August 08 2012
The Supreme Court recently dismissed an appeal in relation to a disputed employment agreement in Stephanos Patsallidis v Ethniki Bank of Greece (Cyprus) Ltd.
On October 1 1994 the respondents appointed the appellant as a temporary accountant for a period of one year. However, the appellant remained in his position until December 12 2004, when his employment was terminated due to lack of integrity.
On November 31 2004 the appellant had withdrawn £500 without authorisation, as he needed it for personal use. The incident was discovered after an inspection carried out by the bank. During the inspection it was also discovered that a similar incident had occurred on November 12 2004. However, this action had led to no repercussions for the appellant.
The respondents called the appellant to attend a disciplinary hearing before the bank's disciplinary committee. The appellant, who was represented by a lawyer, admitted that he was guilty of a disciplinary offence and asked for leniency from the respondents. The president of the bank's employee representatives group, ETYK, was also present at the disciplinary hearing, but he did not dispute the validity of the procedure.
Following the hearing, and his subsequent termination, the appellant filed a suit before the Nicosia District Court against the respondents, claiming damages of £606,806 for illegal termination of his employment contract. This sum reflected the appellant's theoretical loss of wages from January 1 2005 until December 31 2029, when he would legally have retired. He also claimed £159,000 for loss of benefits and/or retirement allowance. He requested:
In his appeal before the Supreme Court, the appellant asserted that the first instance court had wrongfully decided that his employment was for an indefinite period, which consequently deemed it impossible for damages to be awarded or for an order for re-appointment to be made.
In delivering its judgment, the Supreme Court disagreed with the appellant, stating that there was no express or implied arrangement for permanent employment until a predetermined age. The court argued that the provision for mandatory retirement at a predetermined age does not imply an obligatory commitment of employment for a predetermined period on behalf of the employer. Moreover, the court stressed the importance of strictly adhering to the disciplinary procedures and concluded that, in this case, the respondents had followed a reasonable disciplinary procedure with respect to the principles of natural justice. The court also upheld the first instance court's findings in relation to the immediate termination of the appellant's employment.
The appeal was rejected with costs in favour of the respondents.
In light of this decision, employers should ensure that they have proper contracts in place in order to avoid uncertainty and that they always implement proper disciplinary procedures in accordance with the principles of natural justice.
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