Redundancy shareholder

mitch1875

Hi, 18 months ago I was given shares in my employers business. In the agreement we had a 12 month non compete clause should we leave the business. The only exception being in the event of redundancy when this clause is excluded.

I was told in January that my role was at risk of redundancy and it was expected I would leave the business between September and December this year. I therefore was expecting to receive my redundancy payments as well as not having the non compete clause.

Today I am told as a shareholder I cannot be made redundant and have to agree to a compromise agreement and will leave in November. The non compete clause is now applicable.

What do I do? I have worked in the same industry all my life 25 years and cannot afford not to work for 12 months, my compensation covers only 6 months salary.

Is the company correct in saying I have to agree to the compromise?

Thanks

getmore4less

They are trying to pull one

no compromise unless the no compete is withdrawn and a reference is included.

Unless a substantial shareholder then I doubt the can't be redundant is true,

otherwise everyone would just buy shares in the place they worked.

get some legal advice, Union or legal cover on house or ...

AJ1982

Compromise agreements are subject to negotiation.

Putting it politely, if they want you out, they will follow a disciplinary or redundancy route, perfectly legit assuming all processes are followed. As you are being written out via a Compromise Agreement, some of the cards are in your hand. Also, you will need professional advice, all CA's are to be witnessed by a solicitor, who will also assist with your negotiating.

This cost is normally met by the employer, so I would get started with a Solicitor and get some costs.

TBagpuss

It seems highly unlikely. It is possible that there is a clause which requires you to sell your shares back to the company, or for them to be converted to non-voting stock, but as others have said, they cannot *make* you sign a compromise agreement., They can invite you to negotiate, and you can, as part of that negotiation, make clear that you require an agreement that they will not seek to enforce the non-compete clause and can also negotiate on the sum you receive and when you leave, and indeed the terms of any reference.

FreeBear

Depends. Are you an employee shareholder ?

The two main questions are -

How much were the shares worth when they were given to you ?

Did you sign a new contract as part of the agreement in accepting these shares ?

mitch1875

Thanks All, all helpful advice and I am in the process of appointing a solicitor.

For clarification I am not classed as an employee shareholder, this is where you forgo your employment rights. I am definitely not in this category.