention to the performance of such duties as may from time to time be assigned to you by the Company or Barclays Capital … You may be asked to perform services for one or more of the Company’s Affiliates … You will initially be based at 5 North Colonnade, Canary Wharf, London, E14 4BB. In view of the nature of our business, it may become necessary to require you to work in different divisions, sections or offices of the Barclays Group or at business recovery locations.” (p. 355 ).[60]That statement from the written particulars of employment, dated 11 June 2010, was not replaced when the Claimant moved from role to role within the Respondent. That iteration of the employment particulars stated that the Claimant would be appointed as a Director within Barclays Capital with a gross base salary of £85,000 per annum and an additional fixed payment of £55,000 per annum (p. 355). The statement of employment particulars allowed the Claimant to participate in a discretionary bonus scheme. It also entitled the Claimant to receive an incentive award in respect of the 2010 calendar year with a guaranteed value of £215,250 gross (p.357). The terms and conditions also provided for “long term awards” pursuant to the Barclays plc cash value plan and Barclays plc share value plan (p.358). The Claimant’s Attitude; Trust and Confidence[61]During the disciplinary proceedings against the Claimant, the Claimant made statements and allegations which were critical of the Respondent and its actions. The Respondent cross examined the Claimant in detail about these at the Remedy Hearing and set them out exhaustively in its submissions. The statements were as follows:(1) “Further, I require your written assurance that no decision has yet been taken by the Bank in relation to the allegations against me…it seems clear to me that the outcome of this disciplinary action is a foregone conclusion and that the Bank is simply going through the motions to give the appearance of acting reasonably” (letter 2 December 2015, Claimant to Human Resources [2/63/625]).(2) “It is quite clear that Barclays have now abandoned any pretence of conducting a fair disciplinary process. However I have no interest in continuing to allow Barclays to inflict further stress and uncertainty on me and my family. Hence I consent to attending this sham disciplinary process in order to allow us to move the process forwards” (Email of 1 March 2016, Claimant to to Human Resources) [2/64/626-7].(3) “I will then address the DFS settlement which is a shameful tissue of deliberate misrepresentations, distortion of the truth, outright lies and abuse of power” (Claimant’s submission in disciplinary proceedings, 4 April 2016) [2/65/628].(4) “DF said that he had been subject to a malign interpretation of the wording” (Disciplinary hearing of 23 March 2016) [2/66/630].(5) “DF read a paragraph from DFS allegations and said that this was all blatant lies” (Disciplinary hearing of 23 March 2016) [2/66/631].(6) “The firm started harassing me over my alleged inappropriate communications in April 2015 when I was suddenly publicly attacked and humiliated by the firm’s lawyer ….His behaviour was unprofessional and contrary to company policies” (Email of 22 August 2016 Claimant to Human Resources) [2/67/632].(7) “This looks like a cynical delay deliberately to allow Barclays to achieve their goals” (Email of 22 August 2016, Claimant to Human Resources) [2/67/632].(8) “It is quite clear that it is an informal Barclays’ policy to use their employee suspension powers to pin down and oppress staff in an attempt to delay public investigation of the issues and deny employees the opportunity to seek redress in an Employment Tribunal and thus deny them their legal rights” (Email of 22 August 2016, Claimant to Human Resources) [2/67/632].(9) “The random insertion of completely baseless accusations like this is just another example of the active fabrication Barclays are engaged in here” (C’s submission in disciplinary proceedings) [2/68/634].(10) “needs to find a reason to fire me…active fabrication” (disciplinary appeal hearing, 3 November 2016) [2/69/636].(11) ”DF stated that Barclays would have to explain the many emails he brought to their attention. DF believed there was a deliberate misrepresentation of some of the emails” (disciplinary appeal hearing, 3 November 2016) [2/70/637/#3.15].(12) “DF thought that because of the DFS settlement, he understood that Barclays had to find retrospective reasons to fire him but felt that there had been active fabrication of allegations and the Bank would have to defend these in court” (disciplinary appeal hearing, 3 November 2016) [2/70/638/#4.35].(13) “[DF] further explained that the firm had a gun to its head to sign the absurd settlement with a rogue regulator and therefore it was compelled to fire him. He said that Barclays then fabricated reasons to fire him. DF thought the entire thing was a fabrication, misrepresentation of the truth, lies and abuse of power” (disciplinary appeal hearing, 3 November 2016)(14) “DF thought Barclays needed a fall guy and he was that person” (disciplinary appeal hearing, 3 November 2016) [2/70/640/#8.1].(15) C repeated his allegations against a Barclays’ in-house lawyer on 15 November 2016 [2/71/641].[62]The Respondent also cross examined the Claimant about statements he had made in his ET1:(1) “During that meeting I was harangued very aggressively by a Barclays lawyer despite being wholly co-operative” [1/6/61/#15].(2) “Barclays notified me that they refused to provide me with clearly all the documents I needed” [1/6/62/#21].(3) “Barclays failed to protect my interests and rights why they entered into this legal settlement” [1/6/63/#30].(4) “By agreeing to dismiss me before even starting their own disciplinary process they ensured that all that followed was a foregone conclusion carried out in an attempt to convey the impression of fair treatment” [1/6/63/#31].(5) “While Barclays have employed a large number of lawyers to pore over thousands of my emails and engaged in gross cherry-picking to fabricate their case” [1/6/63/#32].(6) “Barclays have clumsily attempted to construct a bogus and ill defined concept of fairness in relation to clients” [1/6/63/#33].(7) “Barclays have tried to fabricate a story about the adequacy of the controls in the business I worked in” [1/6/63/#35].(8) “I have received totally different treatment from other staff in situations where there were real failures and abuse of clients as can be easily proven by comparison with those cases” [1/6/64/#36].(9) “Barclays have deliberately strung out my suspension period as an act of control and defensive stalling” [1/6/64/#37].(10) “The attempt to try and use one example of my diligence and a slow IT delivery chain as evidence of a ‘contempt for clients’ illustrates the extreme lengths to which Barclays are prepared to go to fabricate their case” [1/6/64-5/#41].[63]The Respondent also drew the Tribunal’s attention to the Claimant’s liability witness statement, in which the Claimant said:(1) “Overall I felt that Allegation Three was a blatant, selective and unrepresentative hand picking of evidence to make a contrived case against me while completely ignoring the vast majority of times when correct information was given by my team”(2) “After receiving judgment and various communications [John Mahon] had had after the disciplinary meetings it was evidence that he had a systematic bias in misquoting and misrepresenting the statements I and others made in the disciplinary meetings”(3) “I genuinely felt (and still feel) that Barclays needed a fall guy and I was that person” And to his first remedy witness statement, in which the Claimant : (1) Referred to the Respondent’s “delaying tactics”, obstructive behaviour”, “ obstruction of fair disclosure” ; (2) Said that he had suffered enormous reputational damage as a direct and avoidable consequence of the Respondent’s actions and that the Respondent’s decision to publicise his alleged misconduct in the Consent Order was unfair and violated his rights under New York law; (3) Alleged that the Respondent had violated its own policies;(4) Said that Barclays had abused their suspension powers and his employment rights to suit their own agenda, “.. at the cost of a career I had toiled over for most of my adult life;”(5) Spoke about “.. the firm agreeing the Consent Order and fabricating the allegations to unfairly dismiss me.” And to his second remedy witness statement , in which the Claimant said: (1) “After further examination of the FCA Handbook I discovered that this reply by the Respondent was grossly misleading;” (2) “This is a misleading attempt to evade the truth of the matter;” (3) “Hence the firm was certainly required to notify the FCA. These facts prove that their claim now that they were not required to report is an outright falsehood.”[64]The Claimant was cross-examined about his attitude to the DFS Order. He agreed that firms must deal with regulators in an open and cooperative way. He said that, however, if a lawful Order of a regulator was unfair, or had followed an unfair process, or violated the rights of individuals, then firms should breach or renegotiate such Orders. When pressed on this, he said that firms should renegotiate the terms of unfair Orders.[65]The Claimant agreed that individuals must be open and cooperative with regulators.[66]The Claimant agreed that aspects of the DFS Order, including criticisms of the conduct of Last Look in it, referred directly to him. The Claimant said, however, that he had never been given an opportunity, as was his right under New York law, to make representations about the Order before it was entered into. The Claimant agreed that he was highly critical of the DFS in respect of its treatment of him, as a result.[67]The Claimant agreed that breaching the DFS Order could have serious consequences for the Respondent, including removal of its banking licence in New York.[68]It was put to the Claimant that he had described the DFS as a “rogue” regulator. The Claimant agreed that he had, and explained that he had used the term “rogue” in the modern sense of “outlier”. The Claimant said that DFS had adopted a malign interpretation of words that he had used in his emails. When cross-examined about an assertion that the DFS had told blatant lies, the Claimant acknowledged that he had used those words, but said that, now, with a cooler head and not under pressure, he would word his statement differently.[69]The Claimant agreed in cross examination that mutual trust and confidence was essential between employers and employees. The Claimant agreed that he had accused the Bank of engaging in a sham disciplinary process, adopting deliberate delaying tactics, engaging in obstructive behaviour in the Tribunal proceedings. He said that he was critical of the Respondent in relation to its traducing of his rights under New York law, in the circumstances that he considered that Barclays had an obligation to defend his rights. He said he had been excluded from negotiations and that there was no-one, other than the Respondent, who could have protected his rights. The Claimant said he acknowledged, however, that firms were under enormous pressures from regulators and that they were therefore highly motivated to settle proceedings against them by powerful regulators. He said that, in relation to his dismissal, he believed that the DFS Order created such a strong current that no-one in the firm was going to swim against it.[70]The Claimant was cross-examined on his use of the words to the effect that Barclays had abandoned any attempt at a fair disciplinary process. The Claimant said that, at that point, he had been suspended for 9 months and had received allegations against him which he knew to be baseless. He was under enormous personal and mental stress and may have been using particular language in those circumstances.[71]The Claimant was cross-examined about his description of the disciplinary process as a “sham”. He said that “sham” was a lawyer’s words and he, himself, may have used a different word to describe it now; but that the disciplinary process, in his view, was profoundly flawed and substantively unfair.[72]The Claimant said that he believed that Mr Mahon had engaged in active fabrication and had misinterpreted the facts. He did believe that Mr Mahon had invented the notion that the Claimant had contempt for clients. He said that allegation 6 against him was at the extreme end of absurd criticism of him. The Claimant agreed that he was very critical of Mr Mahon, but said that Mr Mahon had left the business.[73]It was put to the Claimant that he was asserting that the Respondent had used him as a “fall guy.” The Claimant said that he believed that the DFS had needed a fall guy - and that that was the Claimant.[74]When cross examined about whether he had trust and confidence in the Respondent, the Claimant said that he was critical of the lawyers in the case. He did not agree that the lawyers took their instructions from all the employees of the firm. He said that he did believe that the Respondent had abused its suspension powers, in that suspension was unnecessarily lengthy and he had not been given the reason for it immediately, as required in the firm’s procedures. The Claimant said, however, that when he pointed out things that were wrong and unjust, he was acting in accordance with the Respondent’s principles.[75]It was put to the Claimant that he had been highly critical of the Human Resources team which had run his disciplinary process and had advised Mr Mahon. The Claimant responded that be believed all the important decisions in his disciplinary process would have been made by a lawyer of some seniority. He said that the HR team would not have been making such decisions.[76]It was put to the Claimant that he would have to deal with lawyers if he was reinstated or reengaged. The Claimant agreed that this could happen in the context of internal investigations, regulatory issues in relation to certain job roles and, potentially, in relation to contractual and business matters in certain job roles. It was put to him that he would be unable to deal cooperatively with the Respondent’s lawyers. The Claimant denied this. He said that he never had had the slightest problem in dealing with lawyers when he was employed by the Respondent. Indeed, he said that he had been complimented on his cooperation with lawyers in defending the DFS case against the Respondent.[77]The Claimant said that any resentment he had was towards the lawyers conducting his particular employment case, but that they were not the majority of lawyers employed by the Respondent. He agreed that he would find it difficult to deal with the individual lawyer who he felt had harassed him. However, that lawyer lived in New York and the Claimant said the chances of the Claimant coming into contact with him again were non-existent. He denied that he had deep anger towards the Respondent’s lawyers generally.[78]It was put to the Claimant that he would not be able to deal cooperatively with Compliance. The Claimant denied this; he said that he had never had a problem in dealing with Compliance and believed that Compliance did a very difficult job under competing constraints and did it very well, in general.[79]It was put to the Claimant that he would have difficulty in dealing with regulators cooperatively. The Claimant denied this and said that lots of critical statements had been made by senior Respondent personnel of regulators, but no one had declared that those people were unemployable. He said he had cooperated fully with regulators when required to do so and would do so in future, although he would be watching his own back in the future.[80]It was put to the Claimant that so numerous were the targets of his criticism and so deep-seated his resentment, that the Claimant would not be able to work cooperatively at the Respondent. The Claimant denied this. He said his criticism was tightly limited to behaviours and to people in the litigation department. He had no problems with Compliance and Human Resources. He said that he had undergone tough treatment for 3 years and anyone who tried to take on disciplinary proceedings and a Tribunal claim would endure a lot. He said that management changed every few years, in any event. He said that he had good trust in his colleagues and noted that Mr Jain and Mr Hassett were happy to see him in the Tribunal. The Claimant said that he was not angry with the firm and was not irrational.[81]The Tribunal heard evidence from Sameer Jain, Technology Officer and Managing Director for Barclays Services Corporation, part of the Barclays Group. Mr Jain told the Tribunal that, previously, he had had responsibility for technology within Barclays Investment Bank and had come into contact with the Claimant during his work there. Mr Jain did not say that he considered that trust and confidence had broken down between the Respondent and the Claimant. Mr Jain is an extremely senior employee of Barclays, being the Chief Technology Officer for a Division which employs 25,000 people. Mr Jain’s evidence regarding re-engagement of the Claimant, and which roles could be suitable for the Claimant, is set out in detail below, in these Reasons.[82]Michelle Kates, Global Head of Employee Compliance by Barclays Services Ltd, part of the Barclays Group, told the Tribunal that she believed there was no evidence that the Claimant had been untruthful to regulators. She believed that the Claimant had demonstrated willingness to assist regulatory bodies.[83]Mr James Hassett, Global Head of FX Trading and a Managing Director at the Bank, said that he understood that the Claimant had made a number of serious allegations to the effect that his dismissal by Barclays was a sham in order to appease the Bank’s regulators. Mr Hassett said that he did not consider that it would be appropriate for the Claimant to rejoin the business in a senior position having made these allegations. He also said that, in light of the Tribunal’s findings on contribution and the DFS Consent Order, he would find it difficult to have trust and confidence in the Claimant as a supervisor of other team members within the FX business and as a senior member of his team with a duty to effectively manage risks in the FX business. He also considered that team members reporting to the Claimant might find it difficult to have trust and confidence in him as their manager and supervisor. Mr Hassett said that it was important to bear in mind that trading was a highly regulated industry in which it was essential that there was a close relationship of trust between an employer and its employees, especially those at senior level.[84]It appeared that Mr Hassett’s comments on trust and confidence specifically related to the Claimant being re-enaged in a senior role and as a supervisor of employees in the FX business.[85]Elsewhere in his evidence, Mr Hassett agreed with the Claimant that challenging the things that an employee believed to be wrong was acting in line with Barclays values; and, by contrast, not being open to challenge was inconsistent with Barclay’s values.[86]John Stecher, Head of Innovation and Chief Innovation Officer Managing Director at Barclays Services Corporation in New York gave evidence to the Tribunal. Mr Stecher said that he could envisage the Claimant being hired into a role where the Claimant had a head start over other candidates in terms of skills and where the Claimant’s history did not preclude him from being appointed. He said that the Claimant’s history would one of the inputs into the equation. Mr Stecher said that he did not believe that the Claimant was unappointable to a role in the Bank. Availability of Managing Director and Director Roles at the Bank[87]In oral evidence, Mr Jain confirmed that, when he joined Barclays from UBS, he had been approached by the previous Head of Technology for UBS, now employed by Barclays. Mr Jain said he did not apply through a job advert. He said that his subsequent roles developed in an organic manner, including his role as Head of Exotics and Co-Head of FX; he did not reply to adverts for those posts either. His subsequent role as CIO of the investment bank was not advertised and Mr Jain was simply deemed to be the most appropriate candidate to take on the role. It was his experience that people looked for opportunities. His current role was a new one and he had assumed it following discussions about the future direction of his career.[88]Also in oral evidence to the Tribunal, James Hassett, Global Head of FX Trading, confirmed that when he was first hired by the Respondent in Singapore, he was approached by a Barclay’s employee about an appointment to the potential role. He had not responded to an advert. Mr Hassett moved to a similar job in Sidney after about four years, following ongoing discussions with managers. He also later moved to London in collaboration with managers and not in response to any job adverts. Mr Hassett had been employed as Head of Europe Forwards and then Global Forwards; these roles had evolved over time. Gradually thereafter, Mr Hassett had assumed greater responsibility, until he was appointed to the Head of FX Trading, which, again, was not advertised.[89]Mr Tim Cartledge gave evidence to the Tribunal. He was previously the Claimant’s line manager at the Respondent and was then employed as Managing Director and Head of eFICC. Mr Cartledge said that he had been involved in many dozens of hiring processes at Barclays Bank, at all levels up to Managing Director, for both external and internal candidates. In his experience, most senior external hirers and all senior internal hirers were made without the vacancy being advertised. He said that he was unaware of anything called a hiring plan being a critical part of the process. He said that, despite roles generally not being advertised, there were regular and extensive internal role changes within Barclays, especially at the Managing Director level, as changing business requirements demanded changing staff. He said that Barclays’ businesses evolved structures frequently and rapidly, to take advantage of changing market opportunities. Business Heads would have considerable latitude to make the hires they needed and senior roles, in particular, were offered and were not generally applied for.[90]Mr Cartledge said that he had had the opportunity to assess the abilities of the Claimant at close quarters over many years, having worked with him, both at Barclays and at Dresdner Bank. Mr Cartledge told the Tribunal that the Claimant is the most academically gifted individual he has ever encountered during his time within the banking industry or in academia.[91]Mr Cartledge also said that banking is increasingly more focused on electronic and Artificial Intelligence - based solutions and that the Claimant is at the forefront of expertise in those areas. Banks are developing the use of electronic trading and artificial intelligence, not only in foreign exchange but in credit, commodities, equities and futures and in more day-to-day banking activities such as credit cards and retail and corporate banking. All banks and firms have critical shortages of employees with skills in these areas. In Mr Cartledge’s view, the Claimant’s skills could easily be applied productively at the Respondent.[92]The Claimant told the Tribunal that, in his experience, the normal process for hiring at Managing Director level was to adapt roles to suit senior candidates. He pointed out that, when the remedy hearing had originally been listed for May 2018, the Respondent had submitted a witness statement from a Niall Finnegan, who said that few Managing Director vacancies were available, evidenced by the fact that few were advertised. As a result, the Claimant had applied for specific disclosure in relation to advertisements for some Managing Director roles into which he knew people had been recruited. The Claimant pointed out that that the Respondent’s representatives had then conceded that Managing Director vacancies were often not advertised, but had said that hiring plans for such vacancies were necessary. The Claimant obtained data on advertising of Managing Director vacancies for the past three years in Barclays. The Claimant said that the data showed that 66% of UK Managing Director vacancies were not advertised internally and 96% were not advertised externally. The Claimant pointed to a press report, Bundle pages 821 to 822, which said that in 2018, the UK Bank had added at least 9 Managing Directors to its investment banking division in Europe, Middle East and Africa and that, last year, it had recruited 40 Managing Directors and Directors across its investment bank globally. Reinstatement Head of Automated Flow Trading in the Bank’s electronic Fixed Income, Currencies and Commodities Trading Business (eFICC) – Certification of the Claimant as a Fit and Proper Person[93]Ms Kates told the Tribunal that, if the Claimant were to be reinstated as Head of Automated Flow Trading in eFICC, the role would require him to be certified by the Bank as fit and proper. She said that the matters to be taken into account in making an assessment pursuant to the FCA’s guidance at FIT included any adverse impact a person’s reputation could have on a firm, involvement in regulatory investigations and any contravention of a requirement or standard, or being criticised by a regulatory authority, as well as the person’s competence and capability in carrying out a regulated role. She also said that criticism by a Court or Tribunal and being subject to a DFS Order would be relevant factors for the firm to take into consideration when assessing honesty, integrity and reputation.[94]Ms Kates said that the compliance remediation action plan which was put into place to address issues in Last Look was a very significant body of work (pgs. 1-7 remedy bundle).[95]Her view was the Bank would not be able to certify the Claimant as fit and proper and/or registered and that, therefore, he could not return to work in any certified role at the Bank, or to any role that was subject to similar requirements imposed by a regulator in another jurisdiction. She said that this would be her view regardless of whether the Claimant had been dismissed by the Bank. If the Bank had decided not to dismiss the Claimant on 15 September 2016, the Bank would have been required to assess the Claimant’s fitness and propriety in order for it to continue employing him as Head of Automated Trading. Her view was that the Bank would not have been able to certify the Claimant as such, in the light of the DFS Order and the Employment Tribunal judgment.[96]Ms Kates was asked about Mr Jain’s evidence and the fact that Mr Jain had said that he would only make a judgment in relation to a particular role and that his judgment would depend on the role. She was cross-examined about her blanket assertion that the Claimant could not be certified as a fit and proper person. She said her determination was on the basis that the relevant role would be a certified role and significant harm function role; her blanket statement was made on the basis of the DFS order, the Tribunal outcome and the internal Barclays disciplinary process. All of these would be significant challenges for a supervisor when considering whether to make an assessment of fitness and propriety. Ms Kates said that it was significant that one regulator had taken regulatory action and it did not matter that others had not. She said that she believed that the DFS had standards and practices to ensure that a fair process was undertaken. She expected that the DFS had gone about their investigations and decision-making appropriately. She did not have power, herself, to look behind the DFS decision.[97]Nevertheless, Ms Kates said that she had given her opinion of fitness and propriety, but it did not mean that the Claimant could not be assessed as fit and proper. When challenged in cross examination, she also repeatedly said that the decision would be for the hiring manager.[98]In oral evidence to the Tribunal, Ms Kates said that a memorandum of education which had been given to other employees in relation to their involvement in Last Look operations was not a disciplinary sanction and would not trigger a certification review. Those employees continued to be certified as fit and proper. When cross-examined about other employees of the Bank who had been subject to regulatory sanctions, she said that each case was determined on its own facts and that she was not aware of the individual facts of those cases.[99]James Hassett, Global Head of FX Trading, told the Tribunal that the Bank takes its regulatory obligations extremely seriously.[100]He also said that the Head of Automated Flow Trading for eFICC would be a certified role, in common with most senior trading roles at the Bank. Accordingly, the post holder would have to be certified as “fit and proper” by the Bank, in accordance with the Certified Persons regime. As Head of FX Trading, Mr Hassett is involved in decisions on whether individuals in the FX business could be certified by the Bank. He would generally seek Compliance Department guidance in relation to his decision.[101]Mr Hassett said that, in view of the DFS Order and taking into account Ms Kates’ view on the impact of the Order, he did not consider that it would be appropriate to certify the Claimant as “fit and proper” for the role, if it existed.[102]Mr Hassett was cross examined about the DFS Order. Mr Hassett said that there was a serious lengthy process leading to it, when numerous documents were reviewed, and he accepted the outcome. There was no reason in his mind to think that it was incorrect. It was not his responsibility to revisit the investigation. He trusted that regulatory and compliance teams within the Bank would challenge regulators where appropriate. This was consistent with working with regulators. Once an outcome was reached, it had to be accepted and the Bank needed to move on from it.[103]He explained the Respondent’s assessment that that other employees in the FX business, who had been involved with Last Look at the same time as the Claimant, remained “fit and proper” people. He referred to the DFS Consent Order, where he considered that the issues were looked at in detail and noted that the Order determined that the appropriate level where responsibility lay was at the Claimant’s level.[104]Mr Hassett said that he also believed that the DFS’s findings in respect of the Claimant’s conduct were likely to be well known amongst clients of the FX business. In light of the Claimant’s emails mentioned in the DFS Order and its public findings, he did not consider that it would be acceptable to Barclay’s clients for the Claimant to rejoin the FX business.[105]Mr Hassett said that there would be risks in employing the Claimant because, if something later came to light about the Claimant, Mr Hassett would be accountable for the decision to certify the Claimant as fit and proper. He said that, if the Employment Tribunal were to order the Respondent to re-employ the Claimant, that would be some mitigation of the risk. At its core, certification was a risk-based decision. He said that all the FX roles were client dealing roles and considered that the Claimant was therefore not suitable for any roles in the FX business.[106]Mr Hassett said that he understood that the Tribunal had found that the Claimant had failed to ensure that policies on the use of Last Look were followed in his business. He said, “It is my view that in a regulated industry it is essential that managers properly supervise staff in their business and there is limited benefit in having policies in place without ensuring they are followed.”[107]In his witness statement, Mr Hassett said that the Employment Tribunal’s finding on contributory fault was consistent with his view that it would not be appropriate to certify the Claimant as fit and proper. In cross examination, however, he told the Tribunal that, in isolation, paragraphs 319 and 321 of the Tribunal’s judgment would not be sufficient to prevent the Claimant being certified as fit and proper. Mr Hassett said that they were serious matters.[108]Mr Hassett was asked about Mr Jain’s comment on there being fewer concerns if the Claimant was not employed in a framework setting role. Mr Hassett said that a role which did not involve setting a framework or providing leadership would lie somewhere between a Director and Vice President level - the role might, or might not, be a Director- level role. He said that client dealing functions would not be appropriate for the Claimant. He said that Mr Jain was very experienced, but did not operate in client dealing functions, but worked within technology.[109]The Claimant was cross examined about Mr Hassett’s evidence. He said that he accepted that Mr Hassett held the view that it would not be acceptable to clients for the Claimant to be employed in the eFICC role and that Mr Hassett held that view in good faith. Reinstatement Head of Automated Flow Trading (eFICC) – Existence of the Role[110]Mr Hassett told the Tribunal that the Head of Automated Flow Trading for eFICC role, which the Claimant held at the time of his dismissal, no longer exists in the Respondent’s market business structure. He explained that the Claimant’s trading responsibilities covered, not only FX Trading and currencies, but also some other asset classes – Fixed Income and Commodities. Mr Hassett said that the Respondent’s markets business has since been reorganised, to separate quantitative analysis from trading and, within trading, to segregate FX Trading from other asset classes. As a result, the Claimant’s previous responsibilities are now divided amongst a number of different roles. The FX Trading aspects of his role have been subsumed into the role of Global Head of eFX and FX Spot Trading, held by Ed Falinski, who reports to Mr Hassett.[111]Mr Hassett said that he believed that the Bank could not reinstate the Claimant as Head of Automated Flow Trading, even if the role still existed, without breaching its obligations to the DFS.[112]In oral evidence, the Claimant said he had not cross-examined Mr Hassett on the reorganisation, but that the Claimant’s role would be to slot in under Mr Falinksi. He agreed that such a role had not been identified as a vacant role, but said that that was not determinative of anything, given that that was not how Managing Director roles were appointed to. Reengagement - Individual Roles – Global Head of FX Platforms, Hiring Manager Mr Hassett[113]Mr Hassett is the recruiting manager for the role of Global Head of FX platforms. Mr Hassett confirmed that the role would potentially be suitable for the Claimant. Nevertheless, the DFS Order would prevent the Claimant from holding the role because the role would have a trading mandate and it would not be possible to hold an FX Trading role at Barclays without being involved in US Dollar operations. Further, even if the trading aspect of the role could be hived off, the overall purpose of the role of Global Head of FX platforms is to develop and implement technology for FX Trading within the Bank. FX trading platforms and technology operate globally and, even without a trading mandate, the role would still involve duties, responsibilities and activities relating to $ US operations.[114]Mr Hassett said, therefore, that the Claimant was prohibited by the DFS Order from holding or assuming such a role. He said he could not envisage any senior role in the FX business that did not relate in some way to US or US Dollar operations, given that the business was conducted on a global basis and the US was such an important centre for that business.[115]The Claimant told the Tribunal that he considered himself very well suited to the role of Global Head of FX platforms, but agreed that appointing him to the role of Head of FX platforms would breach the DFS Order. He also agreed that the Global Head of FX would need to be certified as a “fit and proper” person by the Respondent.[116]The Claimant agreed that some of the factors in FIT 2, page 239a, would apply to him. For example, that he had been subject of disciplinary proceedings, subject of regulatory action and criticism in the Employment Tribunal judgment, albeit he said that that was to the limited extent of the contributory fault judgment.[117]The Claimant agreed that Mr Hassett held the view that he could not certify the Claimant as a fit and proper person in good faith. The Claimant said that he agreed that Mr Hassett did not want to take the risk of employing the Claimant in the role of FX platforms and that Mr Hassett held that view in good faith. Reengagement - Individual Roles - Head of Developer Experience, Hiring Manager Mr Jain[118]Mr Jain is the hiring manager for the post of Head of Developer Experience. Mr Jain told the Tribunal that a current Managing Director, already working in the technology business area of Barclays Bank in the UK, had asked to be considered for the Head of Developer Experience role. In the week of the Remedy hearing, Mr Jain had come to London and had met with the individual. Mr Jain told the Tribunal that he intended to give that Managing Director the role and to negotiate a transition period for that individual with his current manager.[119]Mr Jain told the Tribunal that the Head of Developer Experience was a newly established senior global role within the technology business area, with the corporate grade of Managing Director. It involved managing a team of about 100 technologists and its aim was to drive efficiency and standardisation in the way that Barclay’s technologists work and create software. The role would be responsible for ensuring key controls of the Software Development Life Cycle (FSDLC) and technology and cyber standards were upheld and would maintain and enhance the technology platforms used by all business at Barclays. He said that the scope of the role was such that changes to software development practices within the Bank would need to be in an environment that was well controlled and managed to Barclay’s standards.[120]Mr Jain told the Tribunal that the role of Head of Developer Experience might also be designated as a material risk taker role, which meant that the individual would have to be certified by Barclays as a fit and proper person to carry out the role. Mr Jain said that he would take guidance from the Bank’s Compliance Department in making a decision on whether a candidate could be certified as fit and proper. He said that Michelle Kates’ witness statement (as representative of the guidance he would receive from the Bank’s Compliance team), the DFS Order and the Tribunal judgment at paragraphs 316 to 323, “would be significant factors to be taken into careful consideration” in determining whether the Claimant was fit and proper to perform the[121]In Mr Jain’s opinion, the Head of Developer Experience role is not comparable to the Claimant’s previous role, but is fundamentally different. The role in bank-wide, managing 100 direct reports and incorporating the requirements of all 25,000 technology staff.[122]Mr Jain said that he believed that the Claimant did not have the right skill set for the role and that the Claimant’s practical experience in software development was too narrowly focused. The Claimant’s area of specialisation had been in electronic trading platforms within the FX business. Mr Jain was looking for candidates with significant recent technical experience in developing software in a modern way and, in particular, individuals who had worked in Silicon Valley. He would not invite the Claimant for interview for the role.[123]However, Mr Jain said that, more generally, he had worked in technology and banks for his whole career and knew that there were often movements from trading and quantitative analyst roles into technology functions. Mr Jain said that he knew the Claimant and had a good understanding of his previous role and skill set and could see the Claimant doing other roles in Barclays, particularly where there was interplay between quantitative analyst technology and trading. Given the Claimant’s experience and skill set, which were high, the Claimant should be able to find a role available if there were an opening.[124]Mr Jain said he had not reached a conclusion that the Claimant would not be suitable in any role at the Bank. However, Mr Jain did not have many openings. He did not have a suitable enough role for the Claimant, at present.[125]In considering whether the DFS Order, the Tribunal’s judgment and findings of misconduct against the Claimant would be a bar to the Claimant assuming any role in the technology division, Mr Jain said that he would have to consider the points and dig into them. Mr Jain said that whether the Claimant would be setting key risk indicators would be important in his decision. Key risk indicators are matrices which managers look at to determine whether the right things are being done at the Bank. People who set key risk indicators have responsibility for identifying the correct risk indicators and thresholds of materiality, to determine whether functions are operating correctly. Being such a “control owner” is a very serious responsibility. Mr Jain said that, if the Claimant were to be considered for a job in the Respondent’s Technology Division, the level of Mr Jain’s concern would depend on the particular role for which the Claimant was being considered. Some roles operate within a risk framework - and some set the risk framework. There would be a different conversation to be had, depending on whether the Claimant would be operating within a framework, or whether the Claimant would be setting the risk framework. He would have fewer concerns if the Claimant was simply working within a framework, rather than monitoring matrices; it would depend on the overall risk management responsibility that the role would have.[126]I concluded that Mr Jain could envisage the Claimant being employed by the Respondent in a technology role and that he believed that the Claimant’s expertise and experience would be valuable to the Respondent in the right role. He did not consider the DFS Order, the Respondent’s findings of misconduct, or the Employment Tribunal decision, together, were a bar on the Claimant being employed. Mr Jain would have fewer concerns if the Claimant was operating within a risk framework which had been set by others. Mr Jain did not say that he considered that trust and confidence had broken down between the Respondent and the Claimant. Mr Jain is an extremely senior employee of Barclays, being the Chief Technology Officer for a Division which employs 25,000 people.[127]The Claimant said that he did wish to be considered for the role of Developer Experience, if appointing another candidate did not render this impracticable. He accepted that Mr Jain had offered the role to another person. The Claimant said that, while Mr Jain had said he did not believe that the Claimant had the relevant skills, the Claimant thought that Mr Jain had not understood his pitch for the position, or the breadth of the Claimant’s technology experience. The Claimant accepted that Mr Jain said that he would not invite the Claimant for interview in good faith, on the information that he had. Reengagement - Individual Roles – Data Commercialisation Manager, Hiring Manager Mr Lewis[128]Grant Lewis is Director of Payment Processing and is the recruiting manager for a new vacant role of Date Commercialisation Director. Mr Lewis told the Tribunal that the recruitment process for the post was fairly advanced and that 3 candidates, out of an initial pool of 12, were at the final assessment stage. All 3 candidates had been seen and Mr Lewis was waiting for the last tranche of feedback. He said that, if that last tranche of feedback confirmed the proposed recommendation, then he would finalise an “HR values interview”, after which a recommendation would be made; he hoped that the approval process would be completed in weeks.[129]It was clear that, as of Thursday 19 July 2018, a final recommendation had not yet been made, an HR values interview had not yet been held and the approval process would still take weeks to conclude (albeit not months).[130]Mr Lewis said that the successful candidate for the Director Data Commercialisation role would be a junior Director within the Barclaycard card and payments business area, reporting directly to him. The person hired would be responsible for recruiting one team member, who would be their sole report. The total compensation to be offered to the successful candidate would be £130,000 - £170,000. Mr Lewis said that there was clearly a significant difference between the compensation the Claimant had last received from the Bank and the compensation he would receive for that role. Mr Lewis was concerned that the Claimant working as a junior Director would not work well in practice, as it would be a significant step down.[131]Mr Lewis said the role involved understanding and assessing the Bank’s data to develop and implement strategy and create propositions to drive value from the data for the Bank’s merchants and the Bank. This required significant data analytics experience with an ability to take a strategic view of payment eco systems and create new commercial propositions. Mr Lewis said that, while the Claimant might have experience in some elements of the skill set required for the role, it was unclear to him whether the role sat squarely within the Claimant’s fields of expertise. He said that, for that reason, as well as concerns as to the difference between seniority and compensation of this position against his last position, Mr Lewis would not invite the Claimant to interview.[132]Mr Lewis said that, although the US elements of the role would initially be limited, his intention was to expand the scope of the role in the future to include analysis of data deriving from card transactions in the US. He said that, in his view, the role would then involve US operations. Mr Lewis also said that the data commercialisation role involved processing a significant amount of personal data, so that it was key for the person holding the role to protect the Bank against the risks under applicable data protection legislation. He said that he understood from the Tribunal’s judgment that the Claimant had been found to have been to a limited extent culpable and blameworthy for failing to protect the Bank against serious risks. Mr Lewis said: “I would therefore have some concerns about Mr Fotheringhame sufficiently protecting the Bank against those risks which would be a requirement of this role.”[133]In cross-examination Mr Lewis said that the Claimant’s skills in relation to Artificial Intelligence and machine learning were highly relevant to the Bank’s requirements and were in demand and that the Claimant could, in Mr Lewis’ opinion, work in the Bank’s data analytics teams and in data science roles. Mr Lewis said that the Claimant clearly had data and IT experience which would be of interest to the role, but that he was not clear whether those would translate to data commercialisation.[134]The Claimant was cross-examined about whether he still sought to be reengaged into various roles. He said, initially, with regard to the Director of Data Commercialisation, that he was not sure. When it was put, in cross examination, that Mr Lewis had said that recruitment to the role was at an advanced stage and an offer would soon be made to another candidate, the Claimant said he did not seek to be reengaged to the role. The Employment Judge indicated that it was not necessarily the case, under statute or case law, that selecting another candidate for a vacant role rendered it not practicable to re-engage another employee into the role. The Claimant the said that, if appointing a permanent replacement rendered it not practicable to reengage him into the role, then he accepted he could not be reengaged into it; but, if appointing another candidate did not mean it was impracticable to reengage him into the role, then he would like to be considered for the role.[135]The Claimant said that there were some similarities and some differences between the Claimant’s previous role as Head of Automated Flow Trading in eFICC and the Director Data Commercialisation role. He agreed that the corporate grade and compensation were different, but said that there were similarities in relation to the technology and data analysis skills required. The Claimant agreed that re-engaging him to Data Commercialisation role would involve a significant step down, in terms of grade and responsibility for people.[136]The Claimant did not accept that the Data Commercialisation role would involve $ US functions and said that Mr Lewis had simply said that, at some point in the future, it could. In any event, the Claimant said that he did not accept that analysing card data related to $US operations. He said that the Respondent was trying to expand the prohibition in the DFS Order to cover all jobs in the Bank. Reengagement - Individual Roles – Head of Macro Electronic Trading and Markets Analytics Technology, Hiring Manager Mr Anderson[137]Mr Eric Anderson is employed as Pre-Trade Technology Lead, with the corporate grade of Managing Director, and is the hiring manager for the post of Head of Macro Electronic Trading and Markets Analytics Technology, a senior global role within the Chief Operating Office and functions business, with the corporate grade of Managing Director. He told the Tribunal that the role involved managing a team of around 200 developers and was responsible for designing, architecting, enhancing and developing the credit FX and algorithmic trading systems in the business. He said he expected the total annual compensation for the role to be around £700,000.[138]Mr Anderson told the Tribunal that he had been recruiting to the role because the previous post holder had been absent, on long-term sick leave. However, the postholder had recently come to the office and was going to discuss returning to the role in September 2018. A phone call in this regard with Human Resources was scheduled to take place in the week beginning 23 July 2018. Alternatively, Mr Anderson said that he had a preferred individual candidate, who had passed through the key stages of the recruitment process to date.[139]Mr Anderson gave evidence that the Head of Macro Electro Trading and Markets Analytics Technology position would be an extremely technical, technologyfocused role. It was not a trading role. Mr Anderson’s technology team is responsible for designing and maintaining trading systems. Mr Anderson said that, from his understanding, the Claimant had some skills which were relevant to the role, in particular the MSc he had completed in machine learning and his experience in computer programming, but that his practical experience was insufficient to make him a suitable candidate for the vacancy.[140]Mr Anderson said that the role would comprise duties, responsibilities and activities involving FX benchmarks, since it involved trading platforms. The relevant person would also have significant involvement with Barclays’ US and US Dollars operations. Almost all trading platforms for which the role would be responsible would involve US Dollar trading and/or trading on the US markets. Reengaging the Claimant to that role, therefore, would be in breach of the DFS consent order.[141]The Claimant told the Tribunal that, while the Head of Macro Electronic Trading and Markets Analytics Technology role was a technology focused role, his previous role had been very technology focused. While his previous role had been characterised as a trading role, the Claimant had never made a single trade in it.[142]The Claimant acknowledged that reengagement into the Head of Macro Electronic Trading and Markets Analytics Technology role would breach the DFS Order. He said that the DFS Order would need to be renegotiated in those circumstances. Reengagement - Individual Roles – BI Innovation Coverage Officer, Hiring Manager Mr Stecher[143]John Stecher is employed by the Respondent as Group Head of Innovation and Chief Innovation Officer and is the hiring manager in relation to the BI Innovation Coverage Officer, which has a corporate grade of Director.[144]Mr Stecher told the Tribunal that another candidate has now been offered the role, has resigned from his current position in another investment bank and is due to start at Barclays on 10 September 2018. Mr Stecher said that the BI Innovation Coverage Officer role involves working with the Bank’s market division and external technology providers, to explore and define the future software tools that the Bank should develop for use internally and by clients of the markets business. The holder of the position would then work with the Bank’s engineering team to develop the relevant software. The person hired into the role would report to Head of Markets Innovation and would have two direct reports at Vice President Corporate grade. The role would attract annual compensation of between $500,000 and $600,000.[145]Mr Stecher said that the Claimant would be well qualified for the role, given his experience in the markets business and technology operations. On the basis of the Claimant’s technical experience alone, he would invite the Claimant for interview.[146]In oral evidence, Mr Stecher said that he felt that the Claimant was a good technical fit for the role and that Mr Stecher had no issues with employees stepping down in pay, or taking a step back in their career. He said, however, that the role would involve dealing with individuals in the Bank’s market business. The two main criteria he would apply in appointing to the role were, first, technical skills and, second, interpersonal trust with clients. He said that, when he considered the Claimant’s history, he felt that there was a gap with regard to the second. The preferred candidate who had been offered the role had no such history and had a great relationship with clients.[147]Mr Stecher told the Tribunal that, on aspects of client trust, the Claimant would rank below other candidates. Mr Stecher said that he could envisage the Claimant being hired into a different role where the Claimant had a head start over other candidates in terms of skills and where the Claimant’s history did not preclude him from being appointed. He said that the Claimant’s history would one of the inputs into the equation. Mr Stecher said that he did not believe that the Claimant was unappointable to a role in the Bank. Mr Stecher had simply ranked the candidates for this particular[148]Mr Stecher said that, given that the DFS Order prohibited the Claimant from holding any roles involving FX benchmarks or any matter relating to US or US Dollar operations, this would prevent the Claimant from being appointed to the post of BI Innovation Coverage Officer. That post would be based in New York and would be responsible for developing products for, and working with clients of, the global investment banking business. The holder of the role would therefore be materially involved in the Bank’s US operations, given that the US was such an important centre for the Bank’s investment banking business. Mr Stecher said that it would be impossible to redesign the role in such a way that it did not involve US and US Dollar operations.[149]The Claimant said that the role was well within his domain of expertise. He said that other employees, including Mr Bill White, had been responsible for lots of the Barclays business which had been criticised by regulators, and had remained in post. The Claimant was thus confident that he would be able to undertake the client liaison and ambassadorial responsibilities involved in the BI Innovation Coverage Officer role.[150]The Claimant accepted that appointment to the BI Innovation Coverage Officer role would involve a breach of the DFS Order. He said that the Order would have to be renegotiated. Relevant law Ss 112 – 115 Employment Rights Act 1996 121 If the complainant expresses such a wish, the Tribunal may make an order for reinstatement or re-engagement: s112(3), 113 ERA 1996. An order for reinstatement is an order that the employer shall treat the complainant in all respects as if he had not been dismissed: s114(1), ERA 1996. An order for re-engagement is an order, on such terms as the Tribunal may decide, that the complainant be engaged by the employer, or by a successor of the employer, or by a successor of the employer or by an associated employer, in employment comparable to that from which he was dismissed or other suitable employment: s115(1), ERA. 122 On making an order for re-engagement, the Tribunal shall specify the terms on which re-engagement is to take place, including(a) the identity of the employer,(b) the nature of the employment,(c) the remuneration of the employment,(d) any amount payable by the employer in respect of any benefit which the complainant might reasonably be expected to have but for the dismissal,(e) any rights and privileges which must be restored to the employee, and(f) the date by which the order must be complied with: s115(2), ERA. s 116 Employment Rights Act 1996 123 In exercising its discretion under s 113 ERA 1996, the Tribunal shall first consider whether to make an order for reinstatement and in so doing shall take into account (a) whether the complainant wishes to be reinstated, (b) whether it is practicable for the employer to comply with an order for reinstatement, and (c) where the complainant caused or contributed to some extent to the dismissal, whether it would be just to order his reinstatement: s116(1), ERA. 124 If the Tribunal decides not to make an order for reinstatement it shall then consider whether to make an order for re-engagement and, if so, on what terms: s116(2)ERA. 125 In so doing, the Tribunal shall take into account (a) any wish expressed by the complainant as to the nature of the order to be made, (b) whether it is practicable for the employer (or a successor or any associated employer) to comply with an order for re-engagement, and (c) where the complainant caused or contributed to some extent to the dismissal, whether it would be just and equitable to order his re-engagement and (if so) on what terms:s116(3),ERA. 126 Where in any case an employer has engaged a permanent replacement for a dismissed employee, the Tribunal shall not take that fact into account in determining, for the purposes of subsection (1)(b) or (3)(b), whether it is practicable to comply with an order for reinstatement or re-engagement: s116(5), ERA. Interpretation - Caselaw 127 The legislation is not designed to enable complainants to re-establish or vindicate their reputation or anything of that kind. It is concerned with whether they were fairly or unfairly dismissed and once a conclusion is reached that they were unfairly dismissed, the question is how reasonably and most sensibly to compensate the unfairly dismissed employee, Nothman v London Borough of Barnet [1980] IRLR 65 [A/4], per Ormrod LJ at [5]. 128 Reinstatement requires the employer to treat the complainant in all respects as if he had not been dismissed: s114(1)ERA. It places the Claimant into the same job with the same contractual rights on the same terms and conditions of employment from which he was dismissed. The Tribunal has no power to order reinstatement in terms which alter the contractual terms of the Claimant’s employment: McBride v Scottish Police Authority [2016] ICR 788, per Lord Hodge at [34]-[35]. 129 An order for re-engagement, by contrast, may involve a change in the identity of the employer, the nature of the employment or the terms as to remuneration, per Simler J in British Airways plc v Valencia [2014] IRLR 683 at paragraphs 25 and 26. 130 An order for re-engagement can be made that the employee be reengaged by the employer into employment comparable to that from which the Claimant was dismissed or other suitable employment. 131 The definition of suitability has been considered in relation to suitable alternative employment in the context of redundancy. The question is whether the employment is suitable in relation to the Claimant, which requires asking whether it suits his skills aptitudes and experience. The whole of the job must be considered, not only the tasks to be performed, but also the terms of employment, especially wages and hours, and the responsibility and status involved: Bird v Stoke-On-Trent Primary Care Trust, UKEAT/0074/11, per Keith J at [18]. 132 The Tribunal must identify specifically and with precision the role into which an employer is ordered to re-engage the complainant: Lincolnshire County Council v Lupton [2016] IRLR, per Simler J at [22]. 133 The Tribunal must take account of the three factors identified in s 116(1) and (3), namely the Claimant’s wish, practicability and justice (where there is contributory fault). 134 The practicability of reinstatement or re-engagement is to be determined as at the date it takes effect. In practice, absent any very unusual circumstances, that will mean judging the position as at the remedy hearing date: Rembiszewiski v Atkins Ltd UKEAT/0402/11, per Slade J at [39]. 135 Practicable in this context means more than merely possible but ‘capable of being carried into effect with success’. It is the duty of the Tribunal to consider the employment realities of the situation: Coleman v Magnet Joinery Ltd [1975] ICR 46, per Stephenson LJ at 52B-H. 136 Re-engagement is not to be used as a means of imposing a duty to search for and find a generally suitable place within the ranks for a dismissed employee irrespective of actual vacancies: Cold Drawn Tubers Ltd v Middleton [1992] IRLR 160, per Tucker J at [15], [23]; Lincolnshire CC v Lupton [2016] IRLR 567, per Simler J at [18]. 137 Re-engagement may be impracticable where the employer genuinely believes the employee was guilty of misconduct, even though a Tribunal found they did not have reasonable grounds on which to base that belief and had not carried out a reasonable investigation: ILEA v Gravett [1988] IRLR 497 at [21]; Wood Group Heavy Industrial Turbines Ltd v Crossan [1998] IRLR 680 at [10]. This is particularly the case where there are very real risks should the employee depart from the highest standards of care: ILEA v Gravett at [22]. 138 The remedy of re-engagement has very limited scope and will only be practicable in the rarest cases where there is a breakdown in confidence as between the employer and the employee. Even if the way the matter is handled results in a finding of unfair dismissal, the remedy, in that context, invariably will be compensation: Crossan at [10]. In that case, Mr Crossan had been dismissed following allegations that he had used and dealt drugs at work. The Tribunal had decided that his dismissal was unfair because the employer had not carried out a sufficient investigation into the allegations against him. 139 The question is: was it practicable to order this employer to re-engage this Claimant; it is the employer’s view of trust and confidence, appropriately tested by the Employment Tribunal as to whether it was genuine and founded on a rational basis, which matters, not the Tribunal’s: United Lincolnshire Hospital NHS Foundation Trust v Farren [2017] ICR 513, per Judge Eady QC at [40], [42]. 140 An employee’s lack of confidence in, or distrust of, his employer can be a relevant factor when deciding whether re-engagement is practicable or whether discretion should be exercised to make such an order: PLA v Payne at 570F-G; Rembiszewski, per Slade J at [46]. 141 An employee who feels that they are the victim of a conspiracy, and particularly by their employers, is not likely to be a satisfactory employee in any circumstances if reinstated or re-engaged: Nothman v London Borough of Barnet (No2) [1980] IRLR 65, per Ormrod LJ at [4]-[5]. 142 In King v Royal Bank of Canada Europe Ltd [2012] IRLR 280 EAT, the EAT (Richardson J presiding) said at paragraph 56: “In this case it is hardly surprising that the Claimant was aggrieved about the circumstances of her dismissal, and suspicious about the motives for it; the respondent’s failure to adopt any fair procedure … was liable to give rise to a sense of injustice and suspicion. It does not follow that it is not practicable to re-engage her. Nor do views expressed by an inexperienced litigant in person in the heat of litigation necessarily lead to this conclusion.” 143 In Oasis Community Learning v Wolff UKEAT/0364/12, the Claimant had made allegations of misconduct against the Respondent as an institution and members of its human resources department. He accused a colleague of having made “fabricated” evidence which raised the possibility of “collusion” between that colleague and another potential witness. He described the chair of the Respondent’s Board as: “having abrogated his responsibilities in order to allow the Respondent’s HR department to suppress evidence” and alleged that the Respondent had falsified documents in his witness statement. In correspondence the Claimant had described the Respondent’s conduct as constituting: “criminal contempt for justice and also the criminal offence of fraud”. 144 The EAT, per Underhill J, observed at [18], [23], [36]: “.. we cannot regard the allegations .. as egregious. No doubt the Claimant used some hyperbolic language, and we are very willing to assume that his allegations of forgery and fraud are ill-founded; but they appear to be over-reactions rather than wanton inventions. Anyone with experience of employment litigation knows how difficult it can be for an unrepresented party to maintain a sense of proportion, and it is very common for genuine differences of opinion or recollection to be as dishonest or innocent errors in documents to be treated as evidence of forgery. …Of course we appreciate that the importance of the Claimant’s allegations is principally because of the effect which it is said they had on the people who were subject to them..[18]..” “…. The fact that an employee has made serious allegations against colleagues or managers in one workplace will not have as much impact on the relationship which he will have with colleagues and managers at a different workplace..[23]..” ”…”Mr Jeans argued that the relevant relationship was not with a particular school but with Oasis [the employer] as an institution. While we accept that the Claimant did have a relationship with Oasis, it is inherently unlikely that any difficulties outside the sphere of those with whom he would have a regular working relationship would be such as to render his re-engagement “impracticable.” [36]. Terms of an Order of Reinstatement or Re-engagement 145 The terms of and order for reinstatement or re-engagement require that the employee receives back pay between the date of termination and the date of reinstatement or re-engagement, ss114(2)(a) & 115(2)(d) ERA 1996. 146 In determining back pay a Tribunal ought not to specify a lump sum, but instead 'should specify amounts payable by reference to rates of pay or other formulae so that appropriate calculations can be made when the date of any reinstatement is known'— per Lord Donaldson MR in O'Laoire v Jackel International Ltd [1990] IRLR 70, [1990] ICR 197, CA. 147 A Tribunal must reduce the employer's liability by giving credit for sums received by the employee in respect of the period between the date of termination of employment and the date of reinstatement or re-engagement by way of (a) wages in lieu of notice or ex gratia payments made by the employer; (b) remuneration in respect of employment by another employer; and (c) such other benefits as the Tribunal considers appropriate. 148 In Electronic Data Processing Ltd v Wright [1986] IRLR 8 at 8, EAT the EAT held that , in making an order for re-engagement, the Industrial Tribunal had not erred in holding that the amount payable by the employer, in accordance with s.69(4)(d) of the Employment Protection (Consolidation) Act, “in respect of any benefit which the complainant might reasonably be expected to have had but for the dismissal” for the period between the date of termination of employment and the date of re-engagement meant the benefit which would have accrued to the complainant if she had not been unfairly dismissed. The Industrial Tribunal had correctly calculated the amount payable by the employer, therefore, on the basis of the employee's earnings at the date when she was dismissed, rather than on what she would have earned if she had been reengaged as the Tribunal ordered. Discussion and Decision 149 In his evidence to the Tribunal and in his submissions, the Claimant was clear that he sought, either, reinstatement, or re-engagement, as the remedy for unfair dismissal in this case. He was clear that he would accept a Managing Director or Director role. The Employment Tribunal is required to consider reinstatement first, then re-engagement and then compensation. 150 The Claimant contended that compensation in this case would be a completely inadequate remedy for unfair dismissal. His financial loss has vastly outstripped the maximum award possible in ordinary unfair dismissal cases. The Respondent does not oppose the Tribunal ordering it to pay a maximum compensatory award of £78,962. It does not oppose an order for a basic award of £3,065.60 that is £3,832 less a 20% reduction for contributory fault. The Nature of a Reinstatement Order[151]The Claimant contended that he should be reinstated, either into his predismissal role Head of Automated Flow Trading eFICC, or into the role into which he would have been reorganised on the reorganisation of the Respondent’s FX business, or into his previous role as Head of e-FX Trading.[152]However, I was satisfied that the law requires that reinstatement must be into the same job, with the same contractual terms and conditions of employment, from which an employee was dismissed, so that the Tribunal has no power to order reinstatement on terms which alter the contractual terms of the Claimant’s employment.[153]There is a difference, as described by Simler J in British Airways plc v Valencia [2014] IRLR 683 at paragraphs 25 and 26, between an order for reinstatement which places the complainant into the same job on the same terms, and an order for re-engagement, which may involve a change in the identity of the employer, the nature of the employment, or the terms as to remuneration.[154]A reinstatement order does not require recreation of the precise factual conditions at the point of dismissal, but nevertheless there is a basic dichotomy between an order for reinstatement and an order for re-engagement.[155]While the Claimant argued that his contractual terms were very general in their requirement for the Claimant to do work, I considered that it had become a term of the Claimant’s employment that the Claimant was employed as Head of Automated Flow Trading eFICC. This was his job title at the time of his dismissal and he was required to carry out the duties and responsibilities assigned to that job role.[156]I accepted the Respondent’s evidence that that role no longer exists. I accepted Mr Hassett’s evidence that its responsibilities have been divided up between existing employees. The FX Trading aspects of the role have been subsumed into the role of Global Head of eFX and FX Spot Trading, held by Ed Falinski, who reports to Mr Hassett. The Claimant did not challenge Mr Hassett’s evidence on this.[157]As the role does not exist, I concluded that it would not be practicable to order the Respondent to reinstate the Claimant into that role.[158]Further, I could not “reinstate” the Claimant into the role into which he would have been reorganised, as this would not constitute placing the complainant into the same job on the same terms as he was employed in at the point of dismissal.[159]While the Claimant sought reinstatement to the role of Head of e-FX Trading, a role he held in 2010 to 2013, again, such an order would not be a reinstatement order because it would place the complainant into a different job to the one in which he was employed in at the point of dismissal. Reinstatement and Re-engagement: Practicability[160]When considering whether to make an order for re-engagement, the Tribunal must consider whether the complainant wishes to be re-engaged, whether it is practicable for the employer to comply with an order for re-engagement and, where the complainant caused or contributed to some extent to the dismissal, whether it would be just to order his re-engagement and if so, on what terms.[161]The Respondent made a number of submissions with regard to practicability. Some applied generally to the Claimant’s re-engagement/reinstatement and some applied to particular roles.[162]By s115 ERA 1996 an order for re-engagement is an order on such terms as the Tribunal may decide that the complainant be engaged by the employer in employment comparable to that from which he was dismissed or other suitable employment. The Respondent also made a number of arguments about the comparability and suitability of the 6 roles which remained vacant at the date of the Employment Tribunal hearing and which the Claimant had indicated he considered to be suitable and/or comparable employment for him.[163]I made some general findings with regard to practicability which I have set out first. Then I dealt with each of the individual roles to which the Claimant sought to be re-engaged, applying those general findings and further specific findings in relation to those roles. The Nature of a Re-engagement Order[164]The Claimant contended that the Tribunal should order that the Claimant be reengaged on the same flexible terms on which he was originally engaged in 2010.[165]He also contended that many Managing Director level jobs do exist in Barclays, even if they are not advertised. He argued that he had numerous skills which would be invaluable to Barclays and that the Tribunal should order the Respondent to re-engage him in a Managing Director role, but that it was not necessary to specify the role with precision.[166]The Claimant relied on Mr Cartledge’s evidence that the Claimant’s skill set was so extraordinary that Barclays could employ the Claimant successfully in some capacity.[167]The Claimant contended that that approach was supported by the case law in Rank Xerox (UK) Ltd v Strychzek [1995] 568, in which the EAT said: “It is in general undesirable for the Tribunal to recommend re-engagement in respect of a specific job, as distinct from identifying the nature of the proposed employment,” per HHJ Butter QC at [16].[168]However, in Lincolnshire County Council v Lupton [2016] IRLR 576, the EAT, per Mrs Justice Simler P said that, although Tribunals have a wide discretion as to the terms of an order for re-engagement, those terms must be specified with a degree of detail and precision. To simply require that re-employment must be to a comparable role is not adequate to identify specifically and with precision into what role an employer is ordered to re-engage the employee.[169]In Lupton at paragraph 18, Mrs Justice Simler, also said: “An employer does not necessarily have a duty to create space for a dismissed employee to be reengaged. The question at the end of the day is one of fact and degree by reference to what is capable of being carried into effect with success…”.[170]I agreed with the Respondent’s submissions that the comment on which the Claimant relied in Strychzek at [16] was obiter and expressed in general terms. Insofar as it is inconsistent with Lupton, the decision in Lupton was part of the ratio of the case. For those reasons, I would follow Lupton rather than Strychzek. Furthermore, I noted that Lupton is a more recent decision of the EAT.[171]I agreed with the Respondent that the effect of Lupton was that the Employment Tribunal could not make a generic, unspecific order, or an indicative order. I therefore considered that if, I were to make a re-engagement order, it needed to be into one of the roles which had been identified as existing in the Respondent’s structure at the time of the Tribunal hearing.[172]While I accepted the Claimant’s contention that most Managing Director jobs develop organically and are not advertised, I considered that I was constrained by caselaw to only order re-engagement to a specific role which had been identified with precision. Practicability of Reinstatement or Re-engagement – General Findings Respondent’s Trust and Confidence[173]The Respondent contended that it would not be practicable for it to comply with an order for reinstatement or re-engagement because, both, the Respondent had lost trust and confidence in the Claimant, and the Claimant had lost trust and confidence in the Respondent and/or had a hostile and highly critical attitude to both the Respondent and the DFS.[174]With regard to the Respondent’s trust and confidence in the Claimant, I concluded that, on the evidence before me, it was plain that at least two very highranking Managing Directors in the Respondent business had not lost trust and confidence in the Claimant. Both Mr Jain and Mr Stecher were clear that they considered the Claimant could potentially be employed by the Respondent in a role for which he had the requisite skills. They considered that the Claimant’s past regulatory history and disciplinary history would need to be taken into account in making a final decision as to whether the Claimant was appropriate for a particular role. Certainly, neither had reached the conclusion that the Claimant’s history or his attitude to the Respondent was a bar to him being employed.[175]The Respondent relied on the words of Mr Mahon and Mr Mbanefo, the disciplinary and appeal officers, in contending that the Respondent had lost trust and confidence in the Claimant. Mr Mahon said in his dismissal letter: “In summary therefore your actions are extremely serious and go directly to the relationship of trust and confidence between you and Barclays.” Mr Mbanefo similarly said: “In conclusion therefore I confirm that I agree with the disciplinary hearing manager’s decision that you were guilty of serious misconduct which went directly to the heart of the relationship of trust and confidence between you and Barclays.”[176]The Tribunal found that Mr Mahon and Mr Mbanefo believed that the Claimant was guilty of the misconduct described in their outcome letters. Nevertheless, the Tribunal also found that the Respondent acted unfairly in dismissing the Claimant and that, if it had acted fairly, it would not have dismissed him. While Mr Mahon and Mr Mbanefo believed what they wrote at the time, the Tribunal’s findings were that Mr Mahon’s and Mr Mbanefo’s determinations were so unreasonable as to go beyond the conclusions of a reasonable employer. Insofar as the Respondent relied on Mbanefo and Mr Mahon’s earlier findings that there had been a breakdown or trust and confidence between the Claimant and the Respondent, the findings were based on an unreasonable investigation and unreasonable evidence and I did not consider that those unreasonable beliefs made it impracticable for the Respondent to re-employ the[177]Furthermore, both Mr Mahon and Mr Mbanefo made concessions at the Tribunal liability hearing about evidence which, if they had seen or understood it at the time, would have affected their decisions. Mr Mahon: ET Judgment paragraphs [186], [189] – [191]; Mr Mbanefo: ET Judgment paragraphs [169]; [171]; [176]. I have heard no evidence from Mr Mbanefo or Mr Mahon as to their current beliefs, following the Tribunal’s liability Judgment, regarding breakdown of trust and confidence between the Respondent and the Claimant.[178]I noted the Mr Hassett’s evidence about lack of trust and confidence in the Claimant appeared to be specifically directed to reinstatement or reengagement of the Claimant as a senior employee with supervisory responsibility and within the Respondent’s FX business.[179]On all the evidence, I concluded that there had not been a breakdown in trust in confidence between the Respondent and the Claimant so that re-engagement was impracticable in any role. Certain, two very senior managers had not lost trust and confidence in the Claimant. Applying Farren, it was practicable to order this employer to re-engage this Claimant.[180]However, I considered that Mr Hassett’s evidence regarding trust and confidence was relevant to whether it would be practicable for the Claimant to be reinstated, or to be re-engaged in a senior role in the FX business. Mr Hassett gave sensible, measured and relevant reasons for his lack of trust and confidence in the Claimant in carrying out such roles. I accepted his evidence and decided that Mr Hassett, Head of the FX business, would not have trust and confidence in the Claimant if he were to be reinstated or re-engaged into the FX roles which the Claimant identified. Claimant’s Conduct and Attitude[181]I noted the words of Ormrod LJ in Nothman at paragraph 4: “It is only right to say that anyone who believes that they are a victim of conspiracy, and particularly by their employers, is not likely to be a satisfactory employee in any circumstances if reinstated or re-engaged.” Further, I took into account the words of Wood J in Rao v Civil Aviation Authority cited with approval by Lord Justice Neil in PLA v Payne at page 570f to g: “factors which have influenced decisions in the past are: … the fact that the employee has displayed her distrust and lack of confidence in her employers and would not be a satisfactory employee on reinstatement”. I also noted the words of Johnson in Crossan at paragraph 10: “We consider that the remedy of re-engagement has very limited scope and will only be practical in the rarest cases where there is a breakdown in confidence as between the employer and the employee.”[182]Mr Goudling QC for the Respondent conducted a skilful and thorough crossexamination of the Claimant regarding the Claimant’s attitude to the Respondent, the DFS, the Respondent’s Human Resources, Compliance and Legal Officers. The Claimant’s evidence has been set out in this Judgment.[183]From that I evidence, I concluded that the Claimant does not believe that there is a conspiracy against him, or that the Respondent is part of one. I considered that the Claimant was rational in his explanations of the criticisms he made of the Respondent’s lawyers and individual officers employed by the Respondent.[184]I accepted his evidence that he had not lost trust and confidence in the Respondent, in general, but that he was critical of individuals.[185]I noted the cases of King v Royal Bank of Canada Europe Ltd [2012] IRLR 280 and Oasis Community Learning v Wolff UKEAT/0364/12. I considered that, given the liability judgment in the present case, as in King, it was hardly surprising that the Claimant was aggrieved about the circumstances of his dismissal, and suspicious about the motives for it. I considered that the Claimant’s criticisms of the Respondent’s allegations and findings against him were, in many respects, upheld by the Employment Tribunal’s judgment. Furthermore, the Claimant had succeeded in obtaining specific disclosure of documents after a contested preliminary hearing on the subject. Those documents turned out to be relevant to the Tribunal findings at the liability stage. I considered that the Respondent’s failure to adopt a fair procedure and to disclose relevant documents to the Claimant was liable to give rise to a sense of injustice and suspicion. It did not follow that it was not practicable to re-engage him.[186]As in Oasis Community Learning v Wolff , I considered that it was appropriate to recognise that the Claimant was a litigant in person and that he had undoubtedly undergone a great deal of stress and distress following the DFS Order and through the disciplinary proceedings, his subsequent dismissal and conduct of lengthy and closely contested Employment Tribunal proceedings. It was not surprising that he had expressed his frustration and distress regarding the things that had happened to him.[187]Nevertheless, I considered that the Claimant had presented, both at the liability and remedy hearing, as a highly rational individual. In cross examination at the remedy hearing, he made appropriate concessions and said he would reword some of his criticisms of the Respondent and the DFS; he expressed sympathy for the Respondent. I accepted his evidence that he had worked with the Respondent’s Compliance and Legal Departments in the past without difficulty and would do so again. I accepted his evidence that he had criticised specific behaviours and individuals, with justification, rather than making vindictive, or vexatious assertions.[188]Further, I accepted the Claimant’s evidence that the Respondent’s own core values stipulate that employees are expected to challenge things they believe to be wrong and to be open to challenge from others (p.768). Mr Hassett agreed with the Claimant’s assertions in this regard. That was relevant to the effect the Claimant’s criticisms of the Respondent would be likely to have on the Respondent, if it was abiding by its own principles.[189]Taking into account Oasis Community Learning v Wolff, I accepted the Claimant’s evidence that his difficulty in working with Mr Mahon in the future is not relevant to the practicability of his re-employment given that Mr Mahon is no longer in the business. I also accepted his evidence that he is unlikely to come upon the particular US lawyer who the Claimant considers harassed and humiliated him in an unprofessional manner.[190]I considered that the Claimant’s beliefs are rationally and genuinely held but also that his criticisms were not directed to the Respondent as a whole, nor to any of the individual managers or senior managers by whom he would be directly employed if he were to be re-engaged.[191]As a result, in summary, neither Mr Mahon or Mr Mbanefo’s views of trust and confidence in the Claimant, nor the Claimant’s beliefs and attitudes towards the Respondent made it, in my view, impracticable for this Respondent to re-engage this[192]With regard to the Claimant’s criticisms of the DFS, I accepted the Claimant’s evidence that other senior employees at the Bank had criticised regulators in the past but that this had not led to the Respondent losing trust and confidence in them. I accepted his evidence that he worked cooperatively with the regulators regarding Last Look. Ms Kates corroborated the Claimant’s evidence in this regard. In any event, the Claimant’s comments regarding the DFS would only be of real relevance to roles in which the Claimant was likely to be subject to DFS regulation. I did not consider that the Claimant’s criticisms of the DFS made it impracticable for the Respondent to reengage him. Effect of the DFS Order[193]The DFS Order is plain in its terms. The Claimant accepted that the Head of Developer Experience role, the Global Head of FX platforms role, the BI Innovation Coverage Officer role and the Head of Macro Electronic Trading and Markets Analytic Technology role all involved activities which came within the prohibition in the DFS Order. He accepted that the Respondent would be in breach of the DFS Order if it reengage the Claimant into any of those roles.[194]The Claimant contended that the DFS Order could nevertheless be renegotiated. He pointed to the evidence of Mr Mahon in another case in front of this Tribunal and this judge, Mr C Ashton v Barclays Capital Services case number 3202066/2015. In that case, Mr Mahon had said, in evidence, that the DFS could not compel the bank to dismiss employees, who still had the benefit of local employment law. He said that he would not have agreed to hear Mr Ashton’s appeal if he knew that the bank could not change its decision. Mr Mahon said that, if the Bank reached a different decision to the relevant regulatory body and simply ignored the order of the regulatory body, then the body could withdraw the Bank’s licence. However, in Mr Mahon’s experience, further negotiations between the Bank and the regulators would ensue.[195]The Claimant therefore argued that, while reinstatement / re-engagement would be in breach of the DFS Order, in reality, what would then happen would be that the Bank would renegotiate the Order with the DFS.[196]It was correct that in two separate cases, Mr C Ashton v Barclays Capital Services and the present case, the dismissing and appeal officers – and, in particular, Mr Mahon himself, who was a witness in both cases – assured me that the fact that a Regulator required Barclays to terminate an employee’s employment did not mean that dismissal was a foregone conclusion; and that the bank could nonetheless have decided not to dismiss, after a fair disciplinary procedure. I accepted that evidence in both cases. If the evidence was correct, then it must follow that the Respondent did not consider that the DFS Order barred the continued employment of the relevant individual. Renegotiation or other steps must still be open to the Bank.[197]Nevertheless, I considered that the DFS Order was, at the current time, valid, and that, pursuant to it, the Bank was prohibited from employing the Claimant in a role which assumed duties, responsibilities or activities involving compliance, FX benchmarks, or any matters relating to US or Dollar operations. Pursuant to the terms of the Order, the Bank would be exposed to further sanctions if it breached the Order, including, potentially, the revocation of its licence.[198]There was no evidence that a negotiation with the DFS would necessarily be successful, or would reach any particular conclusion. There was no evidence that the Bank had approached the DFS, or had attempted to change the Order to date.
Relevant Law
[199]I accepted Mr Hassett’s evidence that the Bank takes its regulatory obligations extremely seriously and that it needs to work with its regulators.[200]I reminded myself that “practicable” in this context means more than merely possible but, ‘capable of being carried into effect with success’. It is the duty of the Tribunal to consider the employment realities of the situation: Coleman v Magnet Joinery Ltd [1975] ICR 46, per Stephenson LJ at 52B-H.[201]While renegotiation of the DFS Order was a possibility, it was not more than that.[202]I considered that it was not practicable for the Respondent to re-engage the Claimant into any role which would breach the DFS Order and would therefore expose the Bank to further regulatory sanctions. The gravity of the risk to which the Bank would be exposed by breaching the Order meant that I could not conclude that reinstatement or re-engagement of the Claimant into such a role was capable of being carried into effect with success. Justice[203]The Respondent contended that it would not be just, in any event, to order reinstatement or re-engagement and that the Employment Tribunal should give significant weight to the fact that the Claimant had been criticised by the DFS and identified in the DFS Order, which had necessarily resulted in damage to his reputation and that of the Bank. The DFS Order is one of public record and widely reported.[204]Furthermore, the Respondent highlighted the Tribunal’s liability judgment findings at, paragraphs [319] to [321], which concluded that the Claimant’s contributory fault was serious, given the regulatory context, the $150m penalty imposed on the Respondent, the Claimant’s seniority, his responsibility for failing to protect the Respondent from the serious risks, and that his failures were culpable and blameworthy and did contribute to the dismissal. The Respondent said that it would not be just to require the Respondent to re-employ the Claimant where he had contributed to $150m sanction against it. The Respondent said that it would inevitably damage the Respondent’s business to have to re-employ the Claimant. Employment against that background would offend against common sense, would be unreasonable and unfair.[205]I decided that the liability judgment should also be considered as a whole. It was to be borne in mind that the Tribunal concluded that the Claimant contributed to his dismissal by only 20% - and that, if the Respondent had acted fairly, it would not have dismissed the Claimant. Given the finding of substantive unfairness in this case and the small degree of contribution found by the Tribunal, it was not necessarily unjust to order reinstatement or re-engagement. Indeed, the finding that, if the Respondent had acted fairly, it would never have dismissed the Claimant from employment in the first place, might suggest that reinstatement / re-engagement would be the just outcome.[206]The fact of the DFS Order and the Tribunal’s findings on contributory fault were clearly relevant factors to be taken into account in exercising the Tribunals’ discretion regarding reinstatement or re-engagement, but I did not consider that they meant that it was unjust to re-engage the Claimant at all. Certification of the Claimant as Fit and Proper[207]It was clear from the Respondent’s evidence that the decision as to whether to certify the Claimant as a fit and proper person for a particular role would be taken by the line manager who would have responsibility for recruiting into that role. The line manager would do so, taking advice from the Respondent’s Compliance, Human Resources and Legal departments, as appropriate.[208]I found Michelle Kates’ evidence to be rather difficult to rationalise. On the one hand, she asserted with confidence her view that the Bank would not be able to certify the Claimant as fit and proper and/or registered and that he could not return to work in any certified role at the Bank, or any role which was subject to similar requirements imposed by a regulator in another jurisdiction. This notwithstanding, in crossexamination she repeatedly retreated behind her assertion that it would ultimately be for the line manager to decide.[209]It seemed to me that the FCA Handbook guidance empathically did not say that a regulatory finding against an individual – or any other relevant matter listed in the guidance – operated as a bar to them being certified. I agreed with the Claimant that the FCA guidance makes clear that, for example in the case of a criminal conviction, the duty of the employer, as of the FCA, is to consider that conviction in its relationship to the particular job.[210]I further agreed with the Claimant that the “Factual Background” set out in the DFS Order which gave rise to the agreed statement that the Bank had conducted banking business “in an unsafe and unsound manner” appeared to be erroneous on the facts as found by the ET, or and/or appeared to be practices which are still applied in the operation of Last Look. One example is the fact that Last Look is applied to all clients. I considered that the tenor of the guidance from the FCA required the Bank to consider the Claimant’s explanation for the DFS Order and relevant legitimate criticisms of it.[211]The guidance from the FCA is that relevant factors have to be considered in relation to the particular job. I did not accept Ms Kates’ evidence, therefore, that the Bank could not certify the Claimant as a fit and proper person for any of the 3,500 roles which are subject to the certified person regime. I considered it very unlikely that Ms Kates was so familiar with the requirements of each role that she would be able to judge that the DFS Order, misconduct findings and the ET judgment, together, would have such a relevant and significant impact on the Claimant’s ability to do the roles that he could not be certified as fit and proper for any. Ultimately, as the Respondent’s witnesses said, the decision would be one for the individual hiring manager assessing the Claimant’s suitability for the individual role. Individual roles – Application of s116 ERA 1996 Head of Automated Flow Trading eFICC / Head of e-FX / Role “Into Which the Claimant Would have been Reorganised”[212]The Claimant wanted to be reinstated or re-engaged into these roles. They were all either the same as, or comparable to, the job he was performing when he was dismissed.[213]However, I concluded that I could not order “reinstatement” into either the Head of e-FX or the “role into which the Claimant would have been reorganised” because this would not constitute placing the complainant into the same job on the same terms as he was employed in at the point of dismissal.[214]I also concluded that it would not be practicable to order the Respondent to reinstate the Claimant to the role of Head of Automated Flow Trading eFICC because it does not exist.[215]The Claimant accepted in evidence that, if he were reinstated or re-engaged into any of these roles, the Respondent would be in breach of the DFS Order. Given my findings that it would not be practicable for the Respondent to re-employ the Claimant into a role in breach of the DFS Order, I did not consider it would be appropriate for the Claimant to be re-employed into any of these roles, in any event.[216]Further, while I did not accept Ms Kates’ blanket assertion that the Claimant could not be certified as “fit and proper” for any regulated role in the Bank, I did accept Mr Hassett’s measured and thoughtful evidence that he would not certify the Claimant as “fit and proper” for these specific roles. The Claimant agreed that Mr Hassett held the view that he could not certify the Claimant as a fit and proper person in good faith.[217]In addition, I accepted Mr Hassett’s evidence that he, personally, and other FX colleagues and clients, would not have trust and confidence in the Claimant carrying out a senior role in the FX business. The Claimant agreed in evidence that Mr Hassett did not want to take the risk of employing the Claimant in the role of FX Platforms and that Mr Hassett held that view in good faith.[218]For all those reasons I concluded that it would not be practicable for the Respondent to comply with an order for reinstatement or re-engagement into any of the FX roles sought by the Claimant.[219]Furthermore, given the ET’s findings on contributory fault, I concluded that it would not be just to order the Respondent to reinstate or re-engage the Claimant to a role which was directly comparable to his Head of Automated Flow eFICC, with all the fixed and discretionary compensation attached to it. While the contributory fault finding of 20% was relatively limited, it was not trivial. The Claimant’s previous role had elevated status within the Bank, weighty responsibilities and commensurate compensation. I considered that it would not be just to order the Bank to re-engage or reinstate into a corresponding role where the Claimant had failed to discharge his previous responsibilities in a more than minor way. Head of Developer Experience - Hiring Manager Mr Jain[220]The Claimant wished to be re-engaged into the Head of Developer Experience role. He said that he was suitably qualified for it, having had 25 years’ experience in software development, 17 of which had been in finance. He had worked in, and then led, numerous development teams; he had been a hands-on developer, cutting code for 10 years of his career in finance. The Claimant said that he understood the competing constraints operating on developers in investment banks generally and in Barclays specifically and understood the role from the perspective of being a key business user of in-house built technology.[221]However, I accepted Mr Jain’s evidence that the Claimant did not have the right skill set for the Head of Developer Experience role and that the Claimant’s practical experience in software development was too narrowly focused. The Claimant’s area of specialisation had been in electronic trading platforms within the FX business. Mr Jain was looking for candidates with significant recent technical experience in developing software in a modern way and, in particular, individuals who had worked in Silicon Valley. I accepted that Mr Jain would not invite the Claimant for interview for the role. I found that Mr Jain’s opinion was an informed one, in that he had known the Claimant and his work at Barclays and had a good understanding of the Claimant’s previous role. I found Mr Jain to be an honest and fair-minded witness. The Claimant accepted that Mr Jain had given his evidence in good faith.[222]I therefore concluded that it would not be practicable for the Respondent to comply with an order to re-engage the Claimant into the Head of Developer Experience role – the Claimant does not have the right skill set to do the job. BI Innovation Coverage Officer role – Mr Stecher; Head of Macro Electronic Trading and Markets Analytics Technology role – Mr Anderson[223]The Claimant sought re-engagement into both these roles.[224]I accepted Mr Stecher’s evidence that it would not be possible to redesign the BI Innovation Coverage Officer role in such a way that it did not involve US and US Dollar operations. Mr Stecher’s evidence on this was not challenged by the Claimant in cross-examination.[225]Similarly, I accepted Mr Anderson’s evidence that the Head of Macro Electronic Trading and Markets Analytics Technology role would comprise duties, responsibilities and activities involving FX benchmarks, US and US Dollar operations; Mr Anderson’s witness statement at paragraph 13. The Claimant accepted this.[226]It would not be appropriate to order the Respondent to re-engage the Claimant into either of these roles because it would not be practicable for the Respondent to comply with such an order, in breach of the DFS Order. I refer to my findings in this regard, above. MD Technology Banking – Hiring Manager, Mr Braham[227]The Claimant confirmed both in cross-examination and in submissions that he no longer wished to be re-engaged to this role. He did not challenge Mr Braham’s evidence that the Claimant did not have the requisite experience to be successfully employed in that role. Director Data Commercialisation[228]The Respondent contended that the Claimant said that he did not wish to be reengaged into the role of Director Data Commercialisation.[229]However, the Claimant did wish to be re-engaged by the Respondent in any suitable capacity in a Director or Managing Director role.[230]Further, when the Employment Judge explained that it was not her understanding of the law that, because a vacancy was being recruited to, there was a bar on re-engagement, either under s116(5) ERA 1996 or at common law, the Claimant said that he did wish to be re-engaged into the role. He maintained this in his submissions to the Tribunal and I concluded that he did wish to be re-engaged into the Director Data Commercialisation role. Even if he did not, because he believed another employee was being recruited to it, the Claimant’s wish was simply one factor to be taken into account. I[231]I considered, first, whether the role of Director Data Commercialisation was comparable to that from which the Claimant was dismissed. I decided that it was not. It was a junior Director role, reporting directly to Mr Lewis who holds the corporate grade of Director. The Claimant’s previous corporate grade was Managing Director. Further, the Director Data Commercialisation would be responsible for recruiting one team member, who would be their sole report. The Director Data Commercialisation would be paid between £130,000 and 170,000 total compensation, which was not comparable to the compensation of the Head of Automated Trading within eFICC which attracted a total compensation in excess of £1m per year.[232]Mr Lewis said that he considered that he would not invite the Claimant for interview because of his concerns about the Claimant not being fulfilled in a junior Director role. I noted that Mr Stecher, a much more senior employee, whose views I considered to be more authoritative, said that he had no problem with people taking a step back in their career. Moreover, the Claimant is applying for a job in a competitive interview process. Re-engagement is different. I accepted the Claimant’s evidence that he would be happy to work in this grade or this pay. It would be a change of direction for him. It might well be appropriate for an employee to take a pay cut when pursuing a new line of employment, to which they are not bringing recent practical experience.[233]I accepted the Claimant’s evidence that he was well qualified to carry out this role. I accepted his evidence, corroborated by his curriculum vitae, that he has considerable academic and working experience of analytics and statistical analysis. I noted Mr Cartledge’s evidence that, given the Claimant’s skill set, Mr Cartledge was confident that the Claimant would be of value to the Bank. I noted other Respondent witness evidence that employees do move between Divisions in the Respondent on a relatively regular basis; for example, between technology and trading departments, or quantitative analysts to trading.[234]I therefore decided that, although the Director Data Commercialisation role was not comparable to the Claimant’s previous role, it was suitable employment under s115(1) ERA 1996.[235]The Director Data Commercialisation role is currently vacant. Mr Lewis’ evidence was that, on Thursday 19 July 2018, the last set of feedback from interviews had not yet been received, that there would still have to be an HR interview arranged and that the approval process would take weeks. It was quite clear from that evidence that, at the date of the remedy hearing, the post was vacant and would not be finally recruited to for a number of weeks. The recruitment process did not prevent it being practicable for the Respondent to comply with an order for re-engagement of the Claimant into the role of Director Data Commercialisation.[236]The Tribunal process in this case involved the Respondent notifying the Claimant of vacant Managing Director/Director roles, Claimant identifying potentially suitable ones, the parties exchanging witness statements as to whether those roles would be suitable and practicable for re-engagement, and the Tribunal making a determination on the subject. The necessary passage of time involved, combined with the Respondent’s decision to continue actively recruiting to those vacant roles, could well mean that all roles initially identified would be filled by the Respondent by the end of the Tribunal process. It would be a matter of concern if all possible avenues of reengagement were said to be impracticable because a Respondent chose actively to recruit to vacant roles, and therefore to fill them, while the Tribunal remedy process was ongoing. As a result, in any event, I would not conclude that the Respondent’s recruitment process for the Director Data Commercialisation role rendered it impracticable for the Respondent to comply with an order for re-engagement to the[237]I have found that trust and confidence has not broken down between the Respondent and the Claimant so as to render re-engagement to this role impracticable. I have also found that the Respondent’s witnesses, in particular Ms Kates, accepted that the Claimant had, in fact, cooperated with regulators. Even if the Claimant has been critical of the DFS and its order, his criticisms are rational and evidenced based. Re-engagement to the Director Data Commercialisation role would not, in any event, involve any interaction between the DFS and the Claimant. There was no allegation that the Claimant had made criticisms of other regulators.[238]The role does not currently involve any $US operations. While Mr Lewis said that it could in the future, he gave no timescale. Moreover, I agreed with the Claimant that simply analysing card transactions did not come within the wording of the DFS Order. Re-engagement into this role is therefore practicable.[239]I rejected the Respondent’s argument that, seeing that the role involved processing a significant amount of personal data and that the post holder was required to protect the Bank against risks under applicable Data Protection legislation, the Claimant’s previous failures in oversight and supervision made him unsuitable for this role. The relevant legislation and regulatory regime is entirely different. The Respondent has not drawn any precise parallels between the Claimant’s prospective work as a data processor and his failures and oversight and supervision regarding Last Look. As indicated in my judgment, I considered that the Claimant had instituted a large body of controls in his business. His culpable conduct was 20% only. On balance, the findings and the liability judgment demonstrated that the Claimant was capable of recognising that checks and controls were required and that he himself took measures to implement them.[240]Mr Lewis’ evidence did not suggest that the Claimant would be responsible for inventing and implementing his own data protection controls in relation to this post, nor that he would be responsible for supervising other employees in their implementation of a data protection system that the Claimant had invented. As such, I decided that the Director Data Commercialisation role came within Mr Jain’s description of a role which operates in an existing regulatory framework, rather than one which is responsible for setting key risk indicators. More broadly, Data Protection legislation is widely known and understood. A framework is already in place and the Claimant would be working within it.[241]The Director Data Commercialisation role is not subject to the certified person’s regime and therefore the Bank does not have to certify the Claimant as fit and proper in order to carry it out.[242]I considered that it would be just to order the Respondent to re-engage the Claimant into this role. Taking into account the DFS Order and the, albeit limited, criticisms I made of the Claimant in my liability judgment, it would not be appropriate order the Respondent to re-engage the Claimant into a role which was of the same seniority to the role he previously held. Re-engagement into the Director Data Commercialisation role therefore did, in my view, take appropriate account of the Claimant’s contributory conduct, in that it involved a demotion for him.[243]I also considered that it would be just to order re-engagement, rather than any other remedy for unfair dismissal. Had the Respondent acted fairly, the Claimant would still be employed by the Respondent. Re-engagement is the most appropriate remedy to provide redress for this unfair dismissal.[244]I considered, therefore, that the Claimant wanted to be re-engaged to the role of Director Data Commercialisation, which was suitable employment for him. It is practicable for the Respondent to comply with an order for re-engagement to the role and it is just to order the Claimant’s re-engagement to the role of Director Data Commercialisation.[245]The terms on which re-engagement is to take place are as follows:- (vii) The Respondent shall be the Claimant’s employer; (viii) The Claimant’s job title will be Director Data Commercialisation; (ix) The Claimant’s total remuneration annually shall be £150,000; (x) The Respondent shall pay the Claimant in respect of any benefit which the Claimant might reasonably be expected to have had but for the dismissal from the date of his dismissal to the date of reengagement. The Respondent shall pay the Claimant arrears of pay on the basis that his loss of earnings and benefits are calculated according to the non-discretionary compensation and benefits (including pension benefits) he would have continued to receive in his pre-dismissal role, had he not been dismissed, during that period. (xi) The Claimant shall be restored to the position of Director and shall have the pension rights associated with the Data Commercialisation Director post. (xii) The order must be complied with by 21 September 2018 [six weeks].[246]The Claimant should be based in London because Mr Lewis told the Tribunal that the job would be based in London or Northampton. The Claimant lives in London.[247]I determined that the pay for the role should be £150,000, which is the midpoint of the salary range. That takes account of the Claimant’s superior qualifications and experience in statistical analysis and in the Bank generally, but, on the other hand, the fact that he does not have experience in this precise area.[248]I have applied Electronic Data Processing Ltd v Wright [1986] IRLR 8 at 8, EAT, where the EAT held that the benefits which would have accrued to the Claimant if he had not been unfairly dismissed are to be calculated on the basis of the employee's earnings at the date when he was dismissed, rather than on what he would have earned if he had been re-engaged as the Tribunal ordered.[249]I have ordered that the Claimant be paid his fixed, rather than discretionary, compensation from his previous role, on the basis that this is what he was being paid while on suspension, and therefore at the date that he was dismissed. The Respondent should pay the benefits on the same basis that they were being paid during the Claimant’s suspension. This accords with the statutory provisions and also with the justice of the matter, taking into account the liability findings in the case.[250]I have ordered the Respondent to comply with the re-engagement order within 6 weeks, as Mr Lewis said that the approval process for a successful candidate would take “weeks”. REMEDY JUDGMENT The judgment of the Employment Tribunal is that:-(1) The Respondent shall pay to the Claimant compensation pursuant to s117(3) Employment Rights Act 1996 in the sum of £947,585.20 subject to any deductions for income tax and employee national insurance contributions that the Respondent is required to make.(2) The Claimant’s claim for interest following the Remedy Judgment sent to the parties on 9 August 2018 is dismissed.
Preliminary
[1]By a Remedy Judgment sent to the parties on 9 August 2018 I ordered the Respondent to re-engage the Clamant into the role of Director Data Commercialisation by 21 September 2018. I specified the terms upon which the reengagement was to take effect. These included: “(iv) The Respondent shall pay the Claimant in respect of any benefit which the Claimant might reasonably be expected to have had but for the dismissal from the date of his dismissal to the date of re-engagement. The Respondent shall pay the Claimant arrears of pay on the basis that his loss of earnings and benefits are calculated according to the non- discretionary compensation and benefits (including pension benefits) he would have continued to receive in his pre-dismissal role, had he not been dismissed, during that period.” The Respondent did not re-engage the Claimant.[3]The parties have agreed that the Respondent shall pay the Claimant £947,585.20 compensation, less tax and national insurance, pursuant to the re-engagement order and the Respondent’s failure to re-engage him.[4]The only outstanding matter of dispute between them is whether interest is payable by the Respondent on the amount I ordered the Respondent to pay in the 9 August 2018 Remedy Judgment, set out at paragraph 1 above.[5]Both parties provided written submissions on the issue. The Claimant contends, amongst other things, that the 9 August 2018 Remedy Judgment required the Respondent to pay a sum of money which was ascertainable solely by reference to the terms of that judgment. The Claimant contends that the judgment was clear and comprehensive, going to some length to specify the amount due to the Claimant. He contends that, if interest is not payable on a sum ordered to be paid under the terms of a re-engagement order, a Respondent would be able to ignore the court order, delay payment and benefit from their non-compliance. He contends that the purpose of the statutory provisions in relation to interest is that the receiving party should not be disadvantaged, and the paying party should not be advantaged, by a delay in payment.[6]The Respondent contends that the 9 August 2018 Remedy Judgment did not require a party to pay a sum of money; it was a re-engagement order, which specified the terms on which the re-engagement was to take place. It also contends that the sum of money required to be paid by the re-engagement order was neither specified in the terms of the order, nor was it ascertainable solely by reference to the terms of the order. The Respondent further contends that interest could not possibly be payable on the judgment, calculated from 10 August 2018, as the statutory provisions would require, when earnings payable from 9 August to the 21 September were not yet payable on 10 August – and so could not logically attract interest. Relevant Statutory Provisions[7]By s115(2) Employment Rights Act 1996, “On making an order for re-engagement the tribunal shall specify the terms on which the re-engagement is to take place, including – ….. (d) any amount payable by the employer in respect of any benefit which the complainant might reasonably have been expected to have had but for the dismissal (including arrears of pay) for the period between the date of termination of employment and the date of re-engagement, … (f) the date by which the order must be complied with.”[8]By s117(3) Employment Rights Act 1996, “Subject to subsections (1) and (2), if an order under section 113 is made but the complainant is not reinstated or re-engaged in accordance with the order, the tribunal shall make -(a) an award of compensation for unfair dismissal (calculated in accordance with sections 118 to 126), and(b) except where this paragraph does not apply, an additional award of compensation of an amount not less than twenty-six nor more than fifty-two weeks’ pay, to be paid by the employer to the employee.”[9]It is not in dispute between the parties that s124 ERA 1996 permits the limit of the unfair dismissal compensatory award to be exceeded, so that total of the unfair dismissal compensatory and additional awards properly reflects the amount I specified as payable in this case under s115(2)(d) ERA 1996.[10]Articles 2 & 3 Employment Tribunals (Interest) Order 1990 provide: Article 2 “(1) In this Order, except in so far as the context otherwise requires – … “the calculation day” in relation to a relevant decision day means the day immediately following the relevant decision day. …. “relevant decision” in relation to a tribunal means any award or other determination of the tribunal by virtue of which one party to proceedings before the tribunal is required to pay a sum of money, excluding a sum representing costs or expenses, to another party to those proceedings; … (2) For the purposes of this Order a sum of money is required to be paid by one party to proceedings to another such party if, and only if, an amount of money required to be so paid is –(a) specified in an award or other determination of a tribunal or, as the case may be, in an order or decision of an appellate court; or(b) otherwise ascertainable solely by reference to the terms of such an award or determination or, as the case may be, solely by reference to the terms of such an order or decision… (3) In this Order, except in so far as the context otherwise requires, “decision day” means the day signified by the date recording the sending of the document which is sent to the parties recording an award or other determination of a tribunal and “relevant decision day”, subject to Article 5, 6 and 7 below, means the day so signified in relation to a relevant decision. Article 3 “…. where the whole or any part of a sum of money payable by virtue of a relevant decision of a tribunal remains unpaid on the calculation day the sum of money remaining unpaid on the calculation day shall carry interest at the stipulated rate of interest from the calculation day (including that day).”[11]Article 3(4) provides that no interest is payable if payment of the full amount of the award is made within 14 days after the relevant decision day. Discussion and Decision[12]I have accepted the Respondent’s contentions regarding the proper construction of Articles 2 & 3 Employment Tribunals (Interest) Order 1990, as applied to s115 & 117 Employment Rights Act 1996[13]I have decided that the 9 August 2018 Remedy Judgment was not a “relevant decision” under Article 2 Employment Tribunals (Interest) Order 1990 - it was not an award or other determination of the tribunal by virtue of which one party to proceedings was required to pay a sum of money. The 9 August 2018 Remedy Judgment made a re-engagement order, which specified the terms on which the re-engagement was to take place, including a basis for calculating the compensation to be paid to the Claimant between the date of dismissal and the date on which re-engagement was to take effect.[14]The terms of a re-engagement order are prospective – they specify the terms upon which the re-engagement “is to take place,” s115(2) ERA 1996. The money to be paid, therefore, is to be paid if and when the re-engagement takes effect. A reengagement order does not require payment of a sum of money on the date that the order is made.[15]That being the case, Article 3 Employment Tribunals (Interest) Order 1990 did not apply to the 9 August Remedy Judgment, which was an order for future reengagement.
Findings of Fact
[16]Furthermore, I accepted the Respondent’s contention that the sum of money required to be paid by the 9 August Remedy Judgment was neither specified in the terms of the order, nor was it ascertainable solely by reference to the terms of the order.[17]The Remedy Judgment, clearly, did not set out a specific sum of money to be paid to the Claimant.[18]While the Remedy Judgment did set out the basis for calculation of the amount to be paid to the Claimant, it was necessary to look outside the terms of the Judgment, to the Claimant’s non-discretionary contractual pay and benefits, to determine the sum payable. Thus, the Remedy Judgment did not come within the terms of Article 2(2) Employment Tribunals (Interest) Order 1990, so that Article 3 Employment Tribunals (Interest) Order 1990 did not apply to it.[19]I did not consider that this result was unjust to the Claimant. The Employment Rights Act 1996 makes specific provision in s117(3) ERA 1996 for an additional award of compensation to be paid to an employee if s/he is not re-engaged in accordance with a re-engagement order (unless the employer proves that it was not practicable to comply with the order). This means that a Respondent should not profit from deliberately delaying compliance with a re-engagement order.[20]I therefore do not award interest to the Claimant on the sums referred to in the 9 August Remedy Judgment.[21]I do order the Respondent to pay to the Claimant compensation pursuant to s117(3) Employment Rights Act 1996 in the sum of £947,585.20, subject to any deductions for income tax and employee national insurance contributions that the Respondent is required to make. This judgment will attract interest if it is unpaid by the Respondent within 14 days after the relevant decision day.