In the case of JP Morgan Securities plc v Ktorza, Mr Ktorza was an executive director on the foreign exchange desk of the bank. During the course of his employment he was issued with two final written warnings, one of which had expired by the time of his dismissal. The live warning was for late booking of trades and running risk by tightening prices without reference to a trader.
Until mid-2014, Mr Ktorza and his colleagues had engaged in the practice of short-filling or partial-filling with the knowledge of the bank. Partial or short-filling is when a client order is only filled in part because it was more profitable for the bank. However, from mid-2014 onwards sales people, including Mr Ktorza, were no longer allowed to continue with this practice, although traders could. Mr Ktorza attended a training session which referred to this but no paperwork confirming this was provided. Mr Ktorza subsequently instructed a trader, Mr Mui, to short-fill an order.
Mr Ktorza was suspended and a disciplinary hearing took place 6 months later. The procedure was somewhat unsatisfactory but during the course of it Mr Ktorza's manager accepted he was genuinely unaware of the change in policy regarding short and partial-filling. Mr O'Grady, who took the decision to dismiss, was of the view that Mr Ktorza should have known that he should not be short-filling, and he ought to have known that a degree of risk was involved. His final written warning was considered and Mr Ktorza was dismissed. Mr Ktorza's appeal was unsuccessful.
When his claim for unfair dismissal was heard, the Employment Judge was of the view that for someone to be fairly dismissed for conduct, the conduct has to have been in some way culpable (negligent, dishonest or similar). Given the employer's admission that Mr Ktorza was unaware of the change in policy, that was not the case here and his dismissal was found to be unfair.
When the matter was appealed to the EAT they were critical of the Employment Judge's view. The EAT made clear that it is not necessary for an employer to establish that conduct was culpable for a conduct dismissal to be fair. The Tribunal should have simply asked did the employer act reasonably in treating the reason as sufficient for dismissal. The EAT upheld the appeal but did not make any findings as to whether the dismissal was fair or otherwise, instead remitting the case back to a different tribunal.