What are your options if you are asked to relocate to Europe to perform your job?
As the current domestic political impasse continues in respect of BREXIT, the terms under which the UK will leave the EU in March 2019 remain unclear. Financial services companies would be negligent if they did not consider the impact on their business under the various potential outcomes, including a no-deal BREXIT and make contingency plans accordingly. Amongst those plans are some involving proposals to relocate employees’ positions to financial centres in the EU, such as Frankfurt, Paris or Dublin.
Estimates of the number of jobs expected to be relocated to the EU after Brexit have fluctuated wildly. In January 2017 the London Stock Exchange warned that under a “hard Brexit”, 232,000 jobs (amongst all asset-classes) could move abroad, although not exclusively to the EU. The next month, the Brussels-based Bruegel research group claimed that 30,000 roles could do so. In June 2018, one third of financial services companies[1] have stated that they are considering, or have confirmed, that they will move operations or staff to the EU.
The breakdown of the individual banks’ plans is interesting. In a survey[2], HSBC said up to 1,000 jobs could move to Paris, Royal Bank of Scotland expects to move 150 to Amsterdam, Goldman Sachs plans to move 500 people to Europe, while JP Morgan has said that up to 4,000 jobs could move.
Although these are merely “plans”, that number is likely to rise as the prospects of a hard Brexit increase.
What are your rights and obligations if you are asked to relocate to Europe?
Your employment contract will normally contain a “mobility clause”. This specifies your normal place of work, and the geographic area to which your employer is entitled to permanently transfer you should they require to do so. If you are working in London, this will normally not extend beyond the M25. Accordingly, if your employer unilaterally instructs you to move to Europe, it will be in breach of the employment contract and you will be entitled to resign, and make a claim against it for breach of contract and constructive dismissal.
So much for the legalities.
- If you refuse to relocate
The reality is that if your employer requests that you move to Europe, and you refuse (for example, if relocation is practically impossible for family reasons), the employer will likely make you redundant on the grounds that your current position no longer exists in London. You may then be entitled to a redundancy payment, dependent on the length of your continuous employment with your employer.
Please be aware that you are likely to be bound by restrictive covenants after termination (even though you have been made redundant and the decision to leave the employer was not yours, these are still likely to be enforceable) which will prevent you from competing against your former employer for a defined period of time. Check your employment contract so that you are familiar with these, as their existence of may affect your attractiveness to a new employer.
- If you agree to relocation
Before you move you should confirm all the details of the move and subsequent work environment with your employer. Your bargaining position is normally at its strongest before you agree to move.
In respect of negotiations surrounding your move, your line manager will normally be your point-person regarding your day to day work functions, reporting lines, etc, while HR are likely to inform you of the contractual terms which your employer proposes will govern the relocation. If you are unhappy with the terms offered, it is open to you to attempt to negotiate more advantageous terms, such as a better relocation package and coverage of travel to the UK so many times per year, although the employer may resist those attempts. In essence, it is a commercial negotiation which will depend on, amongst other considerations, how much the employer values you, how easy it will be to employ a replacement in the new location, any associated costs of that, and the availability of positions for you in London.
You will normally be employed under the terms of a “local” (eg. French, German, or Irish) employment contract. The protections that this offers you will differ from those in your current contract, as the statutory frameworks in those countries differ from England and Wales. Before you accept the relocation offer, you should clarify with HR the legal and tax implications of your move.
Meaby & Co are lawyers experienced in the financial services field in respect of employment issues. Should you require advice on any aspect of employment law, including the above, please contact Chris Marshall or Steven Eckett on 0207 703 5034.
[1] Source: EY study of 222 large banks, insurers, asset managers and other financial services companies
[2] Reuters survey of 134 of the biggest or most internationally-focused banks, insurers, asset managers, private equity firms and exchanges to a survey conducted by between 1 August and 15 September 2018.
