What should employers learn from the “Crazy Miss Cokehead” Employment Tribunal case?

It’s fair to say that the banking industry has more than its fair share of high profile and high value Employment Tribunal cases.  The male-dominated environment, long hours and hard working, hard playing culture forces people to play along to fit in.  Those who don’t are soon marginalised and pushed out in favour of a face that fits.

The UK branch of Russian bank Sberbank will shortly pay the price for this culture after former trader Svetlana Lokhova won her Employment Tribunal against the bank.  Cambridge graduate Lokhova had spent two periods of employment at the bank during which the Tribunal was told that she had generated £20m in profits.  She claimed however that she was forced out of her £750,000 a year equity sales position when colleagues targeted her after she reported one of them for insider trading.

Lokhova made 22 complaints against the bank, and while the Tribunal rejected 19 of these, they found that she had suffered harassment and gender related victimisation.

The Employment Tribunal found that her manager David Longmuir should have been subject to Gross Misconduct proceedings after making a number of derogatory remarks, including calling her “Crazy Miss Cokehead”, “B***h” and “Chemically dependent minigarch daughter”, despite no evidence that she had ever taken drugs.  Another colleague suggested in emails when she resigned that she should spend time “relaxing” with alpha male Nigerian tribal leaders to help with her stress.

The Employment Tribunal also found that the head of the London office Paolo Zaniboni failed to manage the internal conflict properly and didn’t investigate Miss Lokhova’s complaints.  In their judgement, they said “His lamentable inaction caused detriment to the claimant and amounts in our view to victimisation.  What he should have done was to suspend Mr Longmuir and ensure that a proper disciplinary process was taken against him.”

It is unclear as yet how much the Employment Tribunal will award Miss Lokhova – figures as high as £5m have been quoted in the press for her original claim.  While it is very unlikely to be this high, the recently revised unfair dismissal award cap of the lower of 1 year’s salary or £74,200 doesn’t apply due to the finding of discrimination.  Given the amount Miss Lokhova was earning we can expect the final award to be in the region of high hundreds of thousands or perhaps millions of pounds.

So what should employers learn from this case?

Obviously we already know that trading floors aren’t the most politically correct places!  It is very likely that Sberbank had all the correct policies and procedures, but that they were locked in a cupboard somewhere and were not enforced on the shop floor.  A spokesman for the bank was quoted afterwards as saying “Sberbank CIB and the management team in London are committed to equal opportunities and promoting diversity in its workplace, and did not expect this decision.”

This seems to be a case of senior management sticking their heads in the sand, but it is very common for employers to pay for a big bundle of template employment handbooks and policies then put them in a drawer rather than communicating them to staff and most importantly to the managers who are required to deal with workplace disputes.

The answer is of course to do several things:

  • Put the correct policies and procedures in place and make them accessible to all staff
  • Communicate them to staff when they join the workplace and ensure they have read them, drawing particular attention to Anti-Discrimination policies and the Disciplinary and Grievance Procedures
  • Train managers to spot bad behaviour and deal with it properly
  • Call in the expert employment solicitors for advice if it looks like a situation is going to be complex, high value or difficult to control

Here at Backhouse Solicitors, we regularly take on cases against banks, and have achieved very substantial settlements for clients facing similar issues to Miss Lokhova.  If you are an employer, particularly in an industry known for less than perfect behaviour then don’t take the risk of an expensive mistake – contact us today to keep you on the right path.

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