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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12. Are there any particular rules or protocols that apply when terminating the employment of an employee in the financial services sector, including where a settlement agreement is entered into?
12. Are there any particular rules or protocols that apply when terminating the employment of an employee in the financial services sector, including where a settlement agreement is entered into?
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Germany
Germany
- at Kliemt.HR Lawyers
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- at KLIEMT
Employment relationships with risk-takers of significant institutions whose annual fixed remuneration exceeds three times the contribution assessment ceiling for general pension insurance can be terminated more easily, in return for a severance payment, even if a unilateral dismissal is not socially justified. For this purpose, the institution needs to file a motion to the labour court to terminate the employment relationship during an ongoing dismissal protection dispute. The court will then terminate the employment relationship and award a severance payment of up to 12 months‘ salary.
Where employers wish to amicably terminate an employment relationship, they will usually offer a termination agreement that provides for a severance payment as consideration for the job loss. Severance payments offered by institutions under the German Banking Act are, in principle, treated as variable remuneration from a regulatory perspective. Unless certain exceptions and privileges apply, this means that severance payments are subject to the regulatory remuneration rules that apply to variable remuneration, meaning that, for example, the bonus cap and ex-post risk adjustment mechanisms of IVV apply (section 5 paragraph 6 sentence 1 IVV). Exceptions are permissible, inter alia, if severance payments are granted in line with the company’s general policy on severance payments, payments to which there is a legal entitlement, and severance payments to be made based on a final judgment or court settlement.
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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