Geys, a managing director in the London office of Société Générale (SG) was summarily dismissed in November 2007, in breach of the terms of his employment contract. SG did pay an amount into Geys's bank account in lieu of notice in December 2007, but was also obligated to make a 'compensation payment' on termination. If Geys was terminated on or after 31 December 2007, the compensation amount would reflect entitlements arising from 2006 and 2007; if before, it would be assessed at a much lower figure reflecting 2005 and 2006. Geys's solicitors wrote to SC in January 2008 saying that he had decided to affirm the repudiated contract; the bank exercised its contractual termination rights in reply.
The trial judge held that the bank had terminated the contract only once it communicated with Geys in January 2008. The Court of Appeal disagreed, saying that the termination had occurred when the payment in lieu of notice had been made in December 2007. SG argued that termination had occurred in November 2007 when it repudiated the contract. The UK Supreme Court was faced with the question whether repudiation of an employment contract automatically terminates it or whether the traditional contract rule would apply, which provides that a wrongful repudiation is effective only once accepted by the non-repudiating party: Geys v Société Générale London Branch, [2012] UKSC 63. The majority of the court (Lord Sumption dissenting, except on two specific points of contractual interpretation) held that the elective rather than the automatic view should apply, as with other kinds of contract; to say that repudiation has the immediate effect of terminating the contract would provide an incentive to wrongful repudiators. The majority concluded that Geys had not been terminated until SG exercised its rights in accordance with the contract in January 2008. The mere fact that it had made a payment into Geys's account in December 2007 was not sufficient notice of termination; it is not up to an employee to keep checking his or her bank account to see if he or she is still employed.
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