A high ranking bank manager of a Geneva bank had been dismissed in November 2015 under a six month garden leave following an internal money-laundering investigation against the bank manager and his team. The Employment Court of the Canton of Geneva awarded the bank manager in July 2015 a damage payment for abusive dismissal of around CHF 185'000, a bonus for the work years 2012 and 2013 in the amount of CHF 267'000 and CHF 12'000, respectively, and a damage compensation for forfeited blocked shares amounting to GBP 241'000.
"The highest court in Switzerland first reviewed as to whether an abusive dismissal was given."
On appeal of the bank, the Upper Employment Court of the Canton of Geneva dismissed one year later all these claims (with the only exemption of a small amount for the bonus 2012 and 2013 of CHF 8'200). Both parties called upon the Swiss Federal Supreme Court to render a final award which can be summarized as follows.
The highest court in Switzerland first reviewed as to whether an abusive dismissal was given, thereby weighing the bank's interest to protect its reputation against the bank manager's interest to continue his work after a two decade long career with the bank, and as the above internal investigation revealed no criminal wrongdoings by the bank manager whilst one of his team members was jailed and convicted during the internal investigation. The Swiss Federal Supreme Court (SFSC) evaluated various other circumstances of the termination.
"Fixed bank salaries of up to CHF 350'000 in combination with a bonus in the range of these fixed salaries could be requalified as ordinary salaries (if paid on a regular basis) even if the bonus was discretionary."
The fact that four team members were dismissed along with the bank manager was an indication that the bank did not act arbitrarily against the bank managers, according to the SFSC. It further considered that the bank manager found a comparable professional position with another Geneva bank right after his dismissal. The highest court in Switzerland also dismissed the bank manager's notion that the performance reviews throughout his entire career with the bank were immaculate and that he had been recently promoted to head the bank's Middle East clientele. In summary, the SFSC confirmed the findings of the Upper Employment Court of the Canton of Geneva that an abusive dismissal was not given.
"The SFSC's practise qualifies bonuses as gratifications in cases of high fixed salaries exceeding CHF 350'000, provided that these bonuses wholly or partly payable at the discretion of the employer."
The SFSC then had to review as to whether the two bonuses for 2012 and 2013 were owed. To that end, the SFSC recalled its various judicial precedents issued over the last couple of years. It reconfirmed its practice that middle and higher fixed bank salaries of up to CHF 350'000 in combination with bonuses in the range of these fixed salaries could be requalified as ordinary salaries (if paid on a regular basis) even if the bonus were wholly or partly payable at the discretion of the employer (what is a so-called gratification).
Conversely, it is the SFSC's practice to qualify in any case bonus as gratifications in cases of very high fixed salaries exceeding CHF 350'000, provided that these bonuses wholly or partly payable at the discretion of the employer. The SFSC considered the bonuses for 2012 and 2013 as discretionary bonuses. Along with its preceding conclusion that no abusive dismissal was given, the SFSC confirmed the Upper Employment Court's view that the bonuses were no longer owed.
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