Khatri v Co-Operative Centrale Raiffeisen-Boereateen Bank SA
| Jurisdiction | England & Wales |
| Judgment Date | 12 October 2009 |
| Neutral Citation | [2009] EWHC 2606 (QB) |
| Docket Number | Case No: HQ09X02570 |
| Court | Queen's Bench Division |
| Date | 12 October 2009 |
[2009] EWHC 2606 (QB)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
Before: MR JUSTICE PENRY-DAVEY
Case No: HQ09X02570
MR JAMES GOUDIE QC (instructed by Gannons Solicitors) appeared on behalf of the Claimant
MR D CRAIG (instructed by Allen & Overy LLP) appeared on behalf of the Defendant
MR JUSTICE PENRY-DAVEY: The claimant was employed by the defendant bank as a derivatives trader from May 1998 until 13 January 2009. By his contract of employment he was entitled to a performance-related bonus. It is in respect of that bonus, calculated at approximately €1.6 million, that this application is made.
The claimant seeks summary judgment on the basis that the defendant has no real prospect of defending the claim. The defendant submits that this is not an appropriate case for summary judgment and that he has a real prospect of successfully defending the claim. Additionally, there are factual disputes between the parties that cannot be resolved on a summary judgment application.
The issue, as I have indicated, is whether the claimant is entitled to be paid the bonus in respect of his employment in 2008. He says he is; the defendant disputes it.
He commenced employment in June 1998, his contract providing that he would participate in the defendant's annual discretionary bonus scheme. By letter dated 18 March 2008 that contract was varied in that his basic salary was increased to £100,000, he was awarded a guaranteed bonus of £50,000 and became eligible to receive a performance-related bonus, set out in the following terms, and I refer to page 30 of the bundle of documents:
“You will also be eligible to receive a performance-related bonus from the bank, subject to your individual revenue generation. Any payment due will be made at the time the bank makes its annual performance bonus payment, but in any event no later than 31 st March in the year following the performance year for which you are being awarded, i.e. 31 st March 2009 in respect of 2008.
The formula used to calculate the bonus due to you will be as follows and will be calculated for 2008. [It is not necessary to set out the formula in detail, but it goes on] The above table is applicable to your 2008 bonus. The bank maintains the right to review or remove this formula-linked bonus arrangement at any time.”
The claimant's case is that the express contractual provision that he would receive performance-related bonus for 2008 in accordance with that table is clear and unqualified, subject only to his individual performance threshold being reached (as it is accepted it was in 2008) and the bank's bonus deferral arrangements which it is conceded are not relevant to this claim.
In July 2008 the claimant was notified that he was at risk of redundancy, but the suggestion was withdrawn by letter on 23 July. The letter (at page 33 of the bundle) is in these terms:
“I write further to our recent meetings of 21 st and 22 nd July, at which you were advised that your position was at risk of redundancy. The bank can now confirm that the selection process is now complete. As a result I can advise that you are no longer at risk of redundancy. I can also confirm that you have been successfully redeployed as a trader within the Global Financial Markets, Position Management, Interest Rate Derivatives Desk.
A further letter detailing the amended terms and conditions of your employment which will apply to your change in role will follow.
The first three months from today's date will be regarded as a trial period for your new role. This will provide an opportunity for the bank and yourself to assess your suitability for the role. Once the trial period has been completed successfully your appointment would be confirmed. Should your trial period not be successful, the bank will offer you redundancy terms on a without prejudice basis, subject to the signing of a settlement and compromise agreement. If you have any questions please do not hesitate to contact me.”
That was followed by a letter the following day (page 34 onwards of the bundle). It reads materially as follows:
“Further to your recent meetings with Henk Rozendaal and Julie Fitzgerald, I am writing detailed amendments to your original contract of employment, dated 29 May 1998 following your successful appointment as trader within the Global Financial Markets, Position Management, Interest Rate Derivatives Desk.”
It then goes on to set out the status and duties in the numbered paragraph 1:
“[In relation to remuneration guaranteed bonus] The terms relating to the guaranteed bonus attributable to the 2008 calendar year continue to apply, as per the letter dated 18 March 2008.
[For a discretionary bonus] For future calendar years you will also be eligible to participate in the bank's annual discretionary performance-related bonus scheme. This scheme will vary from year to year. Bonuses which are made entirely at the discretion of the bank on the basis of a number of factors including your individual performance, the performance of the business area in which you work and the performance of the bank.
The bank may also take into account your strategic importance and the need to retain your future services in deciding the level of any bonus. Any bonus may be subject to partial deferral, in accordance with the bank's deferral policy in operation at the time of each payment.
The bank reserves the right to vary or withdraw its discretionary performance-related bonus scheme at any time in its complete discretion. Payment of a bonus in any year does not guarantee payment of a bonus in subsequent years. Any bonus payment is usually paid in the March following the end of the relevant calendar year. You must be employed on the bonus payment date and not under notice of termination, given or received, or subject to disciplinary sanction, to receive a bonus payment.
For clarification please note that following the closure of the London desk the formula-driven bonus relating to the desk will cease with immediate effect and you will be eligible to participate in the discretionary bonus for 2008.”
That letter is considerably longer than the passage that I have read out, but it concludes:
“I should be grateful if you would sign below to indicate your acceptance of this offer. Should you have any questions then please do not hesitate to contact me.”
There is an area for signing and dating which follows the signature of Kate Richardson ..
The claimant was invited to...
To continue reading
Request your trial
-
Attrill and Others v Dresdner Kleinwort Ltd
... ... ('DKL') is a service company wholly owned by Dresdner Bank AG ('DB'). The Claimants form two groups. It is convenient ... been cited with approval by the Court of Appeal in Khatri v Cooperatieve Centrale Raiffeisen [2010] EWCA Civ 397 ... ...
-
Attrill and Others v Dresdner Kleinwort Ltd
...to be drawn between changes which are wholly advantageous to the employee, as in this case, and those which are not, as in Solectron and Khatri. In addition they contend that section 1.4 of the Employee Handbook dispensed with the need for any communication of acceptance and the circumstanc......
-
Khatri v Co-Operative Centrale Raiffeisen-Boereateen Bank SA
...first judgment at the invitation of Lord Justice Rix): 1 This appeal is from a judgment of Mr Justice Penry-Davey of 12 October 2009 [2009] EWHC 2606 (QB). He refused the claimant summary judgment in respect of his claim for a bonus which he says is due under his employment contract with t......
-
FW Farnsworth Ltd and Another v Lacy and Others
...act implying acceptance": see per Jacobs LJ in Sallem Khatri v Cooperatieve Centrale Raiffeisen-Boerenleenbank BA [2010] EWCA Civ. 397 (" Khatri"). 22 They also both relied in that regard on the decision of the Employment Appeal Tribunal ("EAT") in Solectron Scotland Ltd v Roper and others ......