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	England and Wales High Court (Queen's Bench Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Queen's Bench Division) Decisions >> Faieta v ICAP Management Services Ltd [2017] EWHC 2995 (QB) (06 December 2017) URL: http://www.bailii.org/ew/cases/EWHC/QB/2017/2995.html Cite as: [2017] EWHC 2995 (QB)

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IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		Royal Courts of Justice Rolls Building, 7 Rolls Buildings Fetter Lane, London EC4A 1NL
		06/12/2017

Mrs Justice Moulder :

1. This is a claim that arises out of the employment contract that the claimant had with the defendant, an inter-dealer broker. The claimant seeks damages for the alleged breach of contract in placing the claimant on garden leave and for wrongful dismissal.

Background

2. The claimant was employed by the defendant from 1 February 1999 on the European Government Bonds Desk (the "EGB Desk").
3. The terms of his contract were set out in a service agreement dated 7 November 2006. From 1 April 2010 the term of the contract was extended and the claimant was granted a guaranteed minimum bonus of £400,000 per annum for three years. The contract was renegotiated in 2012 and the service agreement amended by letter dated 22 October 2012 (the "Service Agreement"). The claimant agreed a minimum five-year fixed term contract until 30 September 2017. In addition he was entitled to a discretionary bonus to be awarded out of the bonus pool subject to a minimum bonus of £200,000 per annum and an Additional Revenue Bonus of £100,000 if his revenues in any year exceeded €2 million. The bonus pool was a percentage of the aggregate revenues of the EGB Desk for the relevant period less the costs of employing the employees on the Desk.
4. On 30 July 2014 the claimant was placed on garden leave.
5. The period of garden leave continued until the claimant was dismissed on 7 November 2015. That dismissal is admitted to have been wrongful.

Contractual terms

6. The terms of the claimant's contract so far as material in my view to the issues before the court are as follows [C2/143]:

Clause 4.1 Salary/Payments/Allowances

"the Company shall during the employment of the Employee pay to the Employee a basic salary ("Salary") at the rate of £200,000 per annum (less tax, national insurance and other statutory deductions)."

Clause 5 Bonus

"5.1 Subject to the other provisions of this Agreement and except in respect of any period of Garden Leave, in addition to Salary, the Employee shall benefit from the bonus arrangements set out in the Schedule to this Agreement.

…

5.3 notwithstanding any other provision in this Agreement or part 1 to the contrary, bonus will only be payable to the Employee if and to the extent that the Employee has been at work and performing his duties for the Company throughout the relevant bonus period… "

Clause 6.1 Benefits

"The Employee shall be entitled to participate in the benefits set out in, and subject to the terms of, the Handbook as varied from time to time pertaining to Private Medical Insurance, Group Life Assurance and Group Income Protection. The employee will be eligible to participate in such benefits as from the date/s set out in the Handbook save that Private Medical Insurance Cover will commence on the Commencement Date."

Clause 10 Garden Leave

"10.1 During his notice period or any part or parts thereof, or at any other time, the Company may in its absolute discretion require the Employee to perform any such duties or other such duties (including without limitation research projects) as it may allocate to him or not to perform any of his duties and may require him not to have any contact with clients of the Company or any Group Company nor any contact with such employees of the Company and any Group Company as the Company shall determine and/or may exclude him from any premises of the Company or of any Group Company (without providing any reason therefor) provided always that throughout the period of any such action referred to in this Clause ("Garden Leave") the Employee's Salary and contractual benefits shall continue to accrue or be paid or provided subject to the other provisions of this Agreement and Part 1; and

10.2 that any such action taken on the part of the Company shall not constitute a breach of this Agreement or Part 1 of any kind whatsoever nor shall the Employee have any claim against the Company or any Group Company in respect of any such action; and

10.3 that he shall during any such period remain readily contactable and available for work and, should he fail to make himself available for work having been requested by the Company to attend, he shall, notwithstanding any other provision of this Agreement and without prejudice to the Company's other rights and remedies, forfeit his right to Salary, bonus or any other remuneration in respect of such period of non-availability." [emphasis added]

The schedule to the Service Agreement provided:

"except in respect of any period of Garden Leave,… the Company may in its sole discretion pay bonuses to the Employee from time to time on the basis of the bonus policy set out below…"

Witnesses

7. For the claimant I heard evidence from the claimant himself and for the defendant I heard evidence from Mr Vogels, who took the decision in 2014 to place the claimant on garden leave.
8. The claimant's witness statement was strikingly long and contained much material which in my view was irrelevant to the issues before the court. However the claimant's evidence in cross examination appeared to me to be on the whole honestly held.
9. The evidence of Mr Vogels in his witness statement was shown to be unsatisfactory in certain respects: paragraphs 18 and 23 of his witness statement suggested his involvement was from 1 April 2014 but it was his evidence in cross examination that he was involved before that. In paragraph 50 of his witness statement he suggested that the desk performance began to deteriorate sharply by early 2013 but he accepted in cross examination that there had been a substantial deterioration in the course of 2012. In my view his evidence in cross examination in relation to the press articles concerning the alleged upturn in bond trading was unsatisfactory given the volume of press coverage which he sought to discount. Where his evidence was in my view, unsatisfactory I have had particular regard to the evidence of the contemporaneous documentation including emails and the financial information.
10. Mr Vogels was criticised by counsel for the claimant in relation to his failure to be specific about his discussions with the other employees who were asked to take reductions in pay and/or bonuses. I accept that Mr Vogels was being asked to recall the chronology of discussions with various individuals in 2014 and 2015 against a background where the business was being cut across the board. I accept therefore that as a result he was not able to recall with accuracy when various discussions with particular employees took place and I do not criticise him for this.
11. In order to protect the confidentiality of financial information relating to individual employees and individual clients of the defendant, both employees and clients are identified by code numbers in this judgment.

Did the defendant promise to pay bonuses over the period of garden leave?

12. On 10 July 2014 there was a meeting between the claimant and Mr Vogels which was followed by an email to the claimant:

"we are proposing to make a change to your current contract with ICAP, whereby we remove your GMB, leaving all other contract details unchanged. We understand you want to think about this over your holiday. So we will continue this conversation in the week starting July 28" [C5/400]

13. By a letter of 1 August 2014 [C5/442] from Mr Vogels wrote to the claimant:

"I refer to our recent conversation regarding placing you on Garden Leave."

…

2 Pay. Whilst you are on Garden Leave you will be paid your Salary (less deductions) and receive your benefits in the usual way."[emphasis added]

14. The claimant relies on this letter and pleads that the terms of the claimant's garden leave included a duty to pay him a bonus in accordance with the schedule to the Service Agreement.
15. The claimant's evidence was that he expected his guaranteed minimum bonus to have been paid during the period of garden leave [Day 1/154/22; 162/23]. However it is unclear on what basis he expected this to have been paid and I accept the submission of counsel for the defendant that in the context of the claimant refusing to give up his guaranteed minimum bonus, it would seem odd if not absurd for the defendant then to put him on garden leave and promise to pay him the guaranteed minimum bonus.
16. There is no evidence that the question of payment of the guaranteed minimum bonus was discussed at the meeting on 10 July. On 14 July 2014 Mr Vogels asked whether the claimant's contract required the defendant to pay bonuses whilst on garden leave from which I infer that he was unaware of the position so was unlikely to have discussed it at the earlier meeting. [C5/399]
17. The letter of 1 August 2014 refers to the claimant receiving "your benefits". There is no defined term "benefits" in the Service Agreement. As a matter of the normal meaning of the word, a bonus is clearly a "benefit" but in the context of the Service Agreement there appears to be a distinction between "bonus arrangements" in clause 5.1 and "benefits" in clause 6.1 referring to Private Medical Insurance, Group Life Assurance and Group Income Protection. The staff handbook referred to in clause 6.1 also has a section headed "Benefits" referring to the benefits package rather than bonuses (although it does not define the term).
18. An interpretation of the term "benefits" in the letter of 1 August 2014 that the term was not intended to refer to bonuses is consistent with the factual background that it was an express term of clause 5.1 of the Service Agreement that the claimant was not entitled to bonuses in respect of any period of garden leave which read:

"5.1 Subject to the other provisions of this Agreement and except in respect of any period of Garden Leave, in addition to Salary, the Employee shall benefit from the bonus arrangements set out in the Schedule to this Agreement."

19. Further clause 5.3 stated that the bonus was only payable:

"if and to the extent that the Employee has been at work and performing his duties for the Company throughout the relevant bonus period… "

20. Accordingly for all these reasons I find that the terms of the claimant's garden leave did not include a duty to pay him a bonus.

Was it an implied term of the Service Agreement that the defendant would not exercise its discretion to place the claimant on garden leave or continue the period of garden leave irrationally or perversely?

If there was such an implied term was the decision to place and keep him on garden leave for 15 months in breach of the implied term?

21. The claimant pleaded (paragraph 13 of the Particulars of Claim) that the defendant was in breach of an implied term of rationality and/or an implied term of trust and confidence firstly, in placing the claimant on garden leave with effect from 30 July 2014 and secondly, in continuing the period of garden leave until 7 November 2015.
22. Counsel for the claimant, in closing submissions, accepted that there was a single decision under challenge and it was not an ongoing decision-making process. He accepted that the alleged breach is the decision to "place" on garden leave and although he noted that the claimant's "exasperation" would increase over a period of continuing breach, there was no decision to "keep" the claimant on garden leave. (I note for completeness that there are references in the correspondence [C6/497] to "reviews" taking place of the decision to keep the claimant on garden leave but Mr Vogels' evidence which I accept, is that no such reviews took place.) Accordingly I will deal only with the decision to place the claimant on garden leave.

Claimant's submissions

23. In relation to the decision to place the claimant on garden leave, counsel for the claimant submitted that Clause 10.1 conferred a discretion on the defendant but that such a discretion is not untrammelled: Baroness Hale in Braganza v BP Shipping Ltd [2015] ICR 449 at 18

"18 Contractual terms in which one party to the contract is given the power to exercise a discretion, or to form an opinion as to relevant facts, are extremely common. It is not for the courts to rewrite the parties' bargain for them, still less to substitute themselves for the contractually agreed decision-maker. Nevertheless, the party who is charged with making decisions which affect the rights of both parties to the contract has a clear conflict of interest. That conflict is heightened where there is a significant imbalance of power between the contracting parties as there often will be in an employment contract. The courts have therefore sought to ensure that such contractual powers are not abused. They have done so by implying a term as to the manner in which such powers may be exercised, a term which may vary according to the terms of the contract and the context in which the decision-making power is given." [emphasis added]

24. Counsel submitted that there are two limbs to the test: whether the right matters have been taken into account in reaching the decision and whether the result is "so outrageous that no reasonable decision-maker could have reached it" (Lady Hale at paragraphs 24-30 of Braganza). Having referred to the test of Lord Greene MR in Associated Provincial Picture Houses Ltd v Wednesbury Corpn [1948] 1 KB 223 , 233–234:

"The court is entitled to investigate the action of the local authority with a view to seeing whether they have taken into account matters which they ought not to take into account, or conversely, have refused to take into account or neglected to take into account matters which they ought to take into account. Once that question is answered in favour of the local authority, it may still be possible to say that, although the local authority have kept within the four corners of the matters which they ought to consider, they have nevertheless come to a conclusion so unreasonable that no reasonable authority could ever have come to it."

Lady Hale continued:

"The first limb focuses on the decision-making process—whether the right matters have been taken into account in reaching the decision. The second focuses on its outcome—whether, even though the right things have been taken into account, the result is so outrageous that no reasonable decision-maker could have reached it. The latter is often used as a shorthand for the Wednesbury principle, but without necessarily excluding the former…"

"30 It is clear, however, that unless the court can imply a term that the outcome be objectively reasonable—for example, a reasonable price or a reasonable term—the court will only imply a term that the decision-making process be lawful and rational in the public law sense, that the decision is made rationally (as well as in good faith) and consistently with its contractual purpose. For my part, I would include both limbs of the Wednesbury formulation in the rationality test. Indeed, I understand Lord Neuberger PSC (at para 103 of his judgment below) and I to be agreed as to the nature of the test."

25. I note that the Braganza duty was applied in Patural v DG Services UK Ltd [2016] IRLR 286 at 60 – 61.

Defendant's submissions

26. In the defence, the defendant denied that it owed any implied duty not to exercise its discretion to place the claimant on garden leave irrationally or perversely. Further if there was such a discretion the defendant denied that the defendant owed a duty to take relevant matters into account and not to take into account irrelevant matters.
27. Counsel for the defendant submitted that even if the duty exists, the decision to place the claimant on garden leave was not irrational.

Discussion

28. It seems to me on the authorities to which I was referred that there was an implied duty. I take from the judgements of the Supreme Court in Braganza that the question for the court is not whether the outcome for the claimant is objectively reasonable but whether the decision-making process is lawful and rational in the public law sense, that the decision is made rationally (as well as in good faith) and consistently with its contractual purpose. Further it seems to me following Braganza that the court needs to consider the two limbs of the test: whether the right matters have been taken into account in reaching the decision and secondly whether, even though the right things have been taken into account, the result is so outrageous that no reasonable decision-maker could have reached it.

If there was such an implied term was the decision to place and keep the claimant on garden leave for 15 months in breach of the implied term?

Claimant's submissions

29. Counsel for the claimant submitted that the defendant had a discretion to place the claimant on garden leave but must exercise the discretion "with care": paragraph 18 of Braganza.
30. Counsel for the claimant submitted that there was scope for abuse of a garden leave provision and relied on Simler J in Finn v Holliday [2014] IRLR 102 at 57:

"The scope for abuse by an employer of a garden leave provision is well recognised...."

31. Counsel for the claimant also relied on the case of Elsevier Limited v Robert Munro [2014] EWHC 2648 (QB) and the judgment of Warby J at [58]:

"There is a public policy against the compulsory sterilisation and potential atrophy of skills…"

and to the judgment of Dillon LJ in the earlier Court of Appeal authority of Provident Group plc v Hayward [1989] ICR 160 referred to in the judgment of Warby J.

32. Counsel for the claimant submitted that it can be implied from the decision of Cox J in TFS Derivatives v Morgan [2004] EWHC 3181 that the duty to act rationally is a control on the express right in the contract: in relation to a period of six months garden leave, Cox J said at [80]:

"the effect of it would be to keep this defendant out of employment completely and unable, therefore, to exercise his skills as a broker in any capacity. A broker's skills in the marketplace would tend, it seems to me, to atrophy at least to some extent during six months enforced leave. That would be neither reasonable inter partes nor in the public interest."

and [82]:

"… a six months enforced period of garden leave, even if in accordance with an express term of the contract, would in any event be likely to face resistance on the basis that its use amounts to a breach of the implied term of trust and confidence…."

33. Counsel for the claimant submitted that there is recognition in the authorities that long periods of garden leave are capable of abuse and that there is a public policy against the sterilisation of workers that are relevant in considering whether an employer's actions are reasonable or unreasonable.
34. Counsel for the claimant submitted in closing that the reasons given in the defence for putting the claimant on garden leave were "a comprehensive body of reasons" and "they do not add up". The decision-making process was "confused" and "opaque" which is not the approach of an honest and rational decision-maker. Counsel submitted that even if the issue about the revenue performance were true, it does not mean that this was the motivating factor in circumstances where much of the body of reasons that were advanced have been found to be wrong.

Defendant's submissions

35. Counsel for the defendant submitted that clause 10.1 gave the defendant an absolute discretion. The claimant had to establish that this discretion was exercised irrationally, and thus the claimant has to surmount a high hurdle: Lord Diplock in CCSU v Minister for the Civil Service [1985] AC 374 at 410. The judgment of Mummery LJ in Keen v Commerzbank [2006] EWCA Civ 1536 at 59:

" it would require an overwhelming case to persuade the court to find that the level of a discretionary bonus payment was irrational or perverse in an area where so much must depend on the discretionary judgment of the bank in fluctuating market and labour conditions."

36. It was a contractual discretion for the defendant's benefit. It was not a discretion in respect of a finding of fact as was the case in Braganza. Lord Hodge at 56 – 57:

"56 The scope for such scrutiny differs according to the nature of the decision which an employer makes. In this case clause 7 gave the employee a prima facie entitlement to the death benefit unless BP could satisfy itself of a factual circumstance which excluded the benefit. The nature of the exercise which BP had to undertake in deciding the cause of death was very different from the assessment of whether an employee was entitled to a discretionary bonus, which is an exercise that involves a qualitative judgment of the employee's performance.

57 In cases such as Clark v Nomura International plc , Keen v Commerzbank AG and Horkulak v Cantor Fitzgerald International [2005] ICR 402 the courts have reviewed contractual decisions on the grant of performance-related bonuses where there were no specific criteria of performance or established formulae for calculating a bonus. In such cases the employee is entitled to a bona fide and rational exercise by the employer of its discretion. The courts are charged with enforcing that entitlement but there is little scope for intensive scrutiny of the decision-making process. The courts are in a much better position to review the good faith and rationality of the decision-making process where the issue is whether or not a state of fact existed, such as whether an employee's wilful act caused his death. The decision of the employer is not a judicial determination and the court cannot expect judicial reasoning. But I see no reason why an employer's decision-making should be subject to scrutiny that is any less intense than that which the court applies to the decision of a public authority which is charged with making a finding of fact..." [Emphasis added]

37. Counsel referred to the employment decisions that where an employee who refuses to agree a reduction in pay, an employer will have a fair reason for dismissal so long as the employer considers that he has a sound business reason for that decision and the decision is not whimsical unworthy or trivial.
38. The claimant did not complain about being put on garden leave – he raised it only in December 2014 [C6/495/1312]

"as you will know, you are not entitled to keep me on garden leave indefinitely and I again request clarification of your position on this"

39. The reasons given in the defence were largely made out and the focus should be on the claim that it was irrational to take into account desk performance and the performance of the defendant and that as advanced by the claimant, some matters were not taken into account which should have been.

Discussion

40. I accept that it is a high hurdle for the claimant to establish irrationality. I note that the issue in this case is the decision to place the claimant on garden leave and it is not a case such as Keen which related to the decision to pay a discretionary bonus. Nevertheless I accept that the contract did not require the defendant to take into account or to exclude any particular matter in deciding whether or not to place the claimant on garden leave and I accept the principle laid down by Lord Hodge in Braganza that in a case such as this,

"the employee is entitled to a bona fide and rational exercise by the employer of its discretion. The courts are charged with enforcing that entitlement but there is little scope for intensive scrutiny of the decision-making process."

41. I do not accept on the authorities, the defendant's submission that the implied term of irrationality does not fall to be implied because here the court is not concerned with a contractual discretion intended to benefit an employee but a discretion included in the contract for the benefit of the defendant. Even if I am wrong on this, the evidence of Mr Vogels was that the garden leave provision was intended to benefit the claimant as he would continue to be paid his salary and benefits whilst the settlement package was negotiated.
42. Simler J in Finn v Holliday was concerned with a claim which arose out of the defendant's resignation and his desire to join a competitor. Having received the defendant's letter of resignation, the claimant in that case exercised an express contractual right to place the defendant on garden leave and sought to hold him to his twelve-month contractual notice period. An interlocutory injunction was granted and the matter then came before Simler J. It was against that background that Simler J had to consider the garden leave provision and said that

"57 During the currency of the employment relationship, when an express negative covenant or the implied duty of good faith apply to prevent an employee working for another employer, the doctrine of restraint of trade will not apply to such a restraint; nor is there a need to justify an express contractual garden leave provision by reference to this doctrine. However in circumstances where an employer has put an employee on garden leave and then seeks an injunction to restrain the unwilling employee from joining a competitor before the expiry of his notice period, an injunction to enforce or aid that period of garden leave must be considered in light of the restraint of trade doctrine. The fact that the employee agreed to the contractual provisions may be a factor in the court's consideration but it is not the only or primary factor. The scope for abuse by an employer of a garden leave provision is well recognised and I agree with Mr Quinn, that public policy considerations compel consideration of the restraint of trade doctrine in this context." [Emphasis added]

It seems to me therefore that this was in a very different context from the present circumstances where there has been no attempt by the employer to use the garden leave provision to restrain the claimant from leaving his employment and therefore it is very different from the authorities where the restraint of trade doctrine is engaged.

43. The reasons for the decision to place the claimant on garden leave are set out at paragraph 17.2 of the defence [A/3/20] and (so far as relevant to the issues) in summary are as follows:

i) From the financial year 2010/2011 to 2014/2015 the desk performance slumped from a profit of approximately £3 million to a loss of nearly £680,000. Revenues in the same period fell from approximately £10.1 million to approximately £3.5 million.

ii) The revenues generated by the claimant from 2011 declined significantly.

iii) The claimant had been allocated a high number of profitable clients and given his responsibility for the more profitable lines, the subsequent deterioration in his revenue generation had a pronounced negative effect on the desk.

iv) In June/July 2004 Mr Vogels reviewed the performance of the desk and concluded that the claimant's revenue generation:

"fell substantially short of expectations and was not compensated for by his managerial or leadership performance".

Mr Vogels concluded that the level of contractual remuneration which the claimant was receiving could not be commercially justified and was a disproportionate drain on the desk's resources.

v) Mr Vogels had asked a number of other individuals on the desk to vary their contracts to adjust their remuneration to ensure the desk remained profitable. A number of other employees agreed to contractual variations to their remuneration. The claimant's role as a director meant that he needed to set an example to the other members of the desk.

vi) Mr Vogels asked the claimant to accept a variation to his contract by removing his entitlement to a guaranteed minimum bonus award. The claimant stated he would not accept any changes to his remuneration. The refusal to do so reflected a failure on his part to:

"understand and adapt to the commercial realities of the desk's reduced revenue earning position."

"In the circumstances" the defendant decided it was appropriate to place the claimant on garden leave.

44. Counsel for the claimant accepted in his closing submissions that it is not the role of the court to undertake intensive scrutiny of the underlying reasons and stated that he was not inviting the court to scrutinise the underlying financials.
45. Nevertheless the evidence as to the overall performance of desk was clear from the management accounts which were before the court and I set out below the key figures for revenues and profits for the relevant financial years to 31 March.

Financial year ending 31 March	Revenues of EGB desk	Bonus pool	Profit
2010/2011	£10.15 million		£3.13 million
2011/2012	£9.48 million	£2,094,781	£2.94 million
2012/13	£5.35 million	£481,655	£803,000
2013/14	£4.09 million	£164,703	(£93,000)
2014/2015	£3.50 million		(£684,000)

46. The decline in the individual revenues of the claimant was also evident from the financial information before the court for the relevant bonus years to 30^th September:

2010/2011	€3.22 million
2011/2012	€1.78 million
2012/2013	€1.22 million
2013 (- July 2014)	€468,612

47. Mr Vogels accepted in cross examination that at the meeting on 10 July 2014 he did not discuss the claimant's own financial performance [Day 2/96/20–22]. However this is not inconsistent in my view with paragraph 75 of his witness statement in which Mr Vogels said that he "approached" the claimant to ask him to agree to the removal of the guaranteed minimum bonus because of his

"concern about the declining revenues and performances of both him and the desk."

It is clear on the evidence that the decision was based on the financial impact of the claimant's employment against the background of the declining revenues of the desk. Mr Vogels stated in cross examination:

"I knew Mr Faieta was a very senior member on the desk and had been able to generate more revenue in the past than he was able to generate at the time that we had this discussion, and sadly the reality had changed whereby the revenues that he created were no longer commensurate with the amount of money that we were paying him and that was really what was going through my mind." [Day 2/141/2 – 9]

48. One of the reasons given in the defence was that the claimant's decline in revenues was "not compensated for by his managerial or leadership performance". Mr Vogels' evidence on this in cross examination was initially that he did not have regard to this and the decision was "performance related". He then stated that he had changed his mind and said that it was a factor although not a major factor [Day 2/134 – 135]. In my view on the evidence it is likely that Mr Vogels' initial response in cross examination was correct rather than his response when pressed, and this was not a factor which weighed with Mr Vogels in reaching his decision.
49. It was also established in cross examination that the claimant had not been "allocated" profitable clients as alleged in the defence: at paragraph 66 of his witness statement Mr Vogels' evidence was that he was not suggesting that there was a "formal process of client allocation by the desk head" but that the claimant was the person on the desk who primarily dealt with the clients identified. Mr Vogels accepted in cross examination that Mr Vogels did not have in his mind at the relevant time that he thought the claimant was responsible for more profitable lines. [Day 2/140/22]
50. Further it was evident on the evidence that, contrary to what was alleged in the defence, other employees had not taken cuts in salary prior to the claimant being asked to do so. The three employees identified in Mr Vogels' witness statement (at paragraph 62) are Employees 36, Employee 27 and Employee 24. In his witness statement Mr Vogels said that Employee 36 agreed to reduce his salary from £75,000-£50,000 per annum at a meeting in November 2014. He also stated that Employee 36 had a performance clause in his employment contract which provided that his salary could be unilaterally reduced if he failed to hit revenue targets. Employee 27 also had a performance clause in his contract and was asked in February 2015 to reduce his remuneration which he agreed to do, reducing his salary from £100,000 to £83,000 from March 2015. In relation to Employee 24 Mr Vogels stated in his witness statement, that this employee agreed to forego his guaranteed minimum bonus of £100,000 per annum in or around October 2015 although his evidence in cross examination was that in fact the amendment was never signed.
51. Mr Vogels was vague in cross examination about when conversations took place with employees. He attributed this to the fact that there was a business wide review going on at that time and he was having numerous conversations across the business. Counsel for the claimant submitted that his evidence has to be viewed against the email of 7 July 2014 to Mr Vogels from the then head of the EGB desk referring to getting the cost process "started as soon as possible" [C5/ 390/982]
52. Employee 36 had a performance clause so the defendant was entitled to reduce his salary. Mr Vogels agreed that the reduction in his case of £25,000 per annum was not a significant sum noting that he was not a "really big earner."
53. Employee 27 accepted a reduction from a £100,000 to £83,000. It was put to Mr Vogels that the reduction in this case was tiny, however Mr Vogels said that they made small adjustments as well as sometimes bigger adjustments. This employee had a performance clause that was in operation from March 2015.
54. In relation to Employee 24 Mr Vogels' evidence in cross examination was that he:

"had a discussion with Employee 24 to say that if he could not agree to a reduction in his [guaranteed minimum bonus] then we had to review the position. But employee 24 took the view to say "I am prepared to talk about it" and in the end agreed to waive his bonus, but not have it documented as such in his contract."[Day2/128/20-25]

55. It was put to Mr Vogels that when he had the discussion with Employee 24 he did not say to him "you need to agree this or you will be put on gardening leave". Mr Vogels' evidence was that he was never in a position where he felt he needed to have that conversation. Mr Vogels said that the conversations with Employee 24 were more amicable and resulted in an outcome that was acceptable for both parties. It was put to Mr Vogels that he moved with great speed in relation to getting the claimant out of the business. Mr Vogels evidence was that he started with the "biggest cost save" and he dealt with that at the outset because that was going to be the biggest Delta in making the cost base of the desk better. [Day 2/131/6 – 12]
56. In relation to the need for the claimant to set an example to other members of the desk (as alleged in the defence), Mr Vogels was asked in cross examination whether he had that in mind on 30 July 2014. Mr Vogels' evidence was that at that time the claimant was responsible for running the desk and he would have expected him to set an example and be helpful in getting the business on an economic better footing. [Day 2/142/12 – 21]
57. Counsel for the claimant submitted that there was no evidence of the thought process behind the decision. Counsel for the claimant submitted that the defendant did not say "we are going to terminate your contract, we recognise that this is a breach of contract, we are going to put you on garden leave but if you can find another job to mitigate your losses then that will be great for both of us". The claimant was told explicitly in the garden leave letter that his duties as an employee continued and there was an express provision in the garden leave clause which stated that he must remain available to work.
58. Mr Vogels' evidence to the court was that the claimant was put on garden leave whilst the defendant sought to negotiate his final package.

"By putting Mr Faieta on garden leave, we gave a signal that we were letting him go. We were intending to reach a reasonable, fair settlement with him. I have had that conversation with many people at the time and in every single one this is exactly what happened. Sadly, in Mr Faieta's case, we could not get to that point." [Day 2/143/18 – 23]

59. This is supported by the contemporaneous documentation. On 7 July 2014 Mr Vogels asked HR for severance pay details and in September 2014 there was a meeting between the defendant and the claimant with a view to reaching a settlement.
60. It was put to Mr Vogels in cross examination that the claimant was kept on garden leave so that he would not be able to work anywhere else. Mr Vogels responded:

"In this particular case, with respect, not at all. We kept him on garden leave so that at least Mr Faieta had some income and benefits while we were trying in good faith to negotiate an exit package with Mr Faieta. We had really not in mind at all to enforce the garden leave provision for competitive reasons. We would have been delighted if Mr Faieta had said to us, "I have found another job. Let us settle our employment contract issues and I can move on with my life." That is honestly what we hoped would happen." [Day 2/151/1 – 10]

Conclusion

61. I find on the evidence that the reason for placing the claimant on garden leave was that the revenues of the desk were declining and the claimant had an entitlement to a guaranteed minimum bonus which in the view of the defendant was not sustainable against the background of declining revenues on the desk. The defendant therefore gave the claimant a binary choice to accept a change in his contract to give up the guaranteed minimum bonus or to leave the defendant. [Day 2/ 101 line 1 – 4] As the claimant was unwilling to accept a change in his contract terms, the defendant placed the claimant on garden leave whilst it negotiated a settlement package.
62. Counsel for the claimant submitted that the claimant was prepared to waive a substantial sum of money namely £100,000 in 2012 in order to face the economic reality. However in 2014 Mr Vogels just gave him a binary option to change his contract or to part ways. Accordingly there was no explanation for why he needed to go on garden leave.
63. Whilst I accept that a number of the reasons that were advanced in the defence for putting the claimant on garden leave have been shown on the evidence to be wrong, I do not accept that the decision-making process was confused or that the fact that some of the reasons advanced have been shown to be incorrect, renders the decision-making process irrational. On the evidence, the motivating factor for the decision to place him on garden leave was in my view the revenue performance. I accept the evidence of Mr Vogels:

"the reality had changed whereby the revenues that he created were no longer commensurate with the amount of money that we were paying him"

64. In cross examination the explanation given by Mr Vogels as to why he was presented with a binary option was as follows:

"is that the context in which you were seeking the severance calculation being prepared for the outcome?"

"yes I knew Mr Faieta to be not particularly flexible, especially when it came to his contractual situation, so I was preparing for an unfavourable outcome, yes" [Day 2/page 92]

65. The claimant had been willing to give up a significant sum in 2012 in order to secure a five-year fixed contract. However the contemporaneous documentation supports Mr Vogels explanation that in July 2014 the claimant was not willing to negotiate in relation to his guaranteed minimum bonus and in those circumstances Mr Vogels' position was that the claimant would be placed on garden leave whilst a settlement to terminate his employment was negotiated. Mr Vogels' email of 7 July 2014 to the head of the desk stated:

"I am aware this will be a difficult conversation and we have to be prepared for the outcome." [C5/390/982]

66. Mr Vogels' assessment of the claimant's likely reaction, in my view, provides an explanation why he adopted a different approach to Employee 24 and this is borne out by the evidence referred to above. The fact that a different approach was adopted in relation to Employee 24 does not make the decision in relation to the claimant irrational. Further as Mr Vogels stated, the claimant's package had the biggest effect on the desk; the claimant was the "biggest cost save".
67. Whilst the claimant was entitled to refuse to change his contract terms, the defendant had a discretion under the contract to place the claimant on garden leave and in the circumstances, for the reasons set out above, the decision to do so was not irrational.

Have the right matters have been taken into account in reaching the decision?

68. Counsel for the claimant submitted that the defendant sought unilaterally to cut the claimant's pay because it believed the deal no longer worked: Mr Vogels took no account of the impact upon the claimant, the impact on his skills, in particular the atrophy of his skills, and on his reputation.
69. Counsel for the defendant submitted that the contract did not require the defendant to take into account or to exclude any particular matter. Thus the choice of which considerations to be taken into account was one for the defendant subject only to the limits of rationality. Laws LJ in Khatun v Newham London Borough Council [2004] EWCA Civ 55 at [35]:

"...where a statute conferring discretionary power provides no lexicon of the matters to be treated as relevant by the decision-maker, then it is for the decision-maker and not the court to conclude what is relevant subject only to Wednesbury review…"

70. The authority of Elsevier relied on by counsel for the claimant (and referred to above) has to be read in the context of the judgment and the relevant passages as follows:

"56 … It is submitted on the Defendant's behalf, however, that enforcement of his notice period obligations in the way that is sought would compel him either to work for the Claimant or to "face idleness" and that in these circumstances the Court's discretion should be exercised in the light of principles developed in cases concerned with the interaction between an employee's legitimate concern to work and the use of "garden leave" clauses. A garden leave clause is one which confers on the employer an express contractual right not to provide any work to the employee during the period of notice. The argument, in summary, is that it is not enough for the Defendant to be paid, he also has a legitimate concern to work; if he does not work for the Claimant and the injunction is granted as sought he cannot work for anybody else; he does not wish to work for the Claimant and cannot be forced to do so; hence, the practical effect of the grant of the injunction would be to compel idleness for the remainder of the notice period.

57 In my judgment this argument is ill-founded. The authorities relied on, which include the decisions of the Court of Appeal in Provident Financial Group v Hayward [1989] ICR 160 , 165E, 168C to D per Dillon LJ and William Hill Organisation Ltd v Tucker [1999] ICR 291 , 301H-302A, as well as GFI Group v Eaglestone [1994] IRLR 119 and JM Finn and Co Ltd v Holliday (above), acknowledge the potential for abuse that is inherent in the exercise of the employer's rights under a garden leave provision. As Simler J explained in JM Finn and Co , [60]:

"…the Court will be astute to recognise that the practice of long periods of garden leave is obviously capable of abuse. It is a weapon in the hands of the employer that might be used to ensure that an ambitious employee will not give notice if he is going to be unable to work at all for anyone else for a long period of notice…"

Thus, where an employer puts an employee on garden leave and then seeks an injunction to restrain them from working for another, public policy considerations compel the Court to approach the exercise of its discretion in the light of the doctrine of restraint of trade; the result may be that the Court grants no injunction, or one more limited in scope than the contractual provision: JM Finn & Co Ltd [57], [59]."

"58 The reason the law has developed in this way is, however, that in such cases the employer is exercising its contractual rights in such a way as to force the employee to be "idle" or, to put it more simply, not to work. There is a public policy against the compulsory sterilisation and potential atrophy of skills…" [Emphasis added]

71. Counsel for the claimant submitted that it is nevertheless abuse as a result of the potential atrophy of his skills. I do not accept the submission however that the claimant could not have sought work during the period of garden leave; there is nothing in my view to prevent this in his contract. I accept that the claimant would have needed to be released from his contract in order to take up any employment. However there is no evidence that in this case the defendant was using garden leave as a weapon to keep the claimant and prevent him going to a competitor (as referred to by Simler J in Finn and discussed above). In fact the reverse appears to be true, the evidence of Mr Vogels (referred to above) was that he would have been happy to release the claimant from his contract.
72. The claimant relies on the evidence of the emails [C6/497]

"we require you to remain on garden leave "

and [C6/549] in July 2015:

"[we] require you to remain on garden leave".

The claimant submits that this brooks no possibility that the claimant was free to take up alternative work.

73. However in my view, given the declining performance of the desk, the evidence of Mr Vogels in this regard would appear to accord with the financial context and it is therefore entirely credible that the defendant would not wish to keep on paying a salary of £200,000 per annum for any longer than was necessary.
74. There is an inevitable atrophy of skills through a period of garden leave. It does not however make the decision of the defendant to place him on garden leave irrational given the circumstances of the decision in this case. I note that the evidence of Mr Vogels was that it was never the defendant's intention to have the claimant on garden leave for a very long period of time. [Day 2/132/10 – 12]
75. I do not accept that on the evidence, placing the claimant on garden leave of itself would have an adverse impact on his reputation such that this should have been taken into account by the defendant. The decision to cut off his Bloomberg access may have been detrimental viewed from the claimant's perspective as it made public the fact that he was no longer working for the defendant but the evidence of Mr Vogels as to the cost of providing a Bloomberg terminal (£22,000 per annum), at a time when the business overall was seeking to reduce costs, provides a reason for stopping his access to Bloomberg which cannot be said to be irrational.
76. Accordingly in my view it cannot be said that the defendant has taken into account matters which they ought not to take into account, or conversely, has refused to take into account or neglected to take into account matters which they ought to take into account.

Is there a breach of the implied term of trust and confidence?

77. The claimant's pleaded case is that it was an implied term that the defendant would not without reasonable and proper cause act in a manner calculated or likely to breach or seriously undermine the relationship of trust and confidence between itself and the claimant. The claimant further pleads that it was an aspect of the implied term of trust and confidence that the defendant would give reasons for an exercise of discretion to place the claimant on garden leave and/or to continue any period of garden leave. (Paragraph 6 and 7 of the Particulars of Claim)
78. Counsel for the claimant submitted that the claimant's financial performance was not explained to the claimant in the meeting and was no part of the reasons given to him: Keen at [110]

"I accept that the implied duty of trust and confidence between employer and employee will, generally, require an employer to give his reasons for the exercise his discretion to pay or withhold a bonus and to identify the decision-maker…"

79. Counsel for the defendant submitted that a key element is whether there was "reasonable and proper cause" and here there were sound business reasons for the defendant's approach. Thus there cannot be a breach of the implied term of trust and confidence: SW Global Resourcing Ltd v Docherty [2012] IRLR 727 at 54.
80. Counsel for the defendant also submitted that in relation to a contractual discretion, the role for the implied term of trust and confidence is limited to a duty to give reasons: Keen.
81. Counsel for the claimant submitted that there was a misplaced reliance by counsel for the defendant on Lord Neuberger in Braganza in suggesting that there was no scope for the implied duty of trust and confidence. Counsel for the claimant relied on the dicta of Lord Hodge and Lady Hale referred to above, and the abuse that needs to be controlled by the implied term.
82. I do not accept that the authority of Keen establishes that the role of the implied term is limited to a duty to give reasons. However I do accept that the question is whether or not the defendant has acted with "reasonable and proper cause". I have found on the evidence that the reason for placing the claimant on garden leave was that the revenues of the desk were declining, the claimant had an entitlement to a guaranteed minimum bonus which in the view of the defendant was not sustainable against the background of declining revenues on the desk; as the claimant was unwilling to accept a change in his contract terms, the defendant placed the claimant on garden leave whilst it negotiated a settlement package. Accordingly the evidence establishes that the defendant had business reasons for its decision that were not arbitrary and the defendant acted with reasonable and proper cause.
83. In so far as the duty is a duty to give reasons, in my view the evidence is clear that the claimant was aware of the reasons why he was placed on garden leave. In cross examination, the claimant was asked about the conversation on 10 July with Mr Vogels. The claimant's evidence was that Mr Vogels said that the market conditions were not great and the EGB Desk was not doing well. The claimant acknowledged that Mr Vogels explained that the Desk was performing badly. The claimant said that he knew his own revenues were down but this was not discussed at the meeting. The claimant said that Mr Vogels:

"told me I had two options; either give up my guaranteed minimum bonus or carry on further conversations with HR and legal."

Counsel for the defendant then put to the claimant:

"So it was in that context, in other words the context of the discussion about the state of the market, the state of the European government bonds desk, and your own knowledge about those matters, and your own knowledge about your revenues, that he asked you to give up your guaranteed minimum bonus; correct?"

The claimant replied:

"Correct "

84. On the evidence therefore I find that no breach has been established of the duty to give reasons.

Losses for Wrongful Dismissal

85. In view of my finding in relation to the garden leave claim, the claimant is not entitled to damages for the period which he spent on garden leave to 6 November 2015. The defendant admits however that the claimant was wrongfully dismissed on 7 November 2015 and the claimant is entitled to receive his salary, pension contributions and guaranteed minimum bonus in respect of the period from 7 November 2015 to 30 September 2017. The claimant accepted in cross examination that he did not replace the benefits of private health insurance, life assurance or income protection insurance.

Discretionary bonus and Additional Revenue Bonus

86. The claimant's case is that he would have been able to secure the Additional Revenue Bonus and a discretionary bonus had his employment continued.
87. Counsel for the defendant submitted that the claimant had no "real and substantial" chance of being awarded an Additional Revenue Bonus or a discretionary bonus after July 2014: Allied Maples Group Ltd v Simmons and Simmons [1995] WLR 1602.
88. Counsel for the claimant submitted that in 2016 there was a marked and significant change in the market and in addition there was a broadening of market opportunities including to non-bank institutions and those were ones which the claimant was particularly well placed to pursue given his background and experience.
89. In his witness statement the claimant accepted that by the time he was placed on garden leave, his revenues had declined but he stated that markets are cyclical and sometimes volatile. He further stated that:

"I am confident that with the opening up of a broader client base and more liquidity from my existing clients, I would have generated increasingly more business and created even more liquidity for the desk. Often, I produced 20 – 25% of the total desk revenue and with me doing increasingly more business both between my own clients but also with other brokers on the desk, then the EGB Desk would become increasingly profitable. The potential addition of one or two hedge fund salesmen with good relationships would only increase overall volumes and desk liquidity and revenues." (Paragraph 211)

"I feel strongly that my volumes and revenues would have picked up on the second of 2014, the 2015 would been a good year 2016 and 2017 would have been my strongest and most profitable years ever." (Paragraph 218)

"whilst it is correct to say revenue numbers had dropped by the time I was placed on garden leave on 30 July 2014, there are a number of contributing factors e.g. the uncertainty and rumours being spread on a daily basis about pay cuts, the desk being shut down, losing both [employee 25] and [another] as bosses within a year, lack of continuity. These factors were outside my control…" (Paragraph 227)

90. The Additional Revenue Bonus was only payable if the claimant's revenues in any year exceeded €2 million [C5/396]. As referred to above his revenues from 2010 – 2014 were declining and were well below €2 million. Further the possibility of the claimant generating revenues in this order of magnitude have to be weighed against the actual revenues generated by the EGB Desk for the relevant years. In the 2015/16 financial year the EGB Desk generated revenues of £2.1 million and made a loss of £1.14 million. In the last nine months before it closed in January 2017, the EGB Desk generated revenues of £940,000 and made a loss of £1.3 million.
91. In relation to the discretionary bonus, this would only be paid after the guaranteed minimum bonus had been paid.
92. In cross examination the claimant was taken through the schedule produced by the defendant which demonstrated the amount which the claimant would have had to have earned in order to ensure that the bonus pool had sufficient revenues to allow for payment of his guaranteed minimum bonus. The schedule demonstrated that for 2015/16 when the total revenues by the desk in that year were £2.15 million and the actual bonus pool showed a negative £612,850, an additional £1.8 million would have needed to be generated in order to provide a bonus pool to pay the guaranteed minimum bonus of £200,000. The claimant accepted that in circumstances where the entire desk generated revenues of just over £2 million, it was "unlikely" that he would be able to generate £1.8 million [Day 2/20/14]. Further the claimant acknowledged that this would simply give a bonus pool to pay his guaranteed minimum bonus so it would not leave money for any other bonuses to be paid either to other people on the desk or to himself.
93. The evidence in relation to 2016/17 was that an additional £1.83 million would have to be generated in order to generate a bonus pool of £200,000 when the total revenue for the nine months to January 2017 was £940,000. I note that the costs of the claimant's salary were not included from November 2015 so additional revenue would have had to have been generated before any additional bonus would become payable.
94. The claimant accepted in his evidence that other brokers would be paid their bonuses before he received any additional discretionary bonus. He also accepted that there was no entitlement to be paid out of central funds. I note that in 2013/14 the bonus pool was £164,000 approximately so the claimant's guaranteed minimum bonus exceeded the amount available and no additional bonus was paid. In 2014/15 total bonuses paid were £200,000. In 2015/16 a management bonus of £50,000 was paid. In 2016/17 no discretionary bonuses were paid.

Change in market sentiment and new opportunities in the market.

95. The claimant's evidence was that the desk had failed to tap in to the new marketplace that was available to it. His evidence was that the sentiment in the bond markets began changing in 2016. The claimant referred to an interview that Mr Vogels gave with Reuters that the banks were happy for brokers to call their customers and there was a bigger market out there. The claimant said:

"had I been there on that desk, I can say categorically that I would have pushed like crazy to expand the customer base using my knowledge that I had built up over the years as a salesman. I would have got other guys on board and we would have started calling other customers."

96. Mr Vogels was referred to an article in April 2015 suggesting that JP Morgan's profit had risen as fixed income trading rebounded, another article in April 2015 in relation to Morgan Stanley saying that revenue from fixed income sales and trading had climbed 15%, an article that Deutsche Bank had posted near-record revenue helped by increases in debt and equity trading. Mr Vogels' evidence was that one quarter of good trading did not mean an upturn in the market as a whole and was not reflected in the defendant's numbers.
97. Mr Vogels was referred to reports in July 2016 that JP Morgan Chase had seen a jump in fixed income trading revenue. Then in October 2016 a report in relation to JP Morgan stated that there had been a 48% gain in fixed income revenue fuelled by trading of government bonds after the UK voted to leave the European Union. A report in relation to Citigroup recorded trading surged 35% and in relation to Bank of America, Goldman Sachs, Morgan Stanley and a number of others, increases were reported in bond trading. Mr Vogels accepted in cross examination that there had been an increase in bond trading for that quarter and that reports in March 2017 demonstrated a continuation of the pattern that emerged in the previous quarter.
98. The claimant referred to his ability to access new clients as banks no longer prevented brokers from dealing with their clients directly. He said that this increased new freedom would have been a "fantastic opportunity" for him to cover a much wider and untapped client base and as such liquidity and volumes would "increase substantially". He said he was the "only person on the EGB desk with experience in talking to these potential new clients". He said that as a bond salesman he had covered some high-profile clients and he was comfortable talking to these clients (Paragraphs 200 and 201 of his witness statement).
99. The claimant relied on a statement in an article by Mr Vogels on 4 January 2017 published by Reuters in which he was quoted as saying:

"we now ask banks if they want us to trade directly for their clients. Sometimes the answer is yes and sometimes its no, but a few years ago asking the question would have ended our relationship."

100. Mr Vogels in cross examination denied that there had been a change in the market. His evidence was that:

"the door is at best ajar"

and

"certain banks still have big problems with others talking to buy side firms. And it was simply a way for me to test the water a little bit to see what kind of reaction I would get if I will put this out in the press." [Day 3/31 – 32]

101. It was put to Mr Vogels that this was some 18 months after Bloomberg were reporting BlackRock as saying that the business model of interdealer brokers had been totally turned upside down. Mr Vogels denied that it was the case that the interdealer brokers were now talking to buy-side firms and said that one of the reasons for this is that most buy-side firms want to execute electronically.
102. Even if there were new opportunities in the interdealer broking market, I do not accept that the claimant has established any particular skills which he could bring to bear in relation to this market. In his witness statement (as quoted above) the claimant refers to having the experience to talk to these clients, however he had not been employed by a bank since 1997 so the significance of any such experience appears to be considerably diminished.
103. The evidence of the declining performance of the EGB Desk and the cuts across the business in my view does not support an inference that in the period from mid-2014 to 2017, the defendant would have been prepared to recruit additional salesmen as suggested by the claimant. The uncertainty about pay cuts and the desk being shut down would it seemed to me only have been removed had there been a dramatic turnaround in revenues of the EGB Desk.
104. The EGB desk closed in January 2017 so even accepting the upturn in the market, there would only have been three months from mid-2016 to generate sufficient additional revenue in the bonus year ending 30 September 2016 to pay bonuses and a similar period of three months in the bonus year starting 1 October 2016 until the desk was closed in January 2017.

Transfer to new desk in January 2017

105. The EGB Desk was closed in January 2017. The claim for an additional discretionary bonus for 2016/17 is therefore on the basis that the claimant would have been offered a job by Tulletts and that the claimant would have been given a contract with a £200,000 guaranteed minimum bonus. Counsel for the claimant submitted that there was every prospect that the claimant would have transferred to a new broking desk under the new enlarged business of TP ICAP. Counsel submitted that the court is not precluded from looking at this prospect by the authority of Lavarack v Woods [1967] 1 QB 278 because the term of his contract extended until 30 September 2017 and the ICAP broking business was brought into the enlarged group in December 2016.
106. The claimant's evidence in cross examination was that it was "highly likely" that he would have gone over to Tulletts when the EGB desk closed in January 2017. Further with his existing client relationships and the ability to contact traders that he knew at hedge funds that he was not previously allowed to cover, it was "highly probable" that he would have earned a substantial bonus for the last eight or nine months of his contract [Day 2/26 – 27]. However the claimant was unable to say whether he would have had a different contract with Tulletts.
107. The evidence of Mr Vogels in cross examination was that on 30 December 2016 Tullett Prebon acquired the global broking business of ICAP. The employees on the EGB desk continued their employment. The EGB desk was closed in January 2017, there was a redundancy programme which affected all members of the desk. Other parts of the business were then asked if they had interest in any of the people that were part of the redundancy programme. There was interest in some people, terms were negotiated with those people and they joined the respective businesses. [Day 3/58/11 – 25] There was no documentary evidence before the court as to what happened.
108. The evidence before the court suggests that following the merger, had the claimant been working on the desk at the time it was closed, he would have been made redundant but may have been offered employment elsewhere in the Group. The evidence suggested that these were different businesses and it seems to me that the claimant is seeking to show that he would have received compensation under a future agreement which the defendant (or another company in the same Group) did not make but might have done if they wished. This appears to me to fall foul of the dictum of Diplock LJ in Lavarack v Woods:

"I know of no principle upon which he can claim as damages for breach of one service agreement compensation for remuneration which might become due under some imaginary future agreement which the defendants did not make with him but might done if they wished."

109. I do not accept the submission of counsel for the claimant that in this case the court can take into account what would have happened to the claimant because the term of the contract was until 30 September 2017 and thus the question of loss of a chance is within the contractual period of notice. It would appear that the defendant would have had no legal obligation to re-employ the claimant within the Group following the decision to close the desk and make the employees redundant. The desk closed and the claimant cannot claim an entitlement to a bonus under an alternative contract which might have come into existence.
110. Even if I am wrong on this, the claimant has not established on the evidence that there is a real and substantial chance that he would have received a bonus under such an alternative contract the existence and terms of which are entirely speculative, given the lack of evidence.

Conclusion

111. In my view even accepting the evidence that the market generally had picked up from mid-2016, given the revenues generated by the claimant in the past and the scale of the shortfall in revenue which would need to be generated in only a few months in order to pay a discretionary bonus and/or the Additional Revenue Bonus in the bonus years ending 30 September 2016 and 2017 respectively, there was no real and substantial chance of the claimant being awarded either a discretionary bonus or an Additional Revenue Bonus in either 2015/16 or 2016/17.
112. In any event under the Service Agreement, the Additional Revenue Bonus is payable only if the claimant is in employment on the due date for payment which, for the bonus period from 1 October 2016 to 30 September 2017 would have been in November 2017. Since the contract would have terminated on 30 September 2017 there can be no contractual claim for an Additional Revenue Bonus in respect of the bonus period ending 30 September 2017.

Mitigation

113. The burden is on the defendant to show that the claimant did not take reasonable steps to mitigate his loss. In the light of my findings above, I deal only with the period from 7 November 2015.
114. The claimant refers (paragraph 190 of his witness statement) to documents showing his mitigation "including communication with recruitment agencies and headhunters". He says (paragraph 191) that he has encountered difficulties as the current legal dispute with the defendant has meant that employers in the City are not going to employ anyone who is suing their previous employer. His field is a narrow one and he can only realistically go to one of two companies. This was confirmed by agencies and headhunters when he approached them. Further the lengthy period of garden leave has led to atrophy of his business skills. As a result he was not "marketable". At his level and seniority he says:

"client relationships and contacts are essential to secure alternative employment."

115. Counsel for the defendant submitted that there is not one document evidencing that the claimant did anything until February 2016, three months after his dismissal. Counsel submitted that the claimant was "unenthusiastic" about getting a job and the bursts of activity are infrequent and perfunctory at best. There is no evidence that the claimant got in touch with any contacts. The claimant should have found a job paying at least half the remuneration he now claims within three months of his employment terminating.
116. Counsel for the claimant submitted that there was no point in pursuing the headhunters more frequently because that was not a constructive way of finding a job. The claimant sought to make use of his contacts and it got him nowhere.
117. In cross examination the claimant said that he was pretty shocked when his contract was terminated and it took him a while

"to get my head round it"

He said he contacted some clients in late December 2015 and again in January 2016. However that was not mentioned in his witness statement nor is there any evidence of text messages or phone calls.

118. There is evidence that the claimant contacted head hunters in February 2016 again in March 2016 and then there is a gap until April 2017. The claimant's evidence was that it was quite humiliating to send CVs and be told that someone would get back to him and then they did not. He said that if someone makes it clear that they are not interested there are only so many times that you can keep getting humiliated.
119. He said that he did not try to get a job every day but would take some time in a morning or a day and and contact people. He said he was not confident that he would end up getting a job by one of the head hunters because in the City people tend to know each other and they get jobs via recommendations. He had been told clearly by a headhunter that so long as he was involved in litigation with an employer he would never be considered. He said he did try and make some money by trading futures but unfortunately that did not work.
120. The evidence of Mr Vogels in his witness statement was that in this industry there is usually no need to approach recruiters and it is "rare" that interdealer brokers would recruit in this way (Paragraph 111). He said that:

"Experienced and competent brokers generally get approached by competitors quickly."

121. Mr Vogels accepted that the litigation may have made the claimant "a less attractive recruit". Mr Vogels said:

"I also did not see any need to have mentioned this." (Paragraph 112)

122. Mr Vogels also accepted in cross examination that someone who has been out of the market for a long time is less attractive to competitors even if they are highly experienced and competent [Day 3/68/24].
123. I accept the evidence that the claimant's job prospects were likely to have been hindered by the litigation with the defendant. I do not accept the proposition that the claimant should not have disclosed the fact of this litigation to prospective employers. I also accept that given the industry, it was unlikely that the claimant would get a job through the head hunters or recruitment agencies and therefore it was not necessary in my view, for him to contact them more regularly.
124. There is no evidence to support the defendant's submission that the claimant should have found a job within three months on half the salary. On the evidence and for the reasons discussed above, I find that the defendant has not established that the claimant did not take reasonable steps to mitigate his loss.

Counterclaim

125. Clause 10.2 provided that :

"any such action taken on the part of the Company shall not constitute a breach of this Agreement or Part 1 of any kind whatsoever nor shall the Employee have any claim against the Company or any Group Company in respect of any such action; and"

126. Counsel for the claimant submitted that this provision does not amount to an anti-suit injunction as was the case in the authority of National Westminster Bank plc v Rabobank Nederland (No 3) [2008] 1 All ER (Comm) 266. The clause is not saying you must not go and sue somewhere else; according to the defendant it is trying to define that there cannot be a breach of the term and counsel for the claimant submitted that that does not make sense. Counsel for the claimant submitted that where there is a lawful act, the provision has the effect that the claimant cannot sue and nothing else.
127. It seems to me that clause 10.1 gives the right to the defendant to place the claimant on garden leave which in turn entitles the defendant not to allocate work to the claimant and to exclude him from the premises. It seems to me that the purpose of clause 10.2 viewed objectively is to prevent the employee claiming that the exercise of the rights under clause 10.1 are subject to any other provisions of the agreement which might be construed to limit the right to place the claimant on garden leave. I do not accept that the intention of the parties was to single out this particular provision and exclude any liability for breach by precluding the bringing of the claim. The authorities relied on by the defendant relate to the bringing of proceedings where the parties have agreed to bring proceedings in a particular forum, they are not authority to support the interpretation for which the defendant contends.
128. The counterclaim is therefore dismissed.

Judgment accordingly