London-based banks ‘could relocate to Paris or Frankfurt’
The Brexit vote in the UK referendum could result in some London-based banks being forced to relocate their workforces to Paris and Frankfurt, Jonathan Hill, the EU's financial services commissioner has told German business newspaper Handelsblatt.
- Rates on hold as chancellor tackles ‘shock’ of Brexit vote
- UK ‘scoping’ a dozen trade deals outside the EU
- UK ponders next move after Brexit vote and Cameron resignation
"A vote to leave would result in complex, prolonged negotiations with the EU over the terms of the UK's exit, with considerable uncertainty over the outcome," said S&P.Now that there has been a Brexit vote, there is also uncertainty over the status of expat employees. Mark Quinn, head of Mercer’s Talent business in the UK, said, “The immediate implications for companies and employees will depend on their circumstances. In the short term, companies should be analysing exposure they have to the UK and Europe in respect of their workforce’s organisational profiles and their reward plans."While we don’t know yet what restrictions will be imposed on, say, the free movement of people, it is evident that political, economic, legislative and market uncertainty is unlikely to clear any time soon. Strong employee communications will be critical for companies over the coming months.“It’s likely that restrictions will be placed on EU workers within the UK workforce so companies should review their workforce plans, particularly retail, leisure and services employers who employ a large number of EU citizens. New bi-lateral agreements may be required for those organisations off-shoring from the UK into the EU and we will also have to wait and see if non-UK multi-nationals will think it still appropriate to have their European headquarters remain in London. “UK companies will have to gear up for likely change in UK employment and labour market regulation and certain elements are likely to become more favourable to employers, although this may well create a more turbulent employee relations environment. The UK banking sector is likely to seek changes in banking regulation, particularly as it affects pay. We may see an end to the bonus caps and other EU-sponsored controls although the Financial Conduct Authority and Prudential Regulation Authority will want to ensure that the direction and spirit of the Financial Standards Board’s requirements continue to be fully met in the UK.“The restrictions and changes in the UK labour market for key skills at both executive and employee levels will impact on competitive pay levels in the UK and, of course, there may be an increase in costs for UK workers living and working within the EU, so companies will have to respond to that.”Jules Quinn, a partner at King & Spalding, said that companies in both the UK and EU employing expat staff should establish an 'employment audit' following the Brexit vote, to prepare for significant legislative changes.“Companies should be undertaking an employment audit of current staffing in the UK and the EU to plan for the new systems and reduce potential risks. Companies should be assessing which employees will potentially be required to apply for a work permit if there is a repeal of the current EU immigration rules," Ms Quinn said.“Businesses need to review their existing contracts to see what EU derived rights have been woven into them, such as holiday pay and working time in existing employment agreements and TUPE provisions in property management agreements. There are questions over what post termination restrictions and references to geographical limitation there will be as well as currency, market volatility and where to locate businesses.” Mark Mitchell, CEO of recruitment firm Meridian Business Support, added, "I expect we will experience a significant lack of investment in major industries as other countries won't want to trade with the UK. Brexit means we are isolating ourselves and we may not seem favourable to other countries.“The result makes us appear to be less friendly and tolerant and has turned many of our workforce into official immigrants than colleagues – this will have a detrimental effect on staffing.“Brexit will have a major impact on start-ups and businesses. The economic impact will be damaging as we have cut ourselves off from a valuable source of skilled labour and we may have cut ourselves off from the single market. It’s going to take a lot of time, money and effort in order to get new trade agreements up and off the ground.“But we have to respect the vote, and get on with it.”
Read analysis of what the vote to leave the EU may mean for for the global mobility industry in Brexit is a reality – a new era for global mobility? by Relocate Global's managing editor, Fiona Murchie.
For practical advice, news and comment on the impact of the UK leaving the EU and how to support your organisation and employees, see the following sections on our website:
Education & Schools
Directory of Suppliers
Keep informed by subscribing to our newsletters and publications
For editorial comment please email firstname.lastname@example.org
To advertise contact email@example.com
Buy Relocate Global’s Guide to International Education & Schools
©2017 Re:locate magazine, published by Profile Locations, Spray Hill, Hastings Road, Lamberhurst, Kent TN3 8JB. All rights reserved. This publication (or any part thereof) may not be reproduced in any form without the prior written permission of Profile Locations. Profile Locations accepts no liability for the accuracy of the contents or any opinions expressed herein.