After 22 years with my last employer I was made redundant in May. I found a new position starting on the 25th August working for a Dutch company as UK Sales Manager. They sent me a 2 line email confirming my position and note saying contract to follow. I received the contract 4 weeks after my start date. One part of the contract states I am agreeing to a 6 month notice period, without pay should I join any competitor, affiliated business, agent or merchant etc etc. They have also included a 5000 euro per day fine should this contract be violated. I have refused to sign the contract on the above clause which has obviously annoyed them, now saying I have had access to all their contacts, pricing, market knowledge etc and basically they'll do anything in their power to prevent me working for any affiliated business, which is a bit ambiguous to say the least ! Appreciate I've not signed it so its not legal but things are getting a little fractious and I have to say I don't trust them one bit should I decide to resign or probably, the way things are going I'll get sacked after my 6 month trial. Can this be legal in the UK ? surely a contract of employment should be issued before the official start date so any clause can be discussed and modified before the start ? 6 months without pay ? Any help would be appreciated......
:Wideyed: That is outrageous, no one in their right mind would sign that. I am not a lawyer but will follow this one with interest.
The word from my "legal oracle" is as follows... First - contact ACAS immediately, they will give you free advice over the phone. They are the ones who mediate in tribunals and know exactly what the law is. However : the employer has up to one month to issue the contract after the start of work. They can put pretty much anything they like into the contract. Having a clause that says you can't go off and work for a competitor is not uncommon. On the plus side - the fact that you have had access to their business information for months before getting a signed contract is their fault, not yours. So - if they sack you after six months for not signing the contract you would have a good case to take to a tribunal because it wasn't your fault, you were just doing what they wanted you to do. Also - the six months unpaid notice : the only way they would know you were going to work for a competitor after you left them would be if you told them. If you just worked your six month notice period then left to join someone else they would then have to try to claim the money back from you. A friend of mine is currently going through a similar process and the advice he has been given is that although the original employer could attempt to recover the pay via the courts, it's not usually financially viable for them to do so and they usually wouldn't bother. Contracts can be amended after you have started work, but both sides have to agree. What it comes down to is - how much do you want to work for these people? If you want to, then sign the contract. If not, or signing the contract is a big problem for you, then leave... The most important thing is - contact ACAS...
True, it is common for senior responsible posts. But a clause purporting to impose a massively disproportionate, punitive fine is not so common. And is quite possibly illegal.
My understanding is that clauses which prevent you from leaving to work for a competitor or customer cannot be enforced. It is unreasonable for an employer to try to prevent you from earning a living, particularly as most people tend to stick to one industry and all their knowledge and skills are aligned with that industry. Also I don't think they can hold you to 6 months unpaid notice. If you are in a notice period then you are employed by them and a salary is due. They can put you on gardening leave but they still have to pay you.
This reminds me of the case of Jose Ignacio Lopez de Arriortua who was a senior executive with General Motors in 1993. Just as GM in Detroit (CEO: Jack Smith) was announcing that Arriortua was being promoted to head of all GM's North American operations, he discovered that Arriortua was on a plane heading to Germany where he was taking up a leading role at VolksWagen. Not only that, but Arriotua had taken with him his whole team consisting of dozens of top engineers and managers, along with a huge quantity of confidential documents detailing GMs strategic plans. GM was outraged at this blatant poaching by VW. GM sued and eventually VW was forced to pay GM $100 million compensation, and sack Arriortua. The whole incident was an example of sharp practice bordering on fraud by VW, not for the first time nor the last.
Well... I'm no expert, and I'm guessing no-one else here is either. So - contact ACAS, because they are.
