Banking jobs may not be moving out of London yet, but all the indications are that they will do soon. Jamie Dimon said today that J.P. Morgan could be forced to, "move several hundred jobs," out of London on the day after Brexit happens. Sergio Ermotti said yesterday that UBS is thinking of moving banking jobs from London to Frankfurt, Madrid or Amsterdam after the break transpires: "As we speak, we are narrowing down really the options," he added.
What if you're asked to relocate? Must you go? Jane Mann, head of employment law at Fox Williams in London, says it depends partly upon your contract. “If your contract has a relocation clause which says the bank reserves the right to relocate you to any country in the EU, refusing to go would be a breach of contract,” she says. Conversely, if you don’t have a relocation clause in your contract and the bank moves your role overseas, your role in London might be made redundant.
Basically, you likely have little choice either way.
Assuming, then, that you have to leave London, you need to think hard about what you're getting into. If you can clarify the issues and the costs upfront, you'll be better placed to negotiate a transfer package that covers them.
For example, the new iteration of your job in Frankfurt may seem to pay well, but is this really the case? Social security costs in Germany are notoriously high. Before you agree to a move, Mann says you could try negotiating a, "contractual tax equalisation promise," which means you'll have the same net pay in your new location as in the old.
Secondly, will the bank help move your family? International schools in Frankfurt are hard to get into. Stefan Mueller at consulting firm DGWA Financial Engineering, says London banks have already been approaching top institutions like the European School RheinMain in Frankfurt and asking for 50 places for employees' children. Schools in Paris are also being inundated with inquiries. Maybe you'll need to leave your family in London? Mann suggests attempting to negotiate a relocation package that covers the cost of moving.
Most importantly though, what happens if you obediently move to Frankfurt or Paris and are laid off three years later? After all, Frankfurt has been proposing to weaken its labour protection policies for anyone earning €100k+, and Paris wants to make it easier for banks to dump people without paying bonuses. Before you sign a contract for a new role in Europe, lawyers advises that you check what kind of protection is on offer if you're dismissed. “You should look at what happens to your bonus and pension if you’re dismissed,” says Mann. “Some expat contracts will entitle you to reimbursement of relocation expenses.” She adds. “Banks will be thinking about all of this and as an employee the really important thing is to get it all written down before you go. There are a lot of disputes over fuzzy expat contracts.”
Crucially, if you're not a British citizen and you're obliged to leave London and work in Paris or Dublin or Frankfurt, will you ever be able to come back to London again? And what about your family?
Needless to say, nothing is clear right now. However, based on the current rules Jonathan Goldsworthy, an associate on the immigration team at solicitors Bird & Bird, says the implications of leaving London (when you actually want to stay and to come back one day) vary according to whether you're an EU national or not.
If you're French or German or Irish and you've been 'exercising your treaty rights' in the UK for five years, Goldsworthy says you can currently qualify for permanent residency. After another year, you may be eligible to apply for citizenship. Goldsworthy says the most recent proposals suggest that the key principles of this regime will be continued post-Brexit. EU nationals would need to re-apply for "settled status", but this will also be granted after five years. By leaving the UK for Frankfurt after just two years, you might therefore jeopardize your ability to become, "settled." What if you leave your family behind and work in the EU while they settle? This will depend upon whether they would qualify in their own right under the new rules (e.g. They may need their own income if you're earning overseas). "You would need to consider the case carefully and further clarity from the Home Office is required," Goldsworthy admits.
If you're an American living in London and you leave with your family to work in Frankfurt, the implications may be even more dire. While you can currently get indefinite leave to remain after five years, this lapses if you subsequently spend more than two years continuously overseas. In this case, returning to the UK would mean you'd lost your indefinite leave to remain. "You'd need to requalify again under the rules in place at that time," suggests Goldsworthy.