REPORT: Germany could make a major change to the law to attract bankers post-Brexit
The Financial Times reports that Germany is "looking at imposing an upper salary limit on employee protections of €100,000 (£90,279) or €150,000, which would make conditions such as redundancy terms less generous."
Essentially the new law, if passed, would mean high-earning workers - like bankers - would not be entitled to as strong job protections, making them both easier and cheaper to sack.
Essentially the new law, if passed, would mean high-earning workers - like bankers - would not be entitled to as strong job protections, making them both easier and cheaper to sack.
"Labour law wasn't designed for people like this," a source quoted by the FT said.
According to the report, which cites "two senior bankers," the potential change in the law has been a key pillar of pitches made in recent weeks by German business people promoting Frankfurt in the UK in recent weeks.
Employment law is thought to be a major sticking point for banks looking to move operations to the continent after Britain exits the EU, as the cost and time needed to fire employees is much higher than in the UK. For example, firing a banker making €1.5 million overall would reportedly cost around €150,000 for a bank operating in the UK, but would be almost the equivalent of their total pay in Germany.
By relaxing those laws, it is thought that Germany could attract more business from major international banks and financial institutions.Germany's finance ministry did not immediately respond to a request for comment from Business Insider.
Since the Brexit vote, Frankfurt has aggressively pitched itself as the best destination for any financial services firms looking to shift operations away from London in the coming years. For instance, in July, Hubertus Vaeth, the managing director of Frankfurt Main Finance - a group that promotes the German city as a financial centre - told reporters.
"We want to send the message loud and clear: 'Welcome to Frankfurt. How can we help you?'" Vaeth said, adding that "The welcome banner is hung and Frankfurt's doors are wide open."
The city is already home to the German stock exchange, the European Central Bank, Germany's central bank, the Bundesbank, and the headquarters of both Deutsche Bank and Commerzbank, the country's two biggest lenders, so the pitch to attract other big firms makes sense.
Although it is unclear how much financial services business will actually leave London following Brexit - it likely depends on whether Brexit is "hard" or "soft" - it is though that major banks could shift thousands of staff, especially if London loses its financial services passport. Around 5,500 firms registered in the UK rely on the European Union's passporting rights for the financial services sector, and they turn over about £9 billion in revenue.
Numerous banks have already publicly talked about their contingency plans for shifting staff after Brexit, with reports on Sunday that Goldman Sachs is preparing plans to move around 2,000 British jobs overseas if passporting rights are lost.