Six wonderful things BNP Paribas's traders suddenly stand to lose
French banks have been getting meaner for some time now. Both BNP Paribas and SocGen have been making their investment bankers redundant and last month BNP Paribas crossed the Rubicon and said it was going to be making reducing headcount at its Paris office. Now, BNP has ratcheted up the ruthlessness to a whole new level: it's demanding that 150 traders in London shift onto UK employment contracts.
The traders have been working at BNP's Harewood Avenue office on French employment contracts for 'several years' according to Le Monde. If they don't accept the move onto British contracts, they need to present themselves for work in Paris in 15 days. The affected traders are complaining that there aren't any jobs at BNP in France anyway.
BNP insisted it wasn't trying to make anyone redundant but was merely trying to standardize employment contracts for its employees in London, where 400 French traders are on UK contracts already.
It's easy to see why French traders compelled to accept British contracts might feel a little jittery, however. Under French employment law, they will hitherto have benefited from:
Long French holidays
Under French employment law, employees get minimum of 25 paid holiday days each year, plus 11 public holidays - making a total of 36 days of paid leave. In the UK, employees are entitled to a minimum of 28 days a year in paid holidays, and the UK's eight public holidays need not be paid.
Regular French rest periods
A law which says that all employees, including executives (although not 'senior executives) are entitled to 11 hours of consecutive rest every day and to 35 hours of consecutive rest at weekends. There's nothing comparable in the UK.
Generous French severance pay for long-serving employees
If you've worked for a French employer for more than 10 years and are made redundant, you'll be entitled to severance pay equivalent to one third of your monthly salary for each year of service. In the UK, severance pay can be as high as 37.5% of monthly salaries for each year of service, but this only applies to each year that an employee was aged 41 or more.
A French law which says it's harder to make people redundant if they've got a lot of children
Under French employment law, employers need to take consideration of the number of dependents an employee has before making them redundant. In the UK, you can make a father of 25 redundant with impunity. French employers also need to pay attention to the employee's length of service and whether the employee might have problems finding new work. Long serving traders who might be unemployable elsewhere are therefore comparatively protected.
The protective power of the French Unions
In France, even bankers are members of trade unions. BNP's bankers are covered by the la Confédération française démocratique du travail, or CFDT, among others. When a French employer like BNP is making 'collective redundancies' it's compelled to write a collective redundancy plan and to consult with the employee works council on this. The works council has access to an auditor (paid for by the company) and the company has to justify the need for redundancy based upon sound economic issues. Only when the works council has fully scrutinized the redundancy plan (and usually negotiated more generous severance terms) can the redundancies go ahead. This doesn't happen in the UK either.
Compounded by a pay cut
The new contracts may be compounded by a pay cut. One of BNP's traders complained to Le Monde that his French 'benchmark' salary hadn't increased since he left Paris - implying that his new UK salary would be re-rated to a lower amount.
Another trader complained of having a gun held to his head over the whole issue. Given the imminence of the long French holiday season, it's also unfortunate timing: traders on UK contracts who decide to take the entirety of August off could find they've used up most of their statutory holidays for the next 12 months.
Related links:
Hedge fund excitement in France's quant valley
Fearful of returning to France, French bankers sit it out in South Kensington
