Employment Law Cases

Dismissal for failure to disclose bankruptcy

Pubbi v Your-Move

An employee was fairly dismissed for failing to disclose his bankruptcy, despite the absence of an express contractual requirement or policy requiring him to do so.


Mr Pubbi was employed as a financial consultant/adviser by YM, an estate agency which also arranges mortgages and offers various insurance products. When he joined YM, Mr Pubbi had to fill in a financial services employment form which included a statement that financial consultants, mortgage advisors and general insurance consultants would be subject to regular checks, typically annually, to verify ongoing fitness and propriety as part of the company’s obligation in financial monitoring.

Another company, First Complete (FC), has a relationship with YM as an appointed representative, under which it sets terms for the work that it will permit YM’s advisors, working as its representative, to carry out. Following a lengthy period of unpaid absence through sickness which caused him financial difficulties, Mr Pubbi declared bankruptcy. He didn’t tell YM of his bankruptcy. When YM found about it, his authorisation with FC was terminated with immediate effect and as a result he could no longer hold himself out as an adviser. The termination of authorisation was because FC believed he was no longer ‘a fit and proper person’ and that his failure to disclose the bankruptcy breached FCA rules. YM dismissed Mr Pubbi for gross misconduct: failure to inform them of his bankruptcy which meant he was unable to carry out his adviser role. Mr Pubbi said that the FCA rules didn’t require him to disclose his bankruptcy. However his dismissal was upheld on appeal. He brought a tribunal claim for unfair dismissal.

The tribunal dismissed his claim. There was no express term of his contract, nor any policy or regulatory requirement that applied to him, that specifically required him to disclose a bankruptcy. However, the tribunal found that YM dismissed him because it nevertheless believed that, in all the circumstances, he knew, or should have appreciated, that it would regard his bankruptcy as a serious matter, and would have expected him to disclose it, and that he had deliberately not done so. Mr Pubbi appealed.

EAT decision

The appeal was dismissed.

Despite the fact that the FCA rules didn’t in fact require Mr Pubbi to disclose his bankruptcy, the EAT commented that the tribunal had found that YM didn’t attach much weight to this when deciding to dismiss. Added to this, the true position had in fact been taken onboard at Mr Pubbi’s appeal hearing.

Rather YM had focused on Mr Pubbi’s appreciation of the significance attached to fitness and propriety generally in the financial services advice environment. The tribunal had permissibly found that the dismissal was because Mr Pubbi had deliberately decided not to disclose his bankruptcy, despite an expectation that he would do so. The fact that there was no express contractual term requiring disclosure was not a decisive factor.

The issue for the tribunal was whether YM was reasonably entitled to take the view that Mr Pubbi ought to have appreciated that he would be expected to disclose something of this sort, notwithstanding that there was no express term requiring him to do so. The tribunal had properly concluded that he should have appreciated this, given his experience in the industry. YM was to view such conduct as warranting dismissal and the overall disciplinary and appeal process was fair.


In this case the employee was in an industry where great weight is placed on being a ‘fit and proper’ person as a financial adviser. Although this kind of situation is not going to come up frequently, for regulated businesses it will be helpful as even if there is no specific obligation to disclose specific matters, failure to disclose something so key such as an inability to manage your own finances when advising others on the same topic, can be taken seriously.