Employment lawyers have warned that UK government proposals to defer bonus payments for senior staff could lead to employment headaches.
Under the proposals, the
Financial Services Authority (FSA) advocates a deferral of at least 40 per cent of bonuses to managers and high-profile staff. If the bonus was in excess of £500,000, the deferral would rise to 60 per cent. The payments could be delayed for at least three years.
The new code, which currently covers 27 of the largest banks, brokers and building societies, could be extended to cover 2,500 firms. It will mainly affect senior figures. Along with financial services staff, those working in the legal, treasury and compliance sectors could also be affected.
According to employment lawyers, those firms could then face legal challenges or be left at a competitive disadvantage. John Marshall, partner in the employment team at law firm Russell Jones & Walker, said, “There is a view that there will be an unfair competitive advantage for those firms abroad that do not have to comply.”
Concerns are rife that this further blight on high earners will provoke them into moving abroad, costing the UK its brightest business minds.
