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Recession drives City trader challenge bonus in tribunal

Recession drives City trader challenge bonus  in tribunal

In Tradition Securities and Futures SA v Mouradian, the Court of Appeal confirmed that a broker was entitled to litigate an alleged unpaid bonus claim of £92,000 in a tribunal under the unlawful deduction from wages provisions in the Employment Rights Act 1996, even though he had awarded the bonus to himself.

Mr Mouradian headed-up the Fixed Income Desk of Tradition Securities & Futures SA managing a team of brokers.  Under the bonus scheme rules, he determined the bonus pool.  Tradition then reduced the pool to account for  increased costs resulting in a shortfall of £92,571 to the bonus Mr Mouradian had originally awarded himself. He argued that the costs were not within the identified list of costs in clause 5.2.1 of the contract and Tradition had unlawfully deducted that £92,571 from his wages.

In Coors Brewers Ltd v Adcock the Court of Appeal held that the unlawful deduction from wages provisions are designed for straightforward claims where the employee can point to a quantified loss. The tribunal determined that there was a quantifiable loss on findings of fact that:

  • notwithstanding the terms of his contract, Mr Mouradian determined the apportionment of the bonus pool “in his absolute discretion”;
  • having determined how much his team would receive prior to the bonus pool being declared by Tradition, he could therefore be certain that the balance of the pool belonged to him;
  • how his bonus was paid (that is, whether in cash or into a benefit scheme) was entirely a matter for him to decide.

Both the EAT and the Court of Appeal rejected the employer’s appeal. To decide whether Mr Mouradian was making a claim for a quantified or an unquantified sum, the tribunal was both entitled and obliged to make certain findings of fact. It was clear from these findings of fact that Mr Mouradian had sole discretion as to both the amount and the form of his bonus and his claim could proceed.

 

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