Commerzbank is to challenge a High Court ruling that it should pay bankers a share of €400 million in bonuses.
The legal claim was launched by 104 bankers from Dresdner Kleinwort Investment Bank (DKIB) after it was sold to Commerzbank in 2009.
According to the bankers, senior managers at DKIB announced a guaranteed bonus pool for staff of €400 million shortly before the sale of the bank. However, following the sale, Commerzbank announced it had suffered losses and paid out only 10% of the amount bankers had been provisionally awarded.
In May 2012, the High Court ruled in favour of the bankers. It judged that the statements made by the managers had created a contractual obligation.
Commerzbank has now been granted a hearing by the Court of Appeal against this decision. The decision could have a major impact on the banking industry with regards to what can be said to employees about bonuses.
Paul Quain, partner at GQ Employment Law, said: “This is a major case for all the banks, which will affect what bank bosses can say about bonuses in team meetings to motivate staff.
“Irrespective of whether Commerzbank ultimately wins or loses, the clear message for City businesses is that they need to be very careful saying one thing about bonuses in a team meeting, then changing their mind later when it comes to putting things in writing or actually paying the bonuses.”