New regulations to make senior bank staff personally responsible or even criminally liable for failings of junior employees could spark a rise in unfair dismissal claims, an employment lawyer has warned.
From March 2016, senior managers at UK banks will be accountable to the Financial Conduct Authority and Prudential Regulation Authority for regulatory problems occurring within their remit, and will need to demonstrate to the regulator that they took reasonable steps to prevent breaches. Consequently, they may want to pre-emptively dismiss staff members who they believe could put the bank at risk rather than spend time managing their performance, according to Jon Gilligan, partner at GQ Employment Law.
Gilligan says: “The risk is that managers will act in haste and that unfair dismissal or constructive dismissal claims will follow.
“Senior banking staff will not want to take the fall if an underperforming team member puts the bank at risk of regulatory action, but human resources and legal will want to avoid unnecessary employment law claims.”
