Yes, is the short answer where the claimant seeks an order for re-engagement and is awarded backpay from the date of dismissal to the date of the tribunal hearing. This happened in Bradley Jones v J P Morgan Securities plc where the Employment Tribunal (ET) ordered that Mr Jones be re-engaged by the bank and awarded back pay of c.£1.6 million.
Mr Jones was dismissed for gross misconduct in early 2020 for spoofing. Spoofing is a type of market manipulation, where it was alleged that Mr Jones had entered and then deleted two sell orders for shares of a Swiss company in quick succession. These were identified as potential market abuse by JPM’s surveillance systems at the time but no action was taken after an internal investigation.
Four years later, J P Morgan had entered into a deferred prosecution agreement with the US Department of Justice following a scandal involving precious metal traders in the US. Arising from this was a new spoofing policy that reversed the burden of proof against a trader, which meant that trades could appear to be spoofing and would be taken as such unless the trader could prove that they were not spoofing. Mr Jones was suspended and then fired for alleged misconduct arising from the 2016 trades.
The ET held that Mr Jones was unfairly dismissed because he did not commit this misconduct, and nor did J P Morgan have a genuine belief that he had committed the alleged spoofing. The ET found this reversal of the burden of proof to be unfair.
Unfair dismissal compensatory damages are capped at £115,115. For many senior executives, this only represents a small portion of their yearly income and most likely does not cover their actual loss of earnings. However if a Claimant seeks re-instatement or re-engagement, then there is potential to recover all loss of earnings at least to the date of the remedy hearing. Mr Jones did this and asked for re-engagement.
Under section 115 of the Employment Act 1996, an ET can order an employer to re-engage the complainant “in employment comparable to that from which he was dismissed or other suitable employment”. When deciding to make such an order, the ET should consider the wishes of the complainant, whether it is practicable for the employer to comply with such an order and if the Claimant caused or contributed to their dismissal to determine if it just to order re-employment.
For Mr Jones it was important to clear his name because he was in an FCA regulated role, where potential new employers would be required to ask for a regulatory reference from his previous employer. J P Morgan had certified that they believed Mr Jones had committed gross misconduct. This was a barrier for Mr Jones to obtaining similar alternative employment.
The ET considered all the facts and held that it was open for another member of staff, not the dismissing manager, at J P Morgan, to certify that Mr Jones was “fit and proper to perform his role” for the purposes of the regulatory reference and that he be re-engaged into a regulated role in Hong Kong. The bank did not comply with this order for re-engagement, which meant that another remedy hearing was scheduled to consider what financial compensation he should get. However, the case settled for an undisclosed amount prior to the hearing.
Orders for re-engagement are still quite rare because the ET has to consider if there can still be a viable working relationship if the employee returns to work. J P Morgan tried to argue that the lack of trust and confidence between the parties undermined the viability of such a relationship but failed in this argument. Most cases will turn on their individual facts, but orders are more likely where the employer is large in size, where an employee does not return to the same manager or team for example.
Although rare, seeking this remedy from the outset may make an employer more inclined to settle for a higher amount than the cap because they would rather not have the employee back in any circumstances.
This blog was written by Anita Vadgama, Partner at didlaw.
