The City is nervously awaiting the outcome of a senior banker’s compensation claim against HSBC over allegations that he was sacked because he was openly gay.
It is believed to be the biggest case of its kind to have reached an industrial tribunal since December 2004 when sex discrimination rules became applicable to gays and lesbians.
The result, expected this week, will be a test of the rights of gay workers and for the reputation of HSBC, Britain and Europe’s largest bank.
Global head of equity trading, Peter Lewis was sacked by the banking giant in February 2005 for “gross personal misconduct”. The incident in question relates to an encounter between Mr Lewis and another male employee of the bank, which ultimately resulted in a complaint of “sexual harassment.”
The tribunal heard that HSBC sacked Mr Lewis after he was accused of masturbating in front of a male employee in the work gym shower.
In November, 2004, the former equity head of equity trading, says he was approached and harassed by a man who demanded to know his name at his work’s health club. He said: “As a gay man, I am aware that my sexuality can provoke hostile reactions from people, I just wanted him to go away. I therefore gave him a name which was not mine and which I made up on the spot.”
He chose not to report the confrontation, but five days later was summoned to a meeting where he was told a man had accused him of ogling and masturbating in front of him, “The implication was that I had been ‘coming on’ to someone in the changing rooms,” he said.
Mr Lewis told the tribunal his sexuality had provoked a “considerable amount of interest and comment” in the City, including abusive phone calls to his home and office. He claims some workers felt it was “inappropriate that someone occupying such a senior position should be gay.”
He said: “Others would make homophobic comments either directly to me or, more usually, behind my back to my manager or colleagues. The situation has improved but discrimination and homophobia in the financial services industry has not been eliminated.”
The banker told the tribunal that he made a DVD recording of his disciplinary appeal hearing because he had lost faith in his employer, he said “I felt I was being stitched up, I lost all trust and confidence in the appeal process.”
The tribunal heard from HSBC’s human resources manager, she insisted that Mr Lewis was not sacked because of his sexuality, HR manager Natalie Hattrell said the bank had followed “entirely correct procedures” when it dismissed Peter Lewis.
Mr Lewis’s lawyers later claimed an HSBC manager didn’t adequately probe the claims of gross misconduct. Mark Bucknall, HSBC’s co-head of global investment banking, was accused of being biased for not considering Mr Lewis’s side of the story before dismissing him.
Chris Quinn, Mr Lewis’s lawyer, cross examined Mr Bucknall and suggested he didn’t adequately investigate eight discrepancies in the complainant’s story or if he was homophobic, given his use of words such as “effeminate” and “nonce,” a slang term for a paedophile, when referring to homosexuals.
He said: “You don’t appear to have given Mr. Lewis the benefit of the doubt on a single issue.”
Mr Bucknall denied that the former banker’s sexuality came into his decision.
He told the tribunal that he believed the employee who brought the complaint, who can’t be named for legal reasons, gave a more “credible” version of events and that Mr Lewis’s assertion that HSBC discriminated against his sexual orientation from the start were “ridiculous,” given the damage his dismissal has caused to the lender’s bid to rebuild its equities business.
The hearing later heard from Charles Laughton-Scott, a senior HSBC executive, who said the dismissal was handled in a fair but not perfect way,
Mr Laughton-Scott had been in charge of the disciplinary hearing, he said: “We considered it had been a fair process. Was it perfect? No.”
He revealed he was inclined to uphold Mr Lewis’s appeal until he visited the gym where the incident is alleged to have taken place, and concluded that it would have been possible for the reported events to have taken place.
Mr Laughton Scott added that after interviewing the unnamed employee who made the complaint (Mr A), he felt he was straightforward, “I was not impressed that Mr A had called the claimant a ‘nonce’ as this suggested to me that Mr A was not a particularly pleasant person, but I did not think it indicated that he is homophobic.
“I also thought that Mr A did not know what this word meant anyway.”
Mr Lewis’s lawyer, Chris Quinn, asked if Mr Laughton Scott, deputy head of global banking, had favoured Mr A to his client as he was gay.
“Absolutely not,” Mr Laughton-Scott said.
Mr Lewis was believed to have earned around £1m a year. He is seeking £5 million compensation for being sacked because he was gay.
The bank denies his claims.