A VICTORY of sorts was claimed by the RBS Group after a judge ruled that a sacked senior employee should receive no financial compensation despite winning part of his unfair dismissal claim against the Edinburgh-based bank.
Ian Drysdale was a senior foreign exchange trader at RBS in London who was dismissed by the bank after an inquiry into the activities of 79 employees alleged to have been involved in “fixing” currency exchange rates.
RBS was one of a number of banks involved, with Drysdale said to be a member of the so-called “cartel” chat groups which shared client orders with traders at rival banks.
He was dismissed in February last year and took the state-owned bank to an employment tribunal, claiming RBS had “dishonestly contrived” his sacking and that he was a “scapegoat’ for the bank’s admitted failings – RBS paid more than £400 million in penalties to regulators in the UK and America as a result of the scandal.
In evidence to the tribunal, Drysdale said: “I do not believe that a fair investigation was undertaken. A process was adopted entirely with the intention to dismiss me.”
In his judgment on the case, Judge James Tayler said there had been flaws in the RBS disciplinary process which made Drysdale’s dismissal technically unfair but he did not agree with Drysdale’s claim that his sacking was contrived.
In the verdict quoted by Bloomberg, Tayler stated: “He, along with a number of others, was doing something he knew was fundamentally wrong. “ He added: “It is not just and equitable that he receive compensation.”
RBS said in a statement yesterday: “We are pleased that the tribunal has ruled that Ian Drysdale’s conduct and behaviour was completely unacceptable in a number of different ways and that no compensation will be payable to him.”
Drysdale is one of a number of employees of various banks who has taken claims to the tribunal, with various submissions that the practice of rigging the foreign exchange markets was widespread and condoned by senior bank management.
Citigroup trader Perry Stimpson won his case for unfair dismissal in November, though the tribunal decided he had “contributed to his dismissal”. As yet there has been no news of any financial settlement for Stimpson.
There was positive news for RBS whose share price rose by more than three per cent yesterday to 259.6p, still well short of the price needed for the remaining 73 per cent of shares to be sold off at no loss to the taxpayer.
The UK Government has not indicated when the next tranche of shares will go on sale, but analysts at UBS upgraded their view from “neutral” to “buy”, and indicated shares could rise to over 350p.
Under chief executive Ross McEwan, RBS is selling off much of its foreign-based businesses and moving towards a customer-facing domestic bank concentrating on its UK and European markets.
The UBS indication is proof the markets are taking note of the transformation at RBS, and the bank will also shortly deal with the enforced sale of its Williams and Glyn division south of the Border.
UBS analyst Jason Napier said: “The shape of RBS is becoming more attractive as the investment bank shrinks and costs are radically reduced, targeting a 55 per cent cost-to-income ratio in 2018.
“Risks from ring-fencing and other regulatory change are now considered much lower than at Barclays, for example. We think a legacy-free RBS should trade in line with Lloyds Banking Group.”
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