368: When is re-engagement an appropriate remedy for unfair dismissal?

Whilst re-engagement is a rarely ordered by the Employment Tribunal as it would often be impracticable or inappropriate, this case shows that Tribunals will order it when the facts are suitable. Here a large London bank was ordered to re-engage a high-earning trader.

In an unfair dismissal claim, the Employment Tribunal can make an order for an employee to be reinstated in the same job, or re-engaged in a comparable job with the same employer. This would also require the employer to make up lost salary and benefits for the period between dismissal and the date of reinstatement or re-engagement, and this is unaffected by the statutory cap on unfair dismissal compensation. An additional penal award may be payable for non-compliance unless the employer can show that it was not practicable to comply.

The recent case of Jones v JP Morgan Securities plc illustrates re-engagement in practice in which a London bank was ordered to re-engage a trader in its Hong Kong office and to pay him around £1.58 million in lost salary and benefits.

Mr Jones was a financial analyst for JP Morgan. In 2016 the bank conducted an investigation into his alleged ‘spoofing’, a form of illegal market manipulation, but concluded that no disciplinary action was warranted. However, in 2019 the bank revisited this decision following introduction of a new spoofing policy and internal review. Following another disciplinary procedure, when Mr Jones said he could not recall the relevant trades, he was then dismissed for gross misconduct.

Mr Jones’ claim for unfair dismissal was upheld by the Employment Tribunal, which found that the true reason for dismissal was not his misconduct, but the bank’s desire to appease its regulators. The Tribunal also held that, in any event, Mr Jones’ conduct did not amount to spoofing and that his dismissal was procedurally unfair.

Following his dismissal, the bank refused to provide Mr Jones with a regulatory reference stating that he was a fit and proper person. Without this, Mr Jones was unable to work in any regulated role across the UK financial services sector or, in practice, abroad. Following the Tribunal’s ruling of unfair dismissal, Mr Jones sought an order for reinstatement or re-engagement. Due to redundancies in his former team, reinstatement was not practicable. However, the bank was ordered to re-engage Mr Jones within three months in a comparable and suitable role which he had identified with an associated employer in Hong Kong. Mr Jones was also awarded around £1.58 million in salary, incentive scheme payments and benefits lost between dismissal and re-engagement.

This case highlights the unusual lengths the Tribunal was prepared to go to remedy the employee’s unfair dismissal. As the bank refused to provide Mr Jones with a regulatory reference, this could have drastically curtailed his future career and earnings potential. When considering the practicability of re-engagement, the Tribunal also took into account that JP Morgan is a global business with 250,000 employees and immense financial resources. It is worth noting that despite Mr Jones’ exoneration in the Tribunal’s judgment and the re-engagement order, the bank could still give him an adverse regulatory reference in future.