Permanant Employee -

[ClearSky Accounting Dan]

MODS - Sorry, submitted too fast! Can you please change subject to: Permanant Employee - Restrictive Covenant?

Hi All,
Bit of an odd one, hoping someone can help me.
My partner decided to move companies due to salary demands and found a position paying better money elsewhere.
She handed in her notice at which point her boss asked her to stay and meet the salary being paid by the other company.

However, HR have asked her to sign a form (note, this is not an amendment to her contract) saying she will stay at the company for the next 12 months. She has no intention of leaving but does not want to sign the form.

I've advised he not to sign, however if she were to sign would it be legal?

12 months strikes me as excessive and my gut feel is it would not be enforceable due to restriction of trade and because it would not mirror the contents of her contract. It would make more sense to pay the extra salary as a bonus at the end of the 12 mths but this is not an option they are willing to consider.

Any thoughts welcomed.

you're right, it is an odd one.

I agree that the effect of the offer could be like a restriction, but I'm not sure that this is the employer's intention. I think it's a mis-guided attempt to ensure she only gets extra money if she stays for a certain length of time. If your partner signs the letter, it would almost certainly have the effect of being a variation to her contract. You can agree variations to contracts verbally or in writing and you don't need to set out all the terms of the contract again.

I don't want to get too bogged down in the legalities of this, but I think the employer's offer could be a binding contractual change.

The key question is: what would happen if she left her employer after, say 6 months. The employer could then try to recover the extra element paid to her over the last 6 months.

Legally, in order to do this, there are 2 alternatives:
- firstly, they could sue her in the County Court and claim back the 'extra' element;
- secondly, they could rely on a contractual power to make a deduction from her salary (i.e. from any salary owing to her at the end of employment). From what you've said, it doesn't appear that the letter contains such a power. However, her contract of employment could contain such a power.

Practically, regardless of whether they the employer has the contractual right to make a deduction from salary, the employer may simply make a deduction meaning your partner loses the extra salary element she hoped to receive. If she believed that the employer didn't have the right to deduct that money from her salary, she would then have to go to an Employment Tribunal and claim an unlawful deduction from wages. There is always a risk that an Employment Tribunal would side with the employer.

Overall I would recommend that your partner:
- agrees with her employer that the extra salary is not conditional upon her staying for a certain period of time (and there's no requirement to sign anything); OR
- she takes the other job.

One final point: what if your partner was made redundant within the 12 month period? In that situation, she would be leaving employment, but not because she resigned. I'm not sure that the letter is sufficiently clear about the circumstances in which she is entitled to the extra salary or not.

I hope this helps.

[SueEllen]

MODS - Sorry, submitted too fast! Can you please change subject to: Permanant Employee - Restrictive Covenant?

Hi All,
Bit of an odd one, hoping someone can help me.
My partner decided to move companies due to salary demands and found a position paying better money elsewhere.
She handed in her notice at which point her boss asked her to stay and meet the salary being paid by the other company.

However, HR have asked her to sign a form (note, this is not an amendment to her contract) saying she will stay at the company for the next 12 months. She has no intention of leaving but does not want to sign the form.

I've advised he not to sign, however if she were to sign would it be legal?

She shouldn't sign it and take the other job if it's still open to her.

On a moral level no employer who values their employees would wait for them to find a better job before offering them a pay increase which is at or near the level of a competitor.

On a legal level whether it's legal or not doesn't matter. The company will fight it legally if they are a multi-national or a public sector organisation as they have the money to waste on such fights regardless if they are wrong or right. They are also large enough not to care particularly about bad press.

If they are a smaller company then they won't bother as they would spend more money on lawyers then what the piece of paper she is made to sign is worth.

[Gentile]

I've advised he not to sign, however if she were to sign would it be legal?

12 months strikes me as excessive and my gut feel is it would not be enforceable due to restriction of trade and because it would not mirror the contents of her contract. It would make more sense to pay the extra salary as a bonus at the end of the 12 mths but this is not an option they are willing to consider.

Any thoughts welcomed.

PS: In answer to your question: Yes, I suspect it would be legal and enforceable. UK Courts have a habit of upholding contractual obligations that are voluntarily entered in to if things get that far. And, in any case, even if it were an illegal and unenforceable agreement, it's a hassle to have to prove it, so why risk it? If her company wants to use anything other than being a desirable place to work as your partner's compelling reason to stay with them, that's a bad sign. They should just be happy she's considering their offer, rather than trying to include caveats that makes their offer less attractive than the one she already has in hand.

[Gentile]

MODS - Sorry, submitted too fast! Can you please change subject to: Permanant Employee - Restrictive Covenant?

Hi All,
Bit of an odd one, hoping someone can help me.
My partner decided to move companies due to salary demands and found a position paying better money elsewhere.
She handed in her notice at which point her boss asked her to stay and meet the salary being paid by the other company.

However, HR have asked her to sign a form (note, this is not an amendment to her contract) saying she will stay at the company for the next 12 months. She has no intention of leaving but does not want to sign the form.

I've advised he not to sign, however if she were to sign would it be legal?

12 months strikes me as excessive and my gut feel is it would not be enforceable due to restriction of trade and because it would not mirror the contents of her contract. It would make more sense to pay the extra salary as a bonus at the end of the 12 mths but this is not an option they are willing to consider.

Any thoughts welcomed.

Say, "sure, I'll sign your 'note', provided you sign this 'note' here stating that the reciprocal notice period I can henceforth expect from you is now 12 months also". I guarantee you they'll drop it, and will probably withdraw the offer to match their competitor's salary offer too. Companies are always trying it on. The last permie job I left wanted me to sign a "parting agreement" stating that I'd indemnify them against any loss of business they might suffer by my revealing trade secrets to their competitors. Even though I'd no intention of doing so, there's no way I'd sign anything I wasn't legally compelled to. Most lawyers, I'm sure, would advise the same.

It's never a good idea to accept a counter offer in my opinion anyway, btw. Your partner had good reasons for looking around, I presume, and whatever those reasons are will still exist if she stays. And now that she's forced her employer's hand to up her salary just to retain an asset they thought they had already bought, her loyalty will probably be in question and they may well take the first opportunity that comes along and is more convenient for them to get rid of her. Forget it, and leave is my advice. There's no added benefit to staying, and some significant potential for a downside, so why risk it when she can make the same salary elsewhere without signing any of her rights away?

[northernladuk]

She isn't; apologies my post was not very clear.

She loves where she works and isn't lacking motivation but her current level of salary before the pay rise means she cant afford to stay working there when inflation and train costs have risen but her salary has not - a few K more a year means she can.

Really? a few K a year. 1K is approx £60 a month in hand. That much is the difference between being able to work there or not? If it is that tight she definately needs to move and get a career ladder else end up chasing the pennies for ever?

Anyway, that is your personal circumstances and choice so will leave that.

[Mister Clark]

She is permie, she shouldn't be comparing contractor rates. That is a sure way to stay miserable.

She isn't; apologies my post was not very clear.

She loves where she works and isn't lacking motivation but her current level of salary before the pay rise means she cant afford to stay working there when inflation and train costs have risen but her salary has not - a few K more a year means she can.

[northernladuk]

From a motivation POV she loves working there but she aint earning contractor rates and is effectively earning less this year than last when inflation and other expenses (read train costs) are factored in.

However, I agree in general with the points raised and will pass along, I also said she should jack it in and leave.

Thanks for the comments.

She is permie, she shouldn't be comparing contractor rates. That is a sure way to stay miserable.

[Mister Clark]

From a motivation POV she loves working there but she aint earning contractor rates and is effectively earning less this year than last when inflation and other expenses (read train costs) are factored in.

However, I agree in general with the points raised and will pass along, I also said she should jack it in and leave.

Thanks for the comments.

[BolshieBastard]

MODS - Sorry, submitted too fast! Can you please change subject to: Permanant Employee - Restrictive Covenant?

Hi All,
Bit of an odd one, hoping someone can help me.
My partner decided to move companies due to salary demands and found a position paying better money elsewhere.
She handed in her notice at which point her boss asked her to stay and meet the salary being paid by the other company.

However, HR have asked her to sign a form (note, this is not an amendment to her contract) saying she will stay at the company for the next 12 months. She has no intention of leaving but does not want to sign the form.

I've advised he not to sign, however if she were to sign would it be legal?

12 months strikes me as excessive and my gut feel is it would not be enforceable due to restriction of trade and because it would not mirror the contents of her contract. It would make more sense to pay the extra salary as a bonus at the end of the 12 mths but this is not an option they are willing to consider.

Any thoughts welcomed.

Couple of options

stay, take the increase and sign
stay, take the increase but dont sign
Leave for other job.

Tend to agree with NLUK here, why has it taken a decision to quit to get additional money and more importantly, I presume the boss said no strings attached rather than I'll give you the same dosh but you have to sign a piece of paper saying you'll stay for 12 months? I've no doubt the workload will be increased as well if they are wanting a written committment to stay!

Personally, if she made a decision to quit, I think that's what you have to do as things start to get messy when these 'compromises' get bandied about.

I'd presume if she signed the committment to stay but walked, the employer could try and recoup it's losses ie training a replacement, etc.

[LisaContractorUmbrella]

Interesting.

Would you be able offer an opinion as to what could happen if it went to a tribunal? I'm guessing compensation could become payable.

I should also mention that along with the pay rise she has been asked to fulfill additional tasks/resposabilities - I'm not sure if that adds a different slant on the situation.

In reality it's unlikely to get before a tribunal - although I don't think the clause would be illegal I think it would be unlikely to be enforced in terms of legal action for breach of contract. The pay rise adds a different perspective entirely - the increase in salary is then not being paid as an incentive to stay with the company but as a raise commensurate with the additional responsibilities.

[northernladuk]

Money is a very poor motivator and only has a very short term impact for most professionals. In fact it is generally a demotivator and offering more just removes the demotivation rather than adding anything good. If she wants to go she should go IMO she could get the same money and a much more interesting job. There is also the kick in the balls that she was always worth that money and they have taken her for a ride in the role. Time to go I would say, but......

What is the penalty for not staying? I have had to sign something similar but it relates to cost of training that I have been given. The penalty was to pay the cost of the training back should I leave within 12 months. In once case I did and had to pay it. Saying that I savvy enough to fight it. The course got me the next gig so just wrote it off as an investment.

They can't just say you HAVE to stay, there has to be some penalty for if she doesn't. They can't force her to stay with no get out. No one can sign something like that and know they can honour it surely. I can't believe it is legal to tie someone to a job so the only option out is a tribunal.

Try and find out what they would consider suitable compensation so you can make a better decision. Is it to pay the extra she earned back for x months or something?

[Mister Clark]

IANAL but I would look at the 'reasonableness' of the situation - an employee who has handed in their notice has usually done so because they have some level of dissatisfaction with their job or their employer. If they are persuaded to stay with a financial incentive their dissatisfaction will not necessarily disappear - the company are making a financial investment in the employee and are protecting that investment by asking for a firm commitment to the company - I am not sure this would be viewed as unreasonable in a tribunal.

Interesting.

Would you be able offer an opinion as to what could happen if it went to a tribunal? I'm guessing compensation could become payable.

I should also mention that along with the pay rise she has been asked to fulfill additional tasks/resposabilities - I'm not sure if that adds a different slant on the situation.

[LisaContractorUmbrella]

IANAL but I would look at the 'reasonableness' of the situation - an employee who has handed in their notice has usually done so because they have some level of dissatisfaction with their job or their employer. If they are persuaded to stay with a financial incentive their dissatisfaction will not necessarily disappear - the company are making a financial investment in the employee and are protecting that investment by asking for a firm commitment to the company - I am not sure this would be viewed as unreasonable in a tribunal.

[Mister Clark]

MODS - Sorry, submitted too fast! Can you please change subject to: Permanant Employee - Restrictive Covenant?

Hi All,
Bit of an odd one, hoping someone can help me.
My partner decided to move companies due to salary demands and found a position paying better money elsewhere.
She handed in her notice at which point her boss asked her to stay and meet the salary being paid by the other company.

However, HR have asked her to sign a form (note, this is not an amendment to her contract) saying she will stay at the company for the next 12 months. She has no intention of leaving but does not want to sign the form.

I've advised he not to sign, however if she were to sign would it be legal?

12 months strikes me as excessive and my gut feel is it would not be enforceable due to restriction of trade and because it would not mirror the contents of her contract. It would make more sense to pay the extra salary as a bonus at the end of the 12 mths but this is not an option they are willing to consider.

Any thoughts welcomed.