COMMERZBANK yesterday won the right to challenge the bonus awards of over 100 staff who were formerly at failed bank Dresdner Kleinwort.
The 104 investment bankers claim they are entitled to their full bonus – totalling €52m (£41.7m) – thanks to a verbal guarantee from senior managers in 2008.
But when Commerzbank took over Dresdner it too came under strain, cutting bonuses across the group by 90 per cent – including those of the Dresdner staff.
The 104 won their claim earlier this year, but the bonus has not yet been paid out and Commerzbank has successfully won the right to challenge the award.
“Commerzbank welcomes the decision of the Court of Appeal to consider our appeal. We view it as an encouraging sign that we will be able to defend our position,” Commerzbank said in a statement.
“It is the bank’s contention that as a matter of law, no binding contractual commitment was made, that bonus amounts communicated were provisional and that it was reasonable and responsible to reduce the bonuses in the light of the €6.5bn loss that Dresdner’s investment banking operation posted for 2008.”
The case is one of several around the world that contest a total of more than €400m, and could have wider implications for other banks.
“Irrespective of whether Commerzbank ultimately wins or loses, the clear message for City firms 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 paying the bonuses,” said Paul Quain from GQ Employment Law.