Restrictive Covenant

JAM1376

Hi all

My OH has worked for his company for the last 9 months and has only just got written particulars (after having a row with one of his bosses and giving his verbal notice - its a long story). After a meeting with the other sensible boss, they have now sent him a contract to sign (with no mention of the notice he put in!!).

There are two things I am unsure about

1. Can they insist he has a 12 month probation period (verbally they have said that started the day he bagan so only 3 months left)? And the contract says they have the right to extend that. Is this allowed? 12 months is a blooming long probation .

2. In the 'restrictive covenant' they have said that he cannot work for a similar company for 12 months after he finishes his current role within 30 miles of the business. Is this allowed/legal? I'm sure I've heard some one somewhere say they cannot enforce that.

We are not sure whether they have put the probation thing in so the manager he rowed with can sack him whenever he wants with no reason. When he had supposed 'review' in April (but no paperwork from it) he got a pay rise and it was never mentioned he was still on probation.

Its all very complicated but I'm trying to keep it simple. Answers to the questions above might help me get my head round it!!!!

Thank you :beer: :beer:

Savvy_Sue

The restrictive covenant may be deemed unreasonable if it would unreasonably limit your OH's chances of earning a living, I believe.

No idea about the initial length of probation, although the possibility of extending it if necessary is legit. However, I don't think that extending it beyond a year would remove your OH's employment protection.

Have a look at ACAS.

JimmyTheWig

I'm confused.
If he's given his notice what's the problem with the probation period.

Not sure whether the other is enforcable or not.
Has he learned a lot from the current company that he can then take elsewhere? I.e. I can imagine that if they have trained him in this area from scratch for the last 9 months he may now only becoming profitable. I can see that it is unfair for them to, in effect, do free training for their competitors and they might want compensation.
But if he started at this current place with all the relevant skills and has made a positive contribution for the last 9 months I don't see what else they can expect.
But I have no idea from a legal standpoint.

Savvy_Sue

He gave notice verbally and I don't think he intends it to be acted on. Notice is usually given in writing: I would however speak to the reasonable person and say "You know I lost it with Fred the other day over this issue with my T&C and told him I'd be leaving, now I've got them I don't intend to leave." Or something like that.

JAM1376

Hi both and thanks for your fast answers.

He has worked in the relevant industry for 20 years and basically set up a new 'office' for the new company. He brought all his skills to them as they had little experience in this particualr field. I don't want to say too much in case (very little chance I know!) his boss reads this forum!!!

If he could not work in this industry for 12 months he has no experience of any other job so yes, it would limit his chance of earning a living hugely.

With regards to putting his notice in and being on probation, he had a row with one of the bosses as he (the boss) said that in April he had agreed to certain terms which my OH had not agreed to. As he had nothing in writing (which he has asked for each week), he had no come back. The boss told him he would therefore have to pay back some of his wages as he had not worked the number of hours agreed. As they have his clock in cards each week they should have said something sooner if this was the case!!!

My OH felt frustrated and threatened and so (not thinking) said he was putting in his notice. The other boss then had a meeting with him saying they did not want him to leave and so they would sort his contract. It has now come through with this probation thing that is worrying me (more than the restrictive bit as I'm sure as said above, they cannot hold him to that).

I thought if he was still on probation they could get rid of him for no real reasona and just say it wasn't working out?

Will call ACAS later (have spoken to them about the other bits previously) but I never find them that helpful tbh.

Thanks for the info though. If anyone knows for certain about the restrictive bit, it would be great.

JimmyTheWig

Ignore the restrictive bit. I can't see how they would possibly enforce it.

In terms of the probation, for the first year I don't believe you have any rights at work and they can, regardless of probation or not, get rid of you for any reason they see fit with no compensation. Terrible, I know.
This period was 2 years under the Tories, at least Labour reduced it to 1 year (though they should have scrapped it completely).

olly300

JimmyTheWig wrote: »

Ignore the restrictive bit. I can't see how they would possibly enforce it.

They can go to court and get it enforced. Normally companies just threaten you and if it gets really bad they get solicitors to send you nasty letters.

I only actually have ever met one person who has been taken to court over a restrictive covenant and the restriction was more limiting than the JAM1376's OH. The radius was 8 miles as to ensure a medical practitioner didn't take on clients from the same village.

Most of the time employers don't bother because:
1. the covenant is so badly drafted it would be struck out
2. if the employee is going off to a client the putting the covenant enforce would actually harm their business.
3. the employee gets all their notice as gardening leave as they have a 3 month notice period.
4. the employer has so many clients that it is totally unenforceable.

In this case unless the restrictive covenant is drafted by a solicitor, which you can tell because it is specifically worded, then ignore it.

JimmyTheWig wrote: »

In terms of the probation, for the first year I don't believe you have any rights at work and they can, regardless of probation or not, get rid of you for any reason they see fit with no compensation. Terrible, I know.
This period was 2 years under the Tories, at least Labour reduced it to 1 year (though they should have scrapped it completely).

You do have rights - you have breach of contract, wrongful dismissal and discrimination rights. However you don't have any unfair dismissal rights.

Wrongful dismissal is different from unfair dismissal as it is based on the wording in the actual employment contract and not on what is presumed in law about your employment rights.

Personally I would refuse to sign the employment contract and send an email to one of the bosses stating that you do not agree with all the terms in this contract and will continue to work under the terms of your previous contract. (Doesn't matter if there was no written contract in place they will think there is one and look for it.) Either send the email from your home email address or do it at work and print it out.

If you don't send the email and continue to work it is presumed that you agree to the terms in the new contract. This will allow them when you OH eventually goes to harass him if he works for someone else nearby.

therealdessie

The probation can be as long as they like, and can be extended - six months is a common term but twelve is not unheard of; it comes down to whether employees will actually stand for it - and the probation does not/should not affect the right to company benefits in most cases, and certainly does not disclaim any statutory rights.

As for the covenent, it's legal and enforceable. It is there to protect the client base and intellectual property of the employer, therefore ensuring your OH or anyone else doesn't jump ship with a half dozen clients and proprietary information in their pocket. Yes it does limit options, but it's there for a sensible reason; not many people have skills so exactly specified that they cannot transfer them to similar business rather than direct rivals - those that do often sign an agreement not to do any of the above anyway.

JAM1376

Oh heck. Thats what I didn't want to hear!!!!!!!!!!!

If I type out the wording of the non-competition bit, would you know if it was likely to stand up? There is also some stuff about taking orders from the current companies clients but I don't think(?) this would really be relevant as my OH is not in sales.

Is it going OTT if we take it to a solicitor to check? Or is there somewhere that will do it for free? CAB?

After all that has happened with the company, I don't want him to sign it, get sacked (for any reason, just or unjust) and then be stuck not able to get a job.

We will draft a letter tonight and send it registered delivery (he works at a satelite site) saying he wants to discuss the T&C further as he doesn't agree, as you say. Also, he cannot sign the d*mn thing as it says 'I have been shown the company handbook' and he hasn't - he's been told its in the board room of HQ 2 hours drive away!!

Thank you for taking time to reply!!

JAM1376

Sorry Therealdesse, I din't see your post as I was typing my reply!

There is a confidentiality agreement in there too which he has no problem with saying he will not disclose any company confidential info. He does not have access to any of this anyway. He is simply technical service on a customer site. For the same reason, he could not take clients as he only knows the one he works for.

As far as getting another job, they are few and far between in his industry and his skills are not very transferable as it is all technical knowledge of the product the company suppies - which applies to the product no matter who supplies it. He was made redundant 18 months ago and really struggled to find a job in a different industry. Thats why he was so pleased this one came up.

Update: his nice boss has just called (and OH rang me for advice!!) and asked him if he will sign it. OH has told him the issues he has (mainly the 12 month restrictive bit now it seems) and they are arranging a meeting for next week. Hopefully will get it sorted out once and for all!

Thanks for all your help. If anyone has anything to add, please do, it all helps.

therealdessie

It would help to see the wording, but you're absolutely right, it would generally apply more directly to sales staff. As he's not involved in, and does not have access to, direct client contacts with influence or specific programming information for the product then the covenant would probably not be enforced - especially as he can transfer to a reseller, and this is a very common occurence in his industry.

Most likely what would happen is the company would ask that he runs any such position by them before accepting, and they will give the nod or not - if not then they would have a good basis for that. Not as bad as it first seemed.