Against comments made by senior managers, low numbers of older senior staff, along with a lack of evidence that the bank took age discrimination, or the claimant’s specific concerns, seriously, persuaded the Employment Tribunal to find that Citibank had discriminated against a 55-year-old it made redundant. Lessons should be learned from this recent non-financial misconduct case……

An Employment Tribunal has ruled recently that Citibank unfairly dismissed and discriminated on the grounds of age against 55-year-old Niels Kirk when the bank made him redundant from his post of chair and managing director of the bank’s energy and natural resources division for Europe, the Middle East and Africa after a senior manager allegedly told him he was “old and set in his ways”. The ET verdict, if upheld following an appeal by Citibank, could represent another case of non-financial misconduct that the Financial Conduct Authority may consider reflective of wider issues within the bank concerning a poor culture towards good customer outcomes.

 

The facts

Kirk joined Citibank in 1991 and remained with them until November 2017. Early in that year, the bank’s senior managers decided that Kirk’s division should be led by one person rather than the current two. Both Kirk and his fellow managing director, aged 51, were to be considered for the new, sole role. In a meeting in September 2017, Kirk was advised that he was at risk of redundancy. It was at this meeting that Kirk claimed a senior manager stated that Kirk was “old and set in his ways”, a claim which was denied.

Shortly after the meeting, of which Kirk said he was not informed of the purpose, he emailed his senior managers arguing against his redundancy and suggesting that appointing his younger colleague to the new role was nothing to do with their respective skills; but was “rather due to my age”. He also claimed that the decision had already been made to appoint his colleague and that the consultation exercise on the restructuring was a sham. Again, the claim was denied. Kirk was eventually dismissed in November 2017. Following an appeal, his dismissal was confirmed in February 2018.

The tribunal’s verdict

Age discrimination

The tribunal found, on the balance of probabilities, that Kirk had proved his claim of age discrimination for a number of reasons. The statement that Kirk was “old and set in his ways” was, itself, an act of age discrimination, the tribunal ruled. The senior manager in question did not help the bank’s case when, in cross-examination during the hearing, he stated on many occasions, “I tried my best – he had a lot of opportunities to change.”

Kirk claimed that his performance rating of 3 (‘consistently strong’) in 2015 and 2016 compared to his 2014 score of 1 (‘exceptional’) was not satisfactorily justified by the bank. The tribunal referred to comments by a senior manager in the Financial Times announcing the hiring of a 42-year-old managing director, “I think he will do well and be a part of the next generation of senior bankers,” as well as a statement in the Evening Standard by another senior manager discussing industry veterans, who said, “perhaps they’ve had their time and we’ve got to move on and leave them behind.” Together with the “old and set in his ways” comment and the reduced performance ratings, the tribunal felt this could show, collectively, possibly unconsciously, the presence of age discrimination within the bank. The tribunal found persuasive statistics revealed by the bank that in 2015 only one of 48 managing directors was aged 57 or more and that in 2016 only two of 51 managing directors were 57 or older.

The tribunal upheld Kirk’s claim that his complaint of age discrimination was treated less seriously than a complaint of sex or race discrimination would have been. It noted that the bank’s explanation for not investigating the age discrimination complaint independently of the consultation process “did not stand up”. According to the tribunal, the bank ignored the complaint until Kirk lodged his appeal against dismissal. They also found responses by the bank’s witnesses with regard to a separate claim of age discrimination by another staff member against one of the senior managers complained about by Kirk, to be “evasive”.

The tribunal brought attention to the degree of incredulity expressed by the bank’s witnesses about the possibility that age discrimination could be present in the bank. The tribunal felt it noteworthy that although Citibank in the United Kingdom has some 5,000 staff, the institution did not monitor age to investigate the possibility of age discrimination.

Harassment related to age discrimination

Kirk had been angered and upset by the comment that he was “old and set in his ways”. The tribunal confirmed it was a “negative, age specific remark and clearly related to his age”. Although it may not have been the objective of the senior manager in making the remark to “violate his [Kirk’s] dignity or to create an intimidating, hostile, degrading, humiliating or offensive environment for him, it certainly had that effect”. The tribunal upheld the claim of harassment in that Kirk, after a long and successful Citibank career, was told he was “old and set in his ways”, and this was one of the reasons why a younger colleague was appointed to the new role in preference to him.

Provision of information leading to Kirk’s redundancy and rejected appeal related to age discrimination

Kirk claimed that the provision of information that led to his dismissal and the rejection of his subsequent appeal was directly linked to his age. The tribunal found the provision of such information had an “important effect” on the outcome “on the prohibited ground of the Claimant’s [Kirk’s] age” for a number of reasons. Firstly, the view of a senior manager that Kirk was “old and set in his ways” while his younger colleague was not. Secondly, another senior manager shared his colleague’s view as he did not challenge the comment when it was made and he perceived Kirk to be less “agile” than his younger colleague.

Thirdly, although the tribunal found the senior managers took the opportunity to restructure the division in 2017 due to a team member’s unrelated departure, rather than a longstanding plan to rid themselves of Kirk as he claimed by reference to the 2015 and 2016 performance ratings, the tribunal found the bank “fell a long way short of satisfying the tribunal, on the balance of probabilities, that the treatment [of Kirk] was in no sense whatsoever on the prohibited ground.”

Fourthly, the tribunal ruled that the decision by another senior manager to reject Kirk’s appeal against dismissal was tainted by age discrimination, although possibly unconsciously. He wished to support his peers’ decision to dismiss Kirk and he closed his mind to the possibility of age discrimination. The tribunal noted his questioning of Kirk at the appeal hearing was suggestive of incredulity at the allegation of age discrimination rather than suggestive of keeping an open mind. Furthermore, the senior manager accepted, without any further probing, his colleagues’ denial of age discrimination.

Age discrimination at appeal hearing

Kirk claimed there were further instances of age discrimination during the hearing where he appealed against his dismissal. The tribunal found that the bank was not able to demonstrate, on the balance of probabilities, that age discrimination did not take place during the appeal hearing. Firstly, for the reasons set out above, the senior manager conducting the hearing rejected Kirk’s appeal for reasons linked to his age. Secondly, he did not demonstrate an open mind regarding Kirk’s complaints. Finally, he expressed surprise that age discrimination was a factor in the original decision to dismiss Kirk, although he was aware that the comment about Kirk being “old and set in his ways” may have been made.

Unfair dismissal

The bank’s main case was that Kirk’s dismissal was a genuine redundancy. A further reason it gave was a reorganisation of responsibilities. Kirk claimed that the main reason for his dismissal was on account of his age and not because of a genuine redundancy or a reorganisation of responsibilities. Therefore, he argued he was unfairly dismissed. For many reasons, the tribunal upheld Kirk’s view and rejected the bank’s case, noting that there was “no dispute that the Claimant [Kirk] received detrimental treatment.”

Firstly, the tribunal adjudged Kirk was dismissed due to his age. Secondly, he was not given any notice of the proposed reorganisation of his division until, in the eyes of the tribunal, after the decision to reorganise the division and dismiss him on the stated grounds of redundancy had been made. The tribunal ruled the consultation with Kirk was not genuine.

Thirdly, the bank did not attempt to have any meeting with Kirk to seek alternative roles within the organisation for which he was suited or that he may have been interested in, nor did the bank approach with an open mind Kirk’s responses to the consultation exercise. Fourthly, although the bank’s stated policy was to consider any discrimination complaints immediately and, in this case, it should have investigated the matter before the consultation started, it made no attempt to do so until Kirk’s appeal against dismissal.

Fifthly, as noted above, the decision to reject Kirk’s appeal was also an act of age discrimination. Finally, after discussing with Kirk his grounds of appeal, the senior manager undertook further investigations. The senior manager did not reconvene a further meeting to provide Kirk with an opportunity to review the outcome of the additional inquiries before deciding to confirm the dismissal of Kirk.

Rejected claims

Although the tribunal found in favour of Kirk on his main allegation of age discrimination, it rejected a number of his other claims. His lower performance ratings in 2015 and 2016, as well as reduced bonuses for those years, were not due to his age, the tribunal ruled. Four allegations of victimisation due to age were also rejected.

The bank said after judgment was given: “Citi denies that Mr Kirk’s redundancy was in any way related to his age. While the tribunal did not uphold all of Mr Kirk’s case, we are disappointed with its decision regarding his termination, particularly given the small age gap between Mr Kirk and the employee who was ultimately given the role.”

The bank has said it will appeal against the tribunal’s ruling. Kirk is reported to be seeking £9.7 million in compensation.

Non-financial misconduct

Driving changes in the culture of the financial services industry and the firms within it is an important workstream for the FCA. Whereas the culture of firms in dealing with their customers is the main focus of the regulator, it has increasingly turned its mind to the culture of firms regarding its other stakeholders, including its staff. The supervisor believes that if a firm has cases of bullying, victimisation, harassment and discrimination among its workforce, such practices may be reflective of a poor culture within the firm that may have both direct and indirect consequences for the firm’s culture in relation to its customers and clients. Furthermore, the FCA believes that, in appropriate cases, the fitness and propriety of relevant individuals may be called into question.

The regulator made clear its views when it commented, “the way firms handle non-financial misconduct… is potentially relevant to the [FCA’s] assessment of the firm in the same way that their handling of insider dealing, market manipulation or any other misconduct is.” More briefly, a senior FCA official said, “From our perspective, misconduct is misconduct, financial or non-financial,” while another official noted, “non-financial misconduct is misconduct, plain and simple.” The FCA has backed up its words with action as revealed in its November 2019 response to a Freedom of Information Act request where it disclosed that there are seven open investigations into non-financial misconduct issues covering one firm and six individuals.