The Supreme Court today delivered its Judgment in the claim of Raphael Geys against his former employer, Societe Generale. The Judgment is a complete victory for Mr Geys.

Key points from the Judgment are as follows:

  • Soc Gen’s attempt to terminate Mr Geys’ contract with immediate effect and without cause in November 2007 did not bring his contract to an end. The Supreme Court has confirmed that where an employer purports to summarily terminate an employee in repudiatory breach of contract, the contract does not come to an end unless and until the employee decides to accept the repudiation. This means that an employer cannot, in breach of contract, terminate an employee on a date which suits the employer, for example just before the employee becomes entitled to a bonus payment or salary rise. The Court has made clear that the law should protect the innocent party and not reward the wrongful repudiator.
  • Soc Gen were not entitled to terminate Mr Geys’ contract by simply paying his notice pay into his bank account. They had also to notify him in clear and unambiguous terms that they were exercising the PILON (payment in lieu of notice) clause in his contract. As they did not do this until January 2008, almost 3 weeks after the payment was made in December 2007, his contract terminated in 2008 rather than 2007, thereby entitling Mr Geys to enhanced termination payments worth approximately 2 million Euros. As the Court commented, Soc Gen “could easily have done things properly” but they failed to do so and must accept the consequences.
  • This means that employees are not required to check their bank accounts regularly to see whether they have been dismissed, or to guess at what an unexpected payment into their account may relate to. It also avoids the potentially very serious consequences of employees being without health and life insurance because, unbeknown to them, their contracts have been terminated by their employer exercising a PILON clause (which are commonplace in employment contracts).
  • Mr Geys is entitled to pursue further claims against Soc Gen for breaches of his contract which he says occurred before it was terminated. Soc Gen had argued that Mr Geys was required to waive those claims as a condition of his receiving the termination payments. However, the Court rejected that argument as it would allow Soc Gen to profit from their own wrongdoing. Mr Geys is therefore entitled both to the termination payments and to pursue his further claims.
  • The overall effect of the Supreme Court’s Judgment in financial terms is that Mr Geys is entitled to a termination payment of approximately 12.5 million Euros and is able to now pursue further claims against Soc Gen amounting to several million Euros.

Commenting on the Judgment, Tom Custance, partner at Fox Williams LLP representing Mr Geys said: “This successful outcome for Mr Geys vindicates his decision to take his case to the UK’s highest Court. The Judgment has established several key points of employment law which protect the rights of the innocent party. It should be widely welcomed”.



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