What can be learned from the recent Employment Appeal Tribunal case of Citibank NA and others v Kirk?
Niels Kirk was employed by Citibank from 1 June 1991 until 27 November 2017, most recently as a corporate banker, with the job title EMEA Head of CB Energy, Managing Director. His total annual remuneration in 2013 to 2016 ranged from £534,613 to £937,313.
Other Managing Directors included Ms Olive, Head of Metals & Mining, and Mr Hanen, who was Head of Power.
In 2017, Mr Hanen took up a new position elsewhere in the business. The Co-Heads of Corporate Banking for EMEA (Co-Heads) decided to use Mr Hanen’s departure as an opportunity to save costs and streamline the current operating model. They proposed to create a consolidated natural resources team led by a single senior Managing Director. The Co-Heads decided that Ms Olive was the most suitable Managing Director for this role.
Citibank opted to have an informal “heads up” meeting with Mr Kirk on 25 September 2017. At the meeting, he was told that the number of Managing Directors would be reduced to one, and that Ms Olive would be that one.
Mr Kirk made contemporaneous handwritten notes of the meeting, including that he had been told by the head of Citibank’s Corporate Investment Bank, EMEA, Mr Falco, that Mr Kirk was “old and set in your ways”.
Mr Kirk e-mailed Mr Falco and his line manager, Mr Isaac, complaining that he was the best qualified candidate and that the decision to pass him over was because of his age, rather than skills or sector experience. Mr Kirk alleged age discrimination in subsequent e-mails.
Mr Kirk attended formal redundancy consultation meetings on 17 October 2017 and 26 October 2017. In the latter meeting, Mr Isaac referred at least four times to the need for a more “agile” approach and for greater “agility”.
Citibank held a final consultation meeting with Mr Kirk on 9 November 2017. At that meeting, Mr Isaac referred again to the need for “agility” and explained that Mr Kirk had been compared to Ms Olive in a benchmarking comparison, and Ms Olive had prevailed.
Mr Kirk was dismissed by reason of redundancy on 20 November 2017. He was 55 years old, and Ms Olive was 51 years old.
Mr Kirk appealed his dismissal, complaining that the decision to dismiss him was based on a perception that he was “old and set in his ways” rather than being “agile” and “flexible”. His appeal was unsuccessful.
Mr Kirk brought Employment Tribunal claims against Citibank. His claims included unfair dismissal, age discrimination, and age-related harassment.
The Employment Tribunal upheld Mr Kirk’s claims of unfair dismissal and age discrimination. Mr Kirk was awarded compensation of nearly £2.7 million.
Citibank appealed to the Employment Appeal Tribunal (EAT), which considered the small difference in age between Ms Olive and Mr Kirk and held that “the fact that the difference is marginal or relatively small would not of itself be fatal to the claim”. Nonetheless, the EAT sent the case back to the Employment Tribunal to consider “evidence as to the perception of the difference in age (or lack thereof)” because if that evidence is accepted, it will make it “less likely” that the reason why Mr Kirk “was dismissed was the fact that he was 55 and Ms Olive was a few years younger”.
So, how could Citibank have improved its redundancy process, and potentially avoided this lengthy Tribunal litigation? Three points stand out:
- Redundancy should be the outcome of a fair process, not determined before the process has even started. Here, the Employment Tribunal found that by the time Mr Isaac and Mr Falco met with Mr Kirk informally on 25 September 2017, they had already decided that Ms Olive would be appointed to the post and that Mr Kirk would be made redundant.
- Be cautious about the use of “informal” meetings to discuss redundancy issues. The fact that Mr Isaac and Mr Falco considered the meeting on 25 September 2017 to be an informal “heads up”, rather than a formal consultation meeting, did not stop the meeting from being referred to in Mr Kirk’s Tribunal claim.
- Avoid making potentially discriminatory remarks in redundancy meetings. The Advisory, Conciliation, and Arbitration Service (ACAS) advises employers to make sure that any managers who lead redundancy consultation meetings have had training in managing the meeting appropriately.
If you have any queries regarding this or any other employment matter, please do not hesitate to contact a member of the team.
