Milko Ostendorf claims that he was dismissed from Barclays Capital Services (“BarCap”) so that his line manager, Geoff Smailes, could take credit for an idea which would save Barcap over £50 million.
Mr Ostendorf, who was the former Global Head of Funding Derivatives for BarCap, was approached in June 2010 by a colleague who required assistance with a transaction. The colleague explained that a transaction worth £551.5 million between BarCap and an Italian bank had broken down, with BarCap owed a £51.48 million fee; BarCap was refusing to relinquish its fee, leaving the two banks at a stalemate and the banks’ long-standing and profitable relationship at risk. Mr Ostendorf proposed two solutions to the crisis to BarCap, one of which was accepted and would have created £61 million. However, Mr Ostendorf claimed that instead of being commended for his solution he was put at risk of redundancy three hours later, and subsequently dismissed for this reason.
After being made redundant Mr Ostendorf made a claim for unfair dismissal to the Employment Tribunal, alleging that he had been unfairly dismissed by BarCap.
The claim came to the East London Employment Tribunal last month. Mr Ostendorf claimed in evidence that he believed the reason for his dismissal was the creation of the transaction and that should the transaction have been executed then this would have reduced Mr Smailes’ bonus. He further stated that Mr Smailes took the decision to dismiss him in order to prevent his bonus from being reduced, and also stated that he did not think any reasonable bank would have dismissed him for redundancy after he proposed the transaction.
Mr Smailes replied in his witness evidence that he denied dismissing Mr Ostendorf in a bid to obtain the credit for the idea and stated that Mr Ostendorf was being considered for redundancy months before the solution to the stalemate was produced. He further gave evidence that Mr Ostendorf’s team had not been performing to expectations and that his bonus had dropped from £490,000 in 2008 to £195,000 in 2009, commenting that “Milko was aware that he was not performing at the level that was expected of someone of his seniority and with his level of experience and that the newly formed role that had been created for him was not working and he was not generating the level of business in the way that had initially been anticipated when the Funding Structuring business was set up.”
Chris Hadrill, a specialist employment solicitor at Redmans, commented on the claim: “Mr Ostendorf is effectively arguing in this claim that his redundancy was a sham perpetuated to allow his line manager to maintain the size of his bonus. In order to convince the Employment Tribunal of this Mr Ostendorf will have to present cogent and convincing evidence that such a sham occurred, as the Employment Tribunal is normally slow to conclude that a sham has taken place unless such evidence is placed before it. We will have to wait and see what the result of this case is.”
The Employment Tribunal concluded on 30 October 2015 and a judgment is expected shortly.