A high-ranking Geneva bank manager was dismissed in November 2015 with six months' gardening leave following an internal money-laundering investigation against him and his team. In July 2015 the Canton of Geneva Upper Employment Court awarded the bank manager:

  • a Sfr185,000 damages payment for abusive dismissal;
  • a Sfr267,000 bonus for 2012 and a Sfr12,000 bonus for 2013; and
  • a £241,000 damages compensation payment for forfeited blocked shares.

On appeal, the court dismissed all of the claims other than Sfr8,200 for the 2012 and 2013 bonuses. Both parties called on the Federal Supreme Court to render a final award.

The Federal Supreme Court reviewed whether there had been an abusive dismissal, thereby weighing the bank's interest to protect its reputation against the bank manager's interest to continue his work after a two-decade career with the bank. The internal investigation revealed no criminal wrongdoings by the bank manager, but one of his team members was jailed and convicted. The court evaluated various other circumstances of the termination.

According to the Federal Supreme Court, the fact that four team members had been dismissed along with the bank manager was an indication that the bank had not acted arbitrarily against the bank managers. It further considered that the bank manager had found a comparable professional position with another Geneva bank right after his dismissal. The court also dismissed the bank manager's notion that the performance reviews throughout his entire career with the bank had been immaculate and that he had recently been promoted to head the bank's Middle East clientele. The court confirmed the Upper Employment Court's findings that there had not been an abusive dismissal.

The Federal Supreme Court also reviewed whether the 2012 and 2013 bonuses were owed and recalled its various judicial precedents issued over the past few years. It reconfirmed its practice that middle and high fixed bank salaries of up to Sfr350,000 in combination with bonuses in the range of these fixed salaries could be requalified as ordinary salaries (if paid on a regular basis), even if the bonuses were wholly or partly payable at the employer's discretion (so-called 'gratification').

Conversely, it is Federal Supreme Court practice to qualify bonuses as gratifications in cases of very high fixed salaries exceeding Sfr350,000, provided that they are wholly or partly payable at the employer's discretion. The court considered the 2012 and 2013 bonuses to be discretionary. Along with its preceding conclusion that there had been no abusive dismissal, the Federal Supreme Court confirmed the Upper Employment Court's view that the bonuses were no longer owed.

For further information on this topic please contact Thomas Rihm at Rihm Rechtsanwälte by telephone (+41 44 377 77 20) or email ([email protected]). The Rihm Rechtsanwälte website can be accessed at www.rihm-law.ch.