Banker launches 'gay sex in the City' lawsuit over office pass at colleague

Tribunal test case will lay bare the macho, homophobic culture of high finance

City traders are braced for shocking revelations in a ground-breaking test case that will portray the world of high-finance as a environment rife with homophobia.

In a £5m compensation claim, a former employee of the global banking giant HSBC will tell the first tribunal of its kind tomorrow that he was sacked simply for being gay. Peter Lewis, 43, the bank's global head of equities trading, was fired in February 2005 after allegations of "gross personal misconduct". His lawyer, Alison Downie of solicitors Bindman and Partners, said he "would not have been dismissed but for his sexual orientation".

The case will be the first City claim brought to tribunal under new legislation that extends sexual discrimination rules to cover gays and lesbians.

A spokesman for HSBC said the bank "utterly rejects" Mr Lewis's allegations, but gay activists say the 10-day hearings are likely to cast new light on the casual homophobia that is deeply rooted in corporate life. The activist Peter Tatchell says gay employees and women are still not accepted or respected by the "macho culture" of the financial world. "Business and sport are two of the last bastions of homophobia." He says many prominent business people who are gay cannot come out, and that speaks volumes about the ongoing prejudice that blights the corporate world.

Alan Wardle, of the gay campaigning group Stonewall, says: "A lot of City institutions will be watching nervously because of the size of the damages claim," he says. "Organisations realise they're open to discrimination claims if they don't get their houses in order."

But the tribunal will hear HSBC say Mr Lewis was sacked because he sexually harassed another male employee. Pierre Goad, an HSBC spokesman, said Mr Lewis was dismissed only after a lengthy investigation and disciplinary hearing. "[He] was treated in the same way as any employee facing a complaint of sexual harassment by another member of staff," he says. "We believe in doing what is right and not what is expedient, and our sexual harassment policy applies to all staff."

In February 2005, a former Deutsche Bank executive became the first City employee to test the new legislation when he filed a claim against his erstwhile employer. That case was settled before reaching a tribunal. Sid Saeed had claimed he was pushed to the brink of suicide by racial and homophobic abuse from his managers and colleagues. He said he was passed over for promotion and taunted by co-workers as a "queer boy" and "pillow-biter".

Several banks have set up outreach groups for gay employees and introduced equal benefits for same-sex partners. But Arun, a gay employee at a major financial institution in London, says: "There's still a macho culture. Sexism is very prominent in the City; the language they use about women is disgusting. I have gay friends at Standard Bank, Deutsche Bank and JP Morgan, and they all pretend to be straight. Everyone is in the closet."

Many banks have introduced rules to promote diversity and stop harassment, but they are not always enforced, Arun says. "Those policies don't apply to the old boy network and the big players. There are several traders who are openly sexist, racist and homophobic. They just get a slap on the wrist because they're earning the bank €20m a year."

THE LAWSUITS

JANUARY 2006

The financial world's biggest discrimination lawsuit was launched when six female employees of Dresdner Kleinwort Wasserstein filed a $1.4bn (£793m) action, claiming they were denied top jobs at the bank's London and New York offices, were paid less and had to work in a hostile environment. Claire Bright, a London-based asset manager, filed £11m claim against HBOS.

FEBRARY 2005

Sid Saeed filed claim against Deutsche Bank alleging homophobia and racist abuse. Settled out of court.

JUNE 2004

Stephanie Villalba, a former senior executive at Merrill Lynch, claimed £7.5m for sex discrimination. Claim dismissed, but Ms Villalba has won leave to appeal.