The Supreme Court of British Columbia (SCBC) has ordered that a private banker who was terminated after just seven months on the job is entitled to five months of severance, but not a bonus.
The SCBC ruled that Rainer Kastens, a private banker who worked for Bank of Nova Scotia’s Scotia Private Client Group for approximately seven months, is entitled to five months of severance pay after his employment was terminated for poor performance, not amounting to cause.
According to the court’s decision released last week, the bank initially paid Kastens three months severance, but he sought six or seven months’ salary, plus benefits and an incentive bonus. The court partially agreed with Kastens, increasing the required notice period to five months, but denying the bonus.
The decision notes that, at the time of dismissal, Kastens was 50 years old, and had worked for the bank for just under seven months, servicing its high-net worth, prestigious clients. “I am satisfied on the evidence that the plaintiff was entitled to five months’ notice of termination of employment. Less than this would not adequately reflect the plaintiff’s age and character of employment; more than this would ignore the short length of service and ready availability of other viable employment, as illustrated by the plaintiff’s subsequent employment with Manulife that commenced two months after his dismissal from the defendants,” it says.
The other outstanding issue was whether he was entitled to the incentive bonus referred to in his letter of employment. The decision says that Kastens submitted that he should receive a bonus of 20% of his annual salary.
But the court ruled that he was not entitled to a bonus “because he did not meet the requirements for such set out in the terms of the Annual Incentive Plan”. In particular, it notes that, even given the notice period, he wouldn’t have been working for the bank on both the last day of the fiscal year (October 31, 2011) and the incentive award payment date (December 16, 2011) as required under the plan.
He also wouldn’t have received a sufficient performance rating to trigger a bonus, it notes, saying that “the plaintiff’s supervisor… was very clear in his affidavit that the plaintiff’s performance was not satisfactory.” The decision notes that while he was not employed long enough to receive a written performance review, his supervisor met with him for coaching sessions and spoke to him about his deficiencies.
It says he was also disciplined for discussing insurance products with a client in breach of the bank’s compliance policies, and that he “exceeded his lending authority contrary to instructions, attempted to process transactions without authority or proper authorization, and discussed client details with a non-banking employee.”
The decision indicates that Kastens “denied, or attempted to explain away, these various performance concerns”; nevertheless, it says he wouldn’t have received a high enough rating to trigger a bonus, and the court found no evidence that such a decision should be considered unreasonable or arbitrary. “The onus is on the plaintiff to show on a balance of probabilities that he would have met the criteria of eligibility in the AIP, and I find that he has failed to do so. Therefore the plaintiff is not entitled to an incentive bonus,” it ruled.
Ultimately, the court ruled that he is entitled to judgment for five months salary and medical premiums, less the severance pay he has already received, and the amount he has earned from other employment during the five month notice period, which amounts to just under $7,000.