Banks and financial institutions in the City may see a resurgence in legal claims by disgruntled employees who are disappointed by their bonus in what is expected to be a flat or reduced 2015 bonus round, says GQ Employment Law, the specialist employment law firm.
One of the UK’s big 4 banks has already confirmed that its 2014 bonus pool is 21 percent smaller than in 2013. GQ Employment Law explains that tougher EU and PRA/FCA regulations on banker pay has made it impossible for banks to offset disappointment with weak bonuses this year by guaranteeing a bigger bonus next year. Jon Gilligan, Partner at GQ Employment Law, says: “Every year since the credit crunch you get bankers who are disappointed with their bonus but the options that banks have in terms of stopping that dispute turning into a legal claim have become more limited. Whilst 2014 hasn’t been a banner year for banks it hasn’t generally been a crisis year so more bankers have entered bonus season with reasonably strong expectations over bonuses.”
Smaller City institutions such as hedge funds and asset management firms do not face the same restrictions relating to bonus pay as the larger banks, which means these businesses have greater discretion over how much they award their employees and in what form.
