Royal Bank of Canada has abandoned its appeal of a British employment tribunal’s ruling that the bank wrongly dismissed a former trader who tried to blow the whistle on what he considered a lax compliance culture.
On Wednesday, RBC agreed to pay the full costs incurred by John Banerjee, the former foreign-exchange trader from its London office, in contesting the bank’s appeal, less than an hour before he planned to apply for a costs award. Mr. Banerjee has accepted the agreement, which he says awards him more than £40,000 ($70,000).
RBC fired Mr. Banerjee in 2016, months after he had e-mailed a senior banker with complaints that many staff members were spending only a few cursory minutes attesting to the fact that they had read and understood complex regulatory and compliance policies. At the employment tribunal, RBC claimed it had dismissed Mr. Banerjee over his habit of arriving late for work after repeated warnings, but a judge ruled that was a “pretext” and that the main reason was his disclosure about compliance issues. The judgment, rendered in May of 2018, concluded that RBC “looked for an opportunity to be rid of him.”
The employment tribunal did not try to determine whether RBC’s broader compliance culture was deficient, as he alleged. But Mr. Banerjee subsequently met with the Financial Conduct Authority (FCA), a U.K. regulator overseeing financial services firms and financial markets. The FCA has since launched an investigation into RBC’s European banking arm, Royal Bank of Canada Europe Ltd., as confirmed by a document obtained by The Globe and Mail.
An FCA spokesperson said the regulator does not confirm or deny investigations.
After the British employment tribunal issued its judgment last year, RBC initially disagreed with the ruling and appealed, but the bank dropped its challenge on Feb. 12.
“We carefully considered the benefit of moving forward with an appeal and decided not to prolong these proceedings. We remain committed to maintaining an environment where employees feel comfortable speaking up,” a spokesperson for the bank said Thursday in an e-mailed statement.
Mr. Banerjee told The Globe he believes RBC’s appeal was part of an “attrition strategy” to prolong the legal proceedings, and said that “RBC’s appeal had literally zero merit.”
“Up until today, they were saying they were justified in bringing the appeal. Now, that fig leaf has completely gone,” he added.
Mr. Banerjee’s case marked a rare win for a British whistle-blower, and he sought £13-million in damages. But on Feb. 1, the employment judge calculated damages of nearly £1.3-million based on lost salary, pension and benefits. Because the tribunal ruled that Mr. Banerjee contributed to his dismissal with his repeated tardiness, describing him as “a thorn in the side of his management,” the damages RBC ultimately pays could be reduced. A final decision on damages has not yet been issued.