Bank’s chief risk officer dismissed after whistleblowing

A chief risk officer at the UK arm of a Pakistani bank was unfairly dismissed after whistleblowing, an employment tribunal has found.

Mr Daniels had been in charge of assessing and mitigating regulatory, competitive and technological threats to United National Bank in the UK. His role was a regulated position with individual accountability under the senior managers and certification regime, and his appointment had to be approved by the Prudential Regulation Authority (PRA).

Prior to his appointment, the bank had been issued with a ‘section 166’ remediation plan with 116 issues that needed resolving to avoid further intervention by the regulator. When Daniels joined the firm in July 2019, his role involved fixing these issues.

Between July 2019 and his dismissal in April 2021, Daniels made numerous protected disclosures about regulatory and compliance issues at the bank. These included concerns about a potential conflict of interest that breached the senior management regime’s conduct rules; breaches of procedures relating to risk control; the bank allowing employees to bypass controls; bypassing key committee reviews; and not following the correct process in respect of new product approvals.

Daniels also complained that there were insufficient resources to allow him to complete his role, stating that the operations in place were not sustainable.

At the tribunal, United National Bank argued that the PRA rules should be treated as guidance, rather than legal rules. However, this was dismissed.

In February 2021, with the section 166 process coming to an end, it was decided that Daniels was not the right fit for the bank, and it was noted that he was reluctant to do things the board wanted him to do. This was despite the claimant receiving an ‘A’ grade in his appraisal a month earlier.

Daniels was told in March about the decision to dismiss him and he left the company on 1 April 2021.

In its judgment published last month, the London employment tribunal concluded that the claimant’s escalating protected disclosures were the true cause of the decision to dismiss him.

Usually claimants need to have been in employment for at least two years before they can bring an unfair dismissal claim. With the section 166 process coming to an end, the tribunal found that there was a significant likelihood that the company would have dismissed him anyway.

However, the tribunal’s judgment notes: “Such dismissals will inevitably be somewhat disruptive and costly, in recruitment, legal and settlement expenditure. The good appraisal was a strong indication that, absent his protected disclosures, the claimant would have remained in employment.”

Compensation will be discussed at a hearing in May.

Daniels’ solicitor, Clive Howard, a partner at Keystone Law, said: “This is a significant judgment for whistleblowers in financial services. In an important clarification, the tribunal recognised that internal rules did amount to legal obligations, which is positive news for whistleblowers in the financial sector.”

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United National Bank has been contacted for comment.

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