Riad & Riad Successfully Defends a Major Airline Company in a Dispute Against CFO
Riad & Riad scored a favourable court judgment for a leading airline company in a dispute against its chief financial officer (CFO).
The judgment was issued by the Egyptian Court of Cassation setting out a number of noteworthy principles regarding the seriousness of the violation which justifies disciplinary termination and the entitlement of End of Service (EOS) and other benefits.
The judgment established the following important principles:
Standard of care for a senior management position
- A CFO is sensitive position in the company, and it entails high level of accuracy, loyalty and fiduciary liability.
- A manipulation by the CFO of a company’s policy – by presenting incorrect personal data – constitutes a breach of trust regardless of the value of the financial benefit gained because of the violation. Therefore, terminating the CFO – as a result of such breach – was justified and hence the CFO is not entitled to compensation for unfair dismissal.
Who is entitled to receive EOS?
- Employees who were terminated due to breach of fiduciary duty shall not benefit from the Company’s EOS scheme which is meant to be a gratuity payment to loyal employees.
Rule of Ex Turpi Causa non Oritur Actio
The basic rule of Ex Turpi Causa non Oritur Actio still in force, no one can benefit from its own wrong. Pursuant to this principle, the court said that the CFO is not entitled to receive the balance of accrued annual leaves given that she was in charge of implementing and supervising the Company’s annual leave policy and therefore was able to manipulate the rules for her own benefit.