Employment in Financial Services
Contributing Editor
In a rapidly evolving regulatory landscape, employers in the financial services sector must ensure they are fully compliant with local employment rules and procedures. Helping to mitigate risk, IEL’s guide provides clear answers to the key issues facing employers in the sector
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13. Are there any particular rules that apply in relation to the use of post-termination restrictive covenants for employees in the financial services sector?
13. Are there any particular rules that apply in relation to the use of post-termination restrictive covenants for employees in the financial services sector?
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Germany
Germany
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Post-contractual non-compete obligations will typically only be binding when a severance payment is agreed upon that amounts to at least 50% of the pro-rated annual remuneration that the employee received before the obligation comes into force). It is advisable to regularly review for which roles such arrangements are agreed upon as they can be costly, and a unilateral waiver does not automatically eliminate the obligation to pay compensation, only if sufficient advance notice is given.
In the financial services sector, the severance payment for non-competition covenants is considered variable remuneration and subject to the same regulatory compensation rules (for example, section 5 paragraph 6 sentence 1 IVV, section 6 paragraph 4 No. 2 Investment Firm Remuneration Ordinance). However, severance payments do not have to be factored into the ratio of variable to fixed remuneration according to section 25a paragraph 5 sentences 2 to 5 KWG if, subject to section 74 paragraph 2 of the German Commercial Code, the payments do not exceed the total fixed remuneration originally owed.
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Contributors
Belgium
Van Olmen & Wynant
Brazil
Tortoro Madureira & Ragazzi Advogados
France
DS Avocats
Germany
Kliemt.HR Lawyers
Hong Kong
Morgan Lewis & Bockius
India
AZB & Partners
Ireland
Maples Group
Isle of Man
Cains
Mexico
Marván, González Graf y González Larrazolo
Netherlands
Lexence
Singapore
TSMP Law Corporation
Switzerland
Walder Wyss
UAE
Morgan Lewis & Bockius
United Kingdom
Morgan Lewis & Bockius
United States
Morgan Lewis & Bockius
Contributors
Germany
Kliemt.HR Lawyers