There will be increasing numbers of disputes over City contracts following the annual bonuses, lawyers predict.
The conflicts will be triggered by the rise of ‘restrictive covenants’ in terms and conditions, set out to protect the interests of City firms in a progressively competitive industry, law firm Wedlake Bell said.
“We have already seen an increase of about 25% on last year in the number of employees trying to negotiate their way out of restrictive covenants written into their contracts,” said Richard Isham, head of employment at Wedlake Bell.
Restrictive covenants are common in City employment contracts where ‘gardening leave’ is a common practice.
“Since people are key assets in City businesses because they tend to be knowledge- and relationship-based, employers are alert to the threat of staff defection, be it individuals or entire teams,” Isham said.
“The reasonableness of the legal clauses companies use to protect themselves is now really going to be put to the test.”
December is traditionally known as the ‘bonus season’ with many employees looking to move to rival firms in the new year. City bonuses are predicted to reach levels not seen since 2001 as the stock market picks up.