Edition 1496
13 October 2018
Edition: 1496

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Court orders Novo Banco to pay €700,000 extra to two ex-employees

by TPN/Lusa, in Business · 08-02-2018 14:07:00 · 0 Comments

Portuguese bank Novo Banco has been ordered to pay more than €700,000 to two former employees who were fired in 2016, when they were due to take early retirement, according to a Supreme Court ruling.

Court orders Novo Banco to pay €700,000 extra to two ex-employees

The cases concern two former directors of Banco Espírito Santo who were taken on by Novo Banco after the former institution was wound up by the Bank of Portugal in 2014, and who claim then to have signed early retirement agreements with Novo Banco.
The two employees later lost their jobs as part of a mass redundancy programme carried out by Novo Banco in the summer of 2016. As they did not agree with the terms of the deal, viewing the compensation as insufficient, they went to court to have the deal struck down.
According to the pair, the agreement initially made with Novo Banco was one under which they would retire early – implying much larger compensation.
Novo Banco, however, took the view that the 2015 agreements did not relate to early retirement, but to suspension of the employment contracts, with the result that the compensation offered – almost €66,000 in one case and €110,000 in the other – was correct.
The first court ruled in favour of the two complainants, and that the 2016 compensation should have reflected all salaries until retirement age. One BES director would therefore receive €540,556.25 and the other €186,989.58 on top of the €110,076.92 already paid in 2016.
Novo Banco appealed the decisions all the way up to the Supreme Court, which has now upheld the first ruling.
The 2016 redundancy plan saw at least 30 employees take Novo Banco to court, including many who were expecting to take early retirement. Another case in which they are questioning not only the amount of payoff but also the plan itself is still in the Lisbon court.
Since it was set up to take forward BES’s viable commercial banking business, Novo Banco has been undergoing constant restructuring, with the loss of more than 2,000 jobs.
A majority stake in the bank was in October sold to US venture capital fund Lone Star, while Portugal’s banking sector Resolution Fund retains the remaining 25 percent. A fresh restructuring plan is now being implemented, involving a further 500-plus job cuts.

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Edition 1496
13 October 2018
Edition: 1496

Read this week's issue online exactly as it appears in print.

Twitter

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