Goldman Prepares to Shift Some London Staff to Frankfurt

Goldman Prepares to Shift Some London Staff to Frankfurt

Goldman Sachs has put more than a dozen of its London-based bankers, salespeople, and traders on notice that their roles will be relocated to Frankfurt in the coming months, Reuters reports, amid uncertainty over the ability of banks to conduct continental European business from the UK after it leaves the EU:

After months of patience and private lobbying, the U.S. investment bank has decided it can no longer wait for clarity from lawmakers on how its business might be impacted by Britain’s exit from the trading bloc and is taking the steps to minimize disruption to clients.

It has informed members of its London-based derivatives and debt capital markets teams working on German accounts that their activities will be relocated to its base in Frankfurt and to make the necessary preparations to move to those offices by end-June, the sources told Reuters.

A source tells Financial News that these transfers are part of a broader strategy to move staff closer to their clients and not part of Goldman’s Brexit contingency planning. However, the report comes just days after UK Prime Minister Theresa May that the divorce agreement would not retain the existing arrangement of “passporting” rights that allow financial firms to sell their services across the EU upon being licensed to do so in just one member country. The financial sector and industry groups have lobbied the government to maintain the passporting agreement, but May said Britain would not become a “rule taker” deferring to the authority of Brussels and would instead seek “a new relationship on financial services based on this concept of mutual recognition.”

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European Rights Court Strikes Another Blow Against Employee Surveillance

European Rights Court Strikes Another Blow Against Employee Surveillance

The European Court of Human Rights has found that covertly videotaping an employee at their workplace constitutes an intrusion into their private life in violation of the European Convention on Human Rights. In a decision handed down on January 9, the court ruled in favor of five former employees of a supermarket chain in Spain, who were fired after their employer caught them engaging in or facilitating theft, based on evidence from surveillance cameras that had been installed without the employees’ knowledge, Dentons attorney Claire Maclean explains at Lexology:

The employees challenged their dismissals before the Spanish courts, arguing that the use of covert video surveillance in the workplace without prior notice was unlawful. These challenges were unsuccessful so they raised proceedings before the ECHR alleging that the covert video surveillance violated their right to privacy protected by Article 8 of the European Convention on Human Rights.

The court held that the installation of the covert cameras had not complied with the Spanish legislation on data protection. The Spanish Data Protection Agency had issued an instruction clarifying that anyone using video surveillance had to place a distinctive sign indicating the areas that were under surveillance.

The court ordered Spain to pay each of the applicants 4,000 euros in respect of non-pecuniary damage, plus court costs, but rejected the applicants’ claim that they were entitled to pecuniary damages for the wages they would have earned had the Spanish courts declared their dismissals unfair and reinstated their employment at the supermarket.

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Uber Can Be Regulated As a Transport Company, ECJ Rules

Uber Can Be Regulated As a Transport Company, ECJ Rules

The European Court of Justice ruled on Wednesday that Uber should be regulated as a transportation company, not a technology company, potentially exposing the ridesharing platform to new licensing and tax requirements within the European Union and hinting at how the court will likely rule on other regulatory issues involving gig economy companies.

The court’s finding that Uber “must be classified not as ‘an information society service’ but as ‘a service in the field of transport’​​” means that under European law, it may be regulated differently in each member state, Sky News’s Bethany Minelle explains—in contrast to digital platforms, which are held to a single set of rules throughout the EU. This opens the way for EU countries and cities to hold Uber to the same standards as other transportation services in their jurisdictions:

While the long-running case, which originated in Spain, is not legally binding it is likely to foreshadow the decision in the majority of EU cases. The Barcelona-based legal firm representing the cabbies who filed the lawsuit said that the ruling was “a social victory” with “great judicial significance”. …

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Preliminary Brexit Deal Secures EU Citizens’ Right to Remain

Preliminary Brexit Deal Secures EU Citizens’ Right to Remain

An agreement reached before dawn on Friday in the first phase of Brexit talks between the UK and the European Union will preserve the rights of EU citizens currently living, working, and studying in the UK, as well as their British counterparts in Europe, Rob Moss reports at Personnel Today:

Theresa May said that EU citizens living in the UK would have their rights “enshrined in UK law and enforced by British courts”. But the agreement, published this morning, says the European Court of Justice will continue to have a role in overseeing their rights for eight years after Brexit – until March 2027. Guarantees will also apply to UK citizens living in other EU countries. …

There are around three million EU citizens living and working in the UK. The joint report states that the objective of the UK’s Brexit agreement is to provide “reciprocal protection for Union and UK citizens, to enable the effective exercise of rights derived from Union law and based on past life choices, where those citizens have exercised free movement rights” by the time of the UK’s withdrawal.

That EU citizens in the UK (and vice versa) would be granted the right to stay has been known since June, and many observers expected the Brexit agreement to include such a provision from the start. What remained uncertain was when these protections would be cut off: Originally, the government had proposed to limit eligibility for “settled” status to those living in the UK on the day the Brexit process was triggered (March 29, 2017), but May left open the possibility of changing it to the day Britain leaves the EU in 2019. Friday’s agreement appears to reflect the EU’s preference of the later date.

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Relocating From London After Brexit Will Cost Banks Millions

Relocating From London After Brexit Will Cost Banks Millions

One of the industries that stands to be hit hardest by Brexit is the financial sector, as many banks have headquartered their European operations in London and rely on EU passporting rights that allow them to access the entire single European market without dealing with regulatory authorities in each country. Like other organizations, banks have also benefited from the free flow of talent among EU countries, which the UK’s withdrawal from the union will close off.

While the uncertain future of post-Brexit Britain is motivating many banks to transfer many of their London staff to other European countries, these relocations are proving extremely costly, Bloomberg Businessweek’s Gavin Finch reports, with banks expecting to spend $500 million or more. These costs reflect the shortage of experienced bankers in alternative hubs like Dublin, Paris, and Frankfurt, as well as the reluctance of employees to leave London:

“There’s no doubt that the costs are significantly bigger than the banks originally expected,” said Jon Terry, a partner and pay specialist at PricewaterhouseCoopers LLP. “There aren’t enough qualified people in local EU markets to meet the needs of the banks, so they are going to have to rely on moving more expensive staff from elsewhere. And a lot of those people don’t want to move.”

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European Rights Court Limits Monitoring of Employee Communications

European Rights Court Limits Monitoring of Employee Communications

In a landmark ruling on Tuesday, the European Court of Human Rights ruled in favor of a Romanian man who was fired in 2007 after his employer determined that he had violated its policy barring the use of company resources for personal matters. Bogdan Barbulescu had created a Yahoo Messenger account for work purposes, and was terminated after his managers looked at transcripts of his chats on the application and saw that he had used it for personal communications. Romanian courts had ruled against Barbulescu, and the EHCR had agreed with those courts in January 2016, finding that the employer was justified in reading his personal chat logs in order to enforce its policy.

According to the New York Times, the 2016 decision courted controversy in Europe, where privacy is seen as a fundamental right. On Tuesday, the ECHR’s highest appellate division, the Grand Chamber, reversed the court’s position and found that Barbulescu’s privacy had been violated as he had “not been informed in advance of the extent and nature of his employer’s monitoring, or the possibility that the employer might have access to the actual contents of his messages”:

It said that only a few countries in Europe — Austria, Britain, Finland, Luxembourg, Portugal and Slovakia — have explicitly regulated the issue of workplace privacy through domestic legislation. Most countries in the region do, however, require employers to give prior notice of monitoring. In countries like Denmark, France, Germany, Italy and Sweden, employers may monitor emails marked by employees as “private,” but may not look at the content without permission.

The chamber ruled that countries should ensure that companies’ efforts to monitor employees’ communications, are “accompanied by adequate and sufficient safeguards against abuse.”

The court’s ruling is applicable in all 47 member states of the Council of Europe, including non-EU members Russia, Ukraine, and Turkey—in other words, every country on the European continent except Belarus and Kosovo. Following this decision, employers in the court’s jurisdiction are still allowed to monitor their employees’ digital communications, but not without limits, and not without making employees aware of that monitoring beforehand. TechCrunch’s Natasha Lomas outlines the criteria the court created for determining whether monitoring is valid:

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Survey: UK Employers Don’t Want Labor Laws Weakened Post-Brexit

Survey: UK Employers Don’t Want Labor Laws Weakened Post-Brexit

One of the many uncertain consequences of the UK withdrawing from the European Union is what effect it will have on employment law in Great Britain, a sizable portion of which is based on EU policies. While Prime Minister Theresa May and her government have taken pains to assure the public that the rights UK employees currently enjoy would not be scrapped, critics have doubted those claims, as some members of May’s generally pro-business Conservative Party have indicated that they see Brexit as an opportunity to dismantle these regulations.

British business leaders, however, may not be as keen on gutting employment law as the critics think. At People Management, Marianne Calnan outlines the findings of a new CIPD survey of employers, in which most said they viewed employment laws as essential, including those that they believed were in need of reform:

Unfair dismissal laws topped the list as most indispensable, with 93 per cent saying they were necessary. This was followed by the national minimum wage (87 per cent), parental rights at work (82 per cent), agency workers laws (75 per cent) and the Working Time Regulations (74 per cent). TUPE laws, at 32 per cent, were deemed the least necessary.

The Employment regulation in the UK: burden or benefit? report also found that some businesses wanted even more red tape around some aspects of employment law, with more than a third (36 per cent) noting wellbeing issues such as stress should be better legislated for and 30 per cent saying technology should be a focus. Meanwhile, more than half (52 per cent) went beyond what was required of them, while 44 per cent said they met minimum requirements.

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