22 May 2014
The Employment Lawyers Association (ELA) has warned of “significant” legal pitfalls in the Bank of England’s proposals to require financial firms to amend employment contracts to enable bonuses and other rewards to be clawed back. This would involve an extension to the Remuneration Code, which regulates pay and bonuses. The ELA says the personal culpability of the executive concerned should be the only ground for clawback and not, as proposed, misbehaviour or material error, material downturn in financial performance, or material failure of risk management.
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