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Finance director loses dismissal claim after friendship with client

Finance director loses dismissal claim after friendship with client

Tuesday 09 February 2021

Finance director loses dismissal claim after friendship with client


A senior director of a trust company who was sacked after failing to fully disclose a friendship with a client has lost her claim for unfair dismissal compensation.

Justine Wilkinson took her former employer, Fairway Trust, to the Employment Tribunal after she was dismissed for gross misconduct last April.

However, Deputy Tribunal Chairman Advocate Cyril Whelan rejected Mrs Wilkinson’s claims of unfair and wrongful dismissal, concluding that Fairway had fairly sacked her, with that outcome being “practically inevitable given the facts of the case."

The Tribunal heard that Mrs Wilkinson was the lead director at Fairway for all compliance issues, having worked there for four-and-a-half years. During her employment, a friendship developed between her and one of the company’s male clients, which she and her team provided professional services for. 

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Pictured: The case was heard by the Employment Tribunal.

This friendship included wining and dining, weekends in London together and the client sending Mrs Wilkinson a £1,200 carbon-frame bicycle as a birthday present.

The Tribunal concluded that “a position of conflict had arisen between Mrs Wilkinson‘s personal life and the needs of the company that employed her'.

Mrs Wilkinson initially did not consider the friendship a conflict of interest but after confiding with some colleagues, she did fill in a ‘conflict of interest’ form - part of a declaration process that the firm had as part of its regulatory obligations.

However, she did not fill it in within the required timeframe, it was not fully completed, and it was not signed off by someone with the appropriate seniority.

She also failed to declare the bicycle as a gift, arguing that - because it had been sent to her home address - it had been a personal birthday present.

Advocate Whelan concluded: “The company has a written procedure governing conflicts of interest by which Mrs Wilkinson, as an employee, was contractually bound. She did not follow that procedure. In failing to do so she placed the company in breach of its regulatory obligations and rendered it vulnerable in other ways.

“Mrs Wilkinson says that she did not hide the fact of her friendship with the client and did alternative things sufficient to negate her breach of the company’s written procedure. 

“I disagree about the nature and effect of those alternative things, and have found that her dismissal was neither unfair nor a breach of her contract of employment.”

Referring to Mrs Wilkinson’s defence at the hearing, which took place last month, the judgment notes that, through her counsel, she claimed that she had tried to comply with the terms of her contract and the company had jumped to conclusions about the friendship, which had led to hostility.

Fairway’s counsel argued that, on the question of gross misconduct, it was the company’s position that Mrs Wilkinson had acted “wilfully and deliberately” in breach of her contractual obligation and her attempts to mislead colleagues had been calculated.

Advocate Whelan ended his judgment: “I should say that I have taken account throughout of Mrs Wilkinson’s previous record of unexceptionable service and the good things which others have said about her character. 

“The finding in this case is one that gives no pleasure.”

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