Employment Law for Financial Services and Insurance Sectors

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Employment law for financial services and insurance sectors

Over the years, I have dealt with many city employees who have employment law issues. Whilst general UK employment law applies equally to a city broker or trader as it does to a shop worker, there are definite differences in the issues that arise.

City employees are highly paid but the demands of the role are very intense and in many situations, city banks, insurance companies and other large institutions have a hire and fire culture. Their approach is based on the fact that employment law, like English law generally, is fundamentally loss rather than compensation based. The average unfair dismissal award is less than £10,000.00 based on average salaries and the fact that most employees will secure suitable alternative employment within 3-6 months even after being unfairly dismissed.

Based on all of the above, the large banks and institutions commonly choose to ignore employment law process and simply dismisses employees on the spot – it is far from unusual, with no warning, for a city worker to be told to “clear your desk” and literally be escorted off the premises, in clear breach of employment law.

Typically, what happens in the above situations, is the employee is offered a compensatory amount of money which is higher than he or she would obtain by making a Tribunal claim. Settlement agreements, previously known as compromise agreements, are the common way in which employer and employee agree to mutually terminate the employment, regardless of the way in which the employer has handled the situation.

Employment settlement agreements

If you are a financial services, bank or insurance worker based in or around the City of London, Holborn or Canary Wharf and have been offered an employment settlement agreement, you will need independent legal advice, which is a prerequisite for a settlement agreement to be legally compliant and binding. Your employer will typically contribute towards your legal fees for independent advice and the amount offered for advice may cover your full costs in most situations (except where there are protracted or complex ongoing negotiations).

Whilst settlement agreements are largely standard in content, in order to comply with statutory requirements, the financial entitlements are quite different for employees who work in the City. Many such employees are paid more in terms of bonuses or commissions than other employees and many will also have share options and pensions which need to be taken into account when assessing an acceptable termination payment package and negotiating accordingly. References are also a vital area. In short, advising on employment termination agreements for city employees can be quite different so it is worth instructing not only a local employment law  solicitor but one who is an experienced negotiator with specific experience of these types of settlement agreements. I would be happy to assist.

Wrongful dismissal

In the event you have been dismissed, I can also advise on unfair dismissal or wrongful dismissal claims. Senior employees and those on higher levels of remuneration will often need to claim for wrongful dismissal bearing in mind the fairly low cap on recoverability for unfair dismissal. As wrongful dismissal claims are made outside of the Employment Tribunal, there are different costs and tactical implications, so again, an experienced commercial, as well as employment law litigator is generally a good choice.

Restrictive employment covenants

Another common area where City of London employers and employees require employment law advice relates to post-employment restrictive covenants and non-compete clauses. Given that high level and high-value business often depends on personal contacts and relationships, competitors  are often looking to poach important staff on the basis that a valuable employee so induced will bring contacts, business and possibly other staff with him or her. From the employer perspective, ensuring that you have the right clauses, which are likely to be upheld by a court (not all are) is vital, as is acting fast if your business is threatened by staff leaving and trying to take business with them, in breach of restrictive covenants or not. In such situations, it is often important to consider and possibly apply for an interim injunction to prevent your business being damaged.

From the employee perspective, you may need advice on your rights to leave employment and possibly to use your existing business contacts. I can assist by advising on whether clauses in your employment contract are possibly unenforceable and also ways in which you may be able to protect yourself against claims by a former employer.

 

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