HSBC 'sacked £1m banker for being gay'

London's Square Mile has always thrived on its reputation for adrenaline-fuelled macho banter as traders sweated over the next deal. If you didn't like it, too bad.

London's Square Mile has always thrived on its reputation for adrenaline-fuelled macho banter as traders sweated over the next deal. If you didn't like it, too bad.

But news that a City banker is suing one of the largest and most respected banks in the world for £5m, claiming that he was sacked because he was gay, could signal the beginning of the end of such behaviour.

Peter Lewis, 43, who earned £1m a year as head of equities at HSBC, was fired after seven months in the job for alleged gross personal misconduct. An employment tribunal will hear claims about an encounter with a male worker at the firm's headquarters in London's Canary Wharf.

Mr Lewis's lawyer, Alison Downie of Bindman and Partners, insists her client lost his job "because HSBC discriminated against him because of his sexual orientation".

She added: "My client's claim will be vigorously pursued and he is confident of success."

HSBC said Mr Lewis had only been dismissed after a lengthy disciplinary hearing and the bank was confident it could fight and win the case.

One source said: "If he was straight he would have been dismissed for sexual harassment."

HSBC, which employs 250,000 people world-wide is expected to defend its position by claiming that several senior staff known to Mr Lewis are openly gay and happily employed. It says Mr Lewis's actions put valued members of staff in "uncomfortable" positions.

Sexual discrimination rules, which came into force in December, extended the scope of the law to cover gays and lesbians. Tribunals can now order companies that discriminate to pay unlimited compensation.

Sid Saeed became the first City worker to test the law in February when he filed a legal claim against Deutsche Bank alleging the extreme homophobia he endured led to a breakdown. The analyst claims to have endured taunts such as "pillow-biter" and "shit-stabber". The bank is contesting the claims.

The only completed case came in January when the waste management firm Cleanaway paid out £35,000 to a manager who was ridiculed as "Sebastian" after a gay character in Little Britain.

The City's trading rooms of late have seen many changes. The all-male, white machismo is being challenged by legislation, a gradual influx of women and the corporate culture of overseas owners, particularly those from the US.

Some of the biggest financial houses have set up staff associations for gay and lesbian employees. Citigroup was recently identified by the pressure group Stonewall as one of the top 10 places for gay people to work. In 2002 the company was among the first to offer full benefit rights to same-sex partners.

The Swiss bank UBS sponsored last year's Mayor of London's pride reception. It offers a network for gay staff called Gay@UBS.

JP Morgan also runs JP Morgan Pride, while the management consultant McKinsey has Glam, "gays and lesbians at McKinsey".

But there is still some way to go, said Alan Wardle of Stonewall. While the boardroom might promote policies that fostered inclusion and promoted the company as a good corporate citizen, it was often a different story for employees. "The problem comes in middle-management positions, where a void opens up between policy and the practice and reality of the organisation."

Stonewall has worked with a number of the big financial institutions, including HSBC and Deutsche Bank, but there are concerns that the smaller firms remain indifferent.

"It is not about stifling money-making," Mr Wardle said. "It is about having a work environment where people are not forced to endure offensive comments dressed up as jokes. That culture is no longer tenable."