In the past, Germany’s labour laws have often been cited by financial institutions as being Frankfurt’s main drawback as a centre for international finance: minimum statutory redundancy is twice as generous in Germany as in the UK, and special protections also apply for older workers and those with families. These measures have not been favourable to an industry which typically hires and fires more than other sectors. However, the German government has put forward plans to impose an upper salary limit on employee protections of €100,000 or £150,000, making redundancy payments significantly less favourable. The Financial Times reports that such a measure could result in Frankfurt becoming the natural choice for City of London banks which are looking to safeguard access to the single market, especially as seven of the ten global banks that took part in the Financial Times’ study already had a unit in the financial centre. However, relocating staff from London to Frankfurt presents its own separate challenges and UK bank bosses may still need further convincing.
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