Employment Contract Changes Help - Potential downward review of pay?

[Deleted User]

Now Resolved

lincroft1710

If you don't sign, with only 7 months service, you can be dismissed without reason.

If you do sign, although the 18 month non compete clause may be unenforceable, I wouldn't be keen on agreeing to a possible arbitrary pay reduction.

Perhaps time to look for another job?

LittleVoice

Deleted_User said:

Hi -
I have been employed for 7 months with one company. They are setting up a new company, of which I am being offered a shareholding. However, originally it was supposed to be the identical employment contract just with the change of company name. Today I have received a new contract with numerous changes to the original and I don't know where I stand with this? There has been a change on termination periods, a change on pay and a change on non-compete clauses.
The pay says that pay reviews will take place every April, no guarantee of increase (think this is normal wording) but then states after that pay can also be reviewed downwards! Now I've never seen this and I'm not comfortable with signing to this wording.
Also my non-compete clause has been changed and extended to now cover an 18 month period, all of UK and sounds like no job in the industry essentially and quite vague.

Does this sound right to everyone and where do I stand?
Thanks

Are they holding out the supposed carrot of a shareholding to compensate for the possibility of a downwards pay review?  Have they given you full details of the offer of shares?

[Deleted User]

Thanks both - @lincroft1710 I had been led to believe it was an identical contract. Being sent it was the first I knew as it was a different situation to what we had discussed. There is very little in the industry and I would probably set up by myself instead (very niche area). That's also why I'm not comfortable with the 18 months because it's such a small industry that everyone knows everyone!
@LittleVoice no it shouldn't have been a carrot, it was all in full discussion of contract being the same, just it was always on the table that I would have a shareholding following my probation period. It's never been discussed about the possibility of downwards pay though. I don't know if it's because this has been drawn up after Covid hit and therefore they are trying to cover more bases.

Masomnia

Possibly depends on your role/the sector you're in but I reckon an 18 month restrictive covenant is not going to be enforceable. I'd take legal advice on that if you're worried.

The clause won't give them a blanket right just to cut your pay arbitrarily, and it may well be that they won't be seeking to rely on it anyway. If they're giving you a shareholding I think it's unlikely that they will be looking to cut your pay. I'd ask nicely if they'd mind taking it out. If they refuse it'll give you a good idea of where you stand.

LittleVoice

Deleted_User said:

Thanks both - @lincroft1710 I had been led to believe it was an identical contract. Being sent it was the first I knew as it was a different situation to what we had discussed. There is very little in the industry and I would probably set up by myself instead (very niche area). That's also why I'm not comfortable with the 18 months because it's such a small industry that everyone knows everyone!
@LittleVoice no it shouldn't have been a carrot, it was all in full discussion of contract being the same, just it was always on the table that I would have a shareholding following my probation period. It's never been discussed about the possibility of downwards pay though. I don't know if it's because this has been drawn up after Covid hit and therefore they are trying to cover more bases.

When did/does your probation period end?

Do you have the full details regarding this shareholding offer?  For example, are the shares of the same type as other shares in the company?  Would you have to sell them back to other shareholders if you wanted to dispose of them?

[Deleted User]

@LittleVoice I've had the agreement sent at the same time and I need to examine it to see. There's a lot of info on both contract and shareholder's agreement so I need to go through it further over the weekend. Probation ended after 3 months.
@masomnia that's what I feel is the best course of action, to nicely approach them on the different areas that I'm not happy with and that they are significant changes from my first contract. Hopefully they will amend and sort but if not then I feel I know the real thought process behind the changes.