The price of Non-compliance – Tribunal tells Jersey director their dismissal was fair and lawful

"Mrs JUSTINE WILKINSON" a director Fairway Trust Limited was dismissed for gross misconduct following a disciplinary hearing.  A subsequent internal appeal upheld that decision. And following a hearing which took place over four days before the Jersey Employment & Discrimination Tribunal, the Tribunal found for FAIRWAY TRUST LIMITED [the Respondent]. It held that Mrs WILKINSON [the Claimant's] dismissal was both fair and lawful.

In reaching its decision, the Tribunal had particular regard to the potential regulatory risks which arose as a result of the Claimant's conduct:

1. "The procedures are in place in regulated entities for a crucial purpose, namely to recognize and manage situations in which, with the best will in the world, the entity and therefore the Island, risk becoming vulnerable to money laundering, terrorist financing and corruption.
2. Non-compliance is highly dangerous and a regulatory default."

KEY FACTS

3. Mrs Wilkinson was a senior financial service professional and a Respondent director, a regulated financial services business.
4. Mrs Wilkinson alleged unfair dismissal and wrongful dismissal – whilst she accepted that there had been misconduct, she considered the sanction was disproportionate.
5. During the Mrs Wilkinson employment, a friendship developed between her and one of the company's clients. She and her team provided professional services (via a corporate structure with which the client was associated).
6. Mrs Wilkinson received gifts and hospitality from the relevant client.
7. Once the friendship became known to the Respondent, an investigation commenced.

BACKGROUND

1. During her employment, a friendship developed between Mrs. Wilkinson and one of the company's male clients ("the client") for whom she and her team provided professional services.
2. The friendship included weekends away together and, notably, a birthday present from the client to Mrs. Wilkinson of a carbon frame bicycle worth some £1,200.

CONFLICT OF INTEREST IN BREACH OF POLICIES

1. a position of conflict arose between Mrs. Wilkinson's personal life and her employer's needs.
2. 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.
3. Full disciplinary proceedings took place, including an appeal, and were adequately minuted.

COMMENT

1. The case was complicated, involving many witnesses.
2. The Respondent's status as a regulated financial services entity and that of the Claimant as a director and principal person of the Respondent was highly relevant.
3. The risk posed as a result of misconduct by senior financial services professionals is higher.
4. Accordingly, the standards of behaviour expected of them are also higher – reflected in the requirement for principal persons to be fit and proper and conduct themselves with integrity.

KEY MESSAGE

1. In reaching its decision, the Tribunal had particular regard to the potential regulatory risks which arose as a result of the Claimant's conduct:
   • "The procedures are in place in regulated entities for a crucial purpose, namely to recognize and manage situations in which, with the best will in the world, the entity and therefore the Island, risk becoming vulnerable to money laundering, terrorist financing and corruption. Non-compliance is highly dangerous and a regulatory default."

CASE LINKS

• Wilkinson v Fairway Trust Limited [2020] TRE 091
• https://www.jerseylaw.je/judgments/tribunal/Pages/[2020]TRE091.aspx