Geys v Société Générale London Branch 2010 EWHC 648

Mr Geys was employed by Société Générale from February 2005 as Managing Director, European Fixed Income Sales. On 29 November 2007 he was called into the Bank and given a letter which said that the Bank had decided to terminate his employment with immediate effect. On 10 December the Bank sent him a draft termination agreement advising that HR would contact Mr Geys separately regarding other matters including his notice. On 18 December the Bank made a payment of approximately £32,000 into his bank account. Mr Geys concluded that it was intended to be a payment in lieu of notice.

His solicitors wrote to the Bank advising that Mr Geys had decided to affirm his contract and that he reserved his position concerning the monies until he understood what they constituted. On 4 January the Bank wrote to Mr Geys stating that it had given him notice to terminate his employment with immediate effect and that his pay in lieu had been credited to his account on 18 December. The Bank subsequently calculated the termination payment due to him of €8 million. However Mr Geys argued that he was in fact entitled to be paid more than €12.5 million. The disparity was part due to the difference of opinion when his employment ended.

The court held that his employment could not have terminated on 29 November but only on 6 January when he was deemed to have received the Bank’s letter confirming that he had been paid in lieu of notice, as the Bank did not in their original letter rely on any contractual provision to terminate him with immediate effect.

This was an expensive mistake. As they had failed to specify in the termination letter that it was exercising its right to pay in lieu of notice, Mr Geys’ employment was extended from 29 November until 6 January and as they had not offered him the correct amount of payment Mr Geys was not obliged as a condition of receiving the money to perform his concurrent obligation of entering into a termination agreement or to desist from proceedings against the Bank.

Key point: In summary dismissal cases, an employer should state clearly when and how they are terminating the contract by making a payment in lieu of notice.