German bank risk-takers to lose legal protections

Germany relaxes labour laws to make it easier to fire risk-taking bankers and make it easier to recruit non-EU staff including Britain's in preparation for Brexit.

Chessboard with money
Stringent labour laws in Germany are to be relaxed to make it easier for international banks to fire top earners, according to a Bloomberg report on Thursday.

Law changes make it easier to fire top earners

The move, due to be approved this week by the lower house of parliament, represents part of the strategy devised by Chancellor Angela Merkel’s government to lure financial institutions unsettled by Brexit to Frankfurt."The legal change is part of wider legislation designed to shield the finance industry from repercussions stemming from the UK’s departure from the European Union," said Bloomberg."The law loosens job protections for a bank’s so-called risk-takers who earn around 220,000 euros ($249,000) or more a year. The government argues the measure is needed to 'strengthen the stability' of Germany’s finance sector and minimise the risks for major financial players from individuals whose actions could have fallout for the company, according to the law."

Measure aims to strengthen the stability of German finance sector

Andreas Krautscheid, chief executive at the Association of German Banks, explained, "The planned change to dismissal protection for high earners in the Brexit law will increase the attractiveness for foreign companies. This is a positive signal to strengthen the competitiveness of Germany as a location of choice for the financial industry.”The bill, which was approved by parliament’s finance committee on Wednesday, has the potential to affect up to 5,000 bankers, according to government estimates.But the move has not impressed labour organisations and left-wing opposition politicians who are opposed to any relaxation of workers' legal protections. The trade union group DGB described the measure as “constitutionally dubious, superfluous in terms of finance policy and socially damaging".

Legislation aims to reduce impacts of a no-deal Brexit

The wider Brexit legislation is designed to prevent market chaos, particularly if Britain crashes out of the European Union without a deal, and includes protections for existing derivatives contracts that companies have concluded with UK banks.Last December, Germany passed an immigration law focused on attracting skilled workers from outside the EU in an attempt to remedy a chronic skills shortage.Business leaders had lobbied the government to ease immigration legislation, arguing that parts of the economy were being stifled by a lack of workers and that the long-term effects could be irreversibly damaging.The Guardian reported, "The Fachkräftezuwanderungsgesetz – or skilled labour immigration law – will make it easier for employers to recruit from outside the European Union, amid clear evidence that there are not enough German and EU workers to fill demand."Subscribe to Relocate Extra, our monthly newsletter, to get all the latest international assignments and global mobility news.Relocate’s new Global Mobility Toolkit provides free information, practical advice and support for HR, global mobility managers and global teams operating overseas.Global Mobility Toolkit download factsheets resource centreAccess hundreds of global services and suppliers in our Online DirectoryClick to get to the Relocate Global Online Directory