CIBC logo on a branch of the Canadian Imperial Bank of Commerce on McCowan Road in Toronto Copyright (c) 2021 sockagphoto/Shutterstock.

CIBC logo on a branch of the Canadian Imperial Bank of Commerce on McCowan Road in Toronto Copyright (c) 2021 sockagphoto/Shutterstock.

The Canadian Imperial Bank of Commerce was in the UK courts last week over alleged sex and race discrimination in the context of the relocation of a senior staff member from London to Luxembourg. According to statements published by Her Majesty’s Courts and Tribunals Service, the bank is also accused of misrepresenting its position to the Luxembourg financial regulator, the CSSF.

The allegations take place against the backdrop of multiple financial-services relocations to Luxembourg in the past six years, something that places firms at risk of employment-law suits, notes Luxembourg-based employment lawyer Cedric Schirrir.

“Relocation can put employees in a very vulnerable position,” he says.

The regulatory challenges of relocating a financial services firm also require close attention, he added.

The case against CIBC centres on the proposed relocation of the bank’s then staff member, Zhuofang Wei, to the bank’s post-Brexit office in Luxembourg for the dual position of chief operating officer and chief risk officer. Despite Wei’s dismissal from CIBC on 20 March 2020, the Toronto-headquartered bank failed to deregister Wei from the CSSF until 31 March 2020.

“This left [Wei] exposed to additional risks and liabilities and constitutes a misrepresentation to the Luxembourg regulator,” according to the London Central Employment Tribunal Particulars of Claim document.

Additionally, CIBC staff revealed in their own witness statements that the proposed CEO of the Luxembourg office, Thomas Pellequer, was intended to retain his position in the Capital Markets team in the UK as well as being CEO of the Luxembourg office--something Wei claims was also in breach of regulatory requirements. “As part of his Luxembourg CEO registration process with the CSSF, [Pellequer] would have had to sign the same attestation that I signed when I was registered as the COO and CRO. This attestation stated that we must devote 100% of our working time to the role in Luxembourg,” Wei’s second witness statement reads.

Sex and race discrimination

The alleged regulatory breaches come as part of an employment tribunal case brought by Wei against the CIBC over ‘direct discrimination related to sex and/or race, nationality, ethnic or national origins, harassment and/or victimisation.’

According to the claim, Wei, of mainland China origin, was not afforded the same salary negotiation options as her Caucasian male colleagues over the move to Luxembourg, despite the considerable increase in responsibilities from her existing position as executive director in front office controls.

“Other employees of [CIBC] who were transferring to Luxembourg were offered their positions formally between November 2019 and January 2020.  The [CIBC] did not make [Wei] an offer setting out the terms of her Luxembourg move until 16 January 2020, far later in the process than any of the other employees taking up employment in Luxembourg. [Wei] was not allowed to negotiate her financial terms whereas the other employees of the [CIBC] who were being transferred to Luxembourg were given the chance to negotiate their financial terms,” the Particulars of Claim document reads.

When Wei informed the CIBC in January 2020 that she was interested in the Luxembourg role, but the salary did not work for her, the Luxembourg offer was withdrawn, and she was simultaneously made redundant from her London-based position.

Wei claims CIBC treated her less favourably than Pellequer, because of her sex and ethnic origin, and that the decision to make her redundant was a further act of discriminatory treatment.

The court documents also claim that Wei was subjected to unwanted harassment based on her sex and race, including being asked CIBC’s managing director and head of Europe & Asia Pacific at the time, Wayne Lee, to babysit his daughter.

Lee says in his own witness statement “I do not recall, at any stage…asking Ms Wei if she would babysit my daughter.”

HR director Cheryl Ford says in her witness statement “As an organisation, CIBC takes issues of equality and diversity extremely seriously.”

Relocation trend

The challenges of relocating staff often raises issues until then lain dormant, according to employment lawyer Schirrer.

“There are two issues in terms of relocation,” he said. “Immigration issues of course, but then the employee being relocated is in a vulnerable position. If this person faces dismissal following relocation then they have abandoned everything at home only to find themselves in a new country without help, assistance or family. They are often only compensated by one to two months’ salary. This is often not taken into account by courts.”

Following the results of the 2016 EU referendum in the UK, 95 UK firms chose Luxembourg as their post-Brexit EU hub, representing just under 20% of all moves, according to London-based thinktank New Financial. This, however, has slowed down in recent years.

CIBC first made plans to create a Luxembourg office following the EU-referendum results in 2016, according to the court documents.

The tribunal again CIBC took place in the UK between 11 and 20 May 2022. The verdict is expected in the coming weeks.

Neither the CIBC nor the CSSF responded to requests for comment.