Damages in bullying case to be reconsidered
Cantor Fitzgerald International v Horkulak, Court of Appeal, 14 October 2004
In July 2003, the High Court upheld Horkulak’s claim that the chief executive officer’s frequent use of foul and abusive language towards him constituted a breach of the implied duty of trust and confidence.
Horkulak was awarded 912,000 damages – a sum that Cantor Fitzgerald appealed. It argued that the judge had misconstrued the contractual bonus clause which was wholly discretionary, or had applied the wrong measure of damages by adopting an approach unduly favourable to Horkulak.
Cantor Fitzgerald was successful in part. The judge had been correct to hold that Horkulak had been entitled to the discretion relating to the bonus being exercised on a rational and bona fide basis.
The bonus clause was clearly a contractual benefit in an environment of high earners where bonus payments were part of the remuneration structure. In assessing the bonus, the judge had been correct to take account of the range of salary and bonuses paid to comparable employees and Horkulak’s own expectations.
While the judge had correctly assessed what Horkulak would probably have received had he remained in employment, insufficient detail had been given for arriving at the figure for the bonus payment. Accordingly, 630,000 of the award went back for re-determination. Damages were reduced by 116,667 (representing the loss of two months’ basic salary) because of Horkulak’s failure to mitigate his loss during this period, and by a further 75,000 for Horkulak’s earnings from his new employer, for which the judge had failed to give credit.