That didn't take long. With most people in the City only back at work this week after the Christmas break, banks are already handing out new contracts asking staff to move to Europe because of Brexit. In some cases, recipients have only been given a few days to sign, or not.
Relevant London employees at BNP Paribas, Bank of America, Goldman Sachs and Morgan Stanley are understood to have been issued with new contracts asking them to move to Europe (predominantly Paris). Some Morgan Stanley employees were allegedly given a deadline of January 3 by which to sign the new contracts. Some Bank of America employees have allegedly been given a deadline of Friday this week.
Banks are typically tight-lipped about the specificities of their Brexit plans. Bank of America is expected to locate around 200 front office bankers in Paris, but didn't respond to a request to comment for this article. Insiders at BNP Paribas say the French bank is asking some London-based traders and most non-UK EU salespeople to move to Paris, but the French bank declined to comment.
Dan Begbie-Clench, a partner at London law firm Doyle Clayton, says he's been approached by numerous London bank employees who are unhappy with the new contracts they've been given. "I'm dealing with people who've been put under very tight deadlines," he says. "People are being offered new remuneration terms which are lower than their UK salaries, and some benefits - for example pensions - aren't being replicated."
Insiders at BNP Paribas appear particularly miffed by their new terms, with two bankers there complaining to us of being relocated to Paris on UK contracts which offer lower pay than that they're receiving in London. While some people at BNP are understood to have been offered a straight conversion from sterling to euros when they move, others are allegedly being issued euro-denominated salaries that are 20% lower than their sterling equivalent.
BNP has seemingly attempted to mitigate the reduction with generous relocation terms. The lower cost of living in Paris should also compensate for the salary fall, but recipients are not convinced. "We are being asked to accept less pay than we get currently and lower employment protection than other people in France," says one.
Begbie-Clench says his clients - who work at banks across the City - are also struggling with tax issues relating to relocation. "People have been very unhappy with the quality of the tax advice they've been receiving," he says. "In some cases, employees who move are going to incur very different and potentially much higher tax liabilities - particularly in situations where their partners might be remaining in the UK or transferring to a different country."
The issues surrounding relocation are "very complicated" says Begbie-Clench and banks' tight deadlines for signing the new contracts mean staff have insufficient time to get to grips with them. If contracts are not signed, the implication is that jobs will be put at risk.
Banks, however, have their own reasons for demanding that employees sign soon. "Time is running out and most banks just want to know who's moving or not, particularly in sales teams," says one headhunter, speaking off the record. "You will see a lot more of these deadlines over the next two to three weeks."
As other banks issue their terms, BNP Paribas' new contracts may yet be perceived as unusually generous. Headhunters say salaries in Paris are typically 30% (or more) lower than in London. Therefore, émigrés who move with a 20% pay cut will still be on more than counterparts who've always worked for the bank in Paris. This has the potential to store up trouble for the BNP as local staff complain of a two tier pay system. One French headhunter claims BNP is already hiking salaries for some established Parisian staff as a result.
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