Loss of shares and Pension contribution due to employer
Discussion
A colleague in work signed up to the company share scheme approximately 5 years ago, it has since emerged that due to a company error he wasn't enrolled in the scheme until 5-6 months after he originally signed up. He became eligible via promotion and it turns out the company entered his payroll number into the system wrong and his share contribution and pensions contribution didn't start until an error was noticed that half year later.
Employer has effectively admitted fault and rectified the pension error but not the share error as they say they are tied by a tax law and plus the share price and exchange rate is vastly different to 5 years ago, they are now probably worth about 3 times as much as those 5-6 months he missed out on so he is in the mid to high four figures worse off than his colleagues.
Where does he stand on this legally? does he have a case to argue with the employer for recompense similar to what the shares are worth today as it wasn't his error that led to this..?
Employer has effectively admitted fault and rectified the pension error but not the share error as they say they are tied by a tax law and plus the share price and exchange rate is vastly different to 5 years ago, they are now probably worth about 3 times as much as those 5-6 months he missed out on so he is in the mid to high four figures worse off than his colleagues.
Where does he stand on this legally? does he have a case to argue with the employer for recompense similar to what the shares are worth today as it wasn't his error that led to this..?
The Leaper said:
Why has it taken the employee/colleague 5 years to realise something was wrong with the administration of the share scheme as far as he was concerned?
R.
Can't sell them for 5 years (at least not without paying tax on the sale & losing any matched shares the company bought you), Company hadn't set up an online share portal during that time so that employees could monitor their shares. So nobody paid them much interest knowing you couldn't sell any without paying tax. R.
Mattt said:
Did he have money deducted from his payslips?
I'm not 100% sure on that I'd have to ask him, he didn't technically work for the company when he had a promotion he was a contractor even though the promotion was basically him qualifying out of an apprenticeship and he'd have been doing the job for a few months unsupervised before finishing the apprenticeship. Mattt said:
Did he have money deducted from his payslips?
Ok so he originally sent off his details ready for deductions to start on October, He noticed in December that the deductions were not showing on his pay slip, he queried this with HR and was told they would start again for December payroll if possible, he noticed that they didn't and queried again in January, they stated again that the deductions should be in January payroll, again they were not and he quereied again in February. Therefore his contributions didn't start till March and he missed out on 5 months of the scheme. He then noticed 5 years later when we had direct access to our shares online set up by the company how much those shares he's missed out on are now worth by comparing with a colleague.
Employer has in a way admitted the fault of not setting up the purchase due to a clerical error: his payroll number as an apprentice which he used on the form didn't technically exist as he would have been issued with a new number when becoming full time employed he was not aware of this but the contractor dealing with the form submission should have flagged this.
Company backdated his pension contributions because of this but state they cannot share purchase for him to the value because of tax reasons. But I would have thought they can pay him the value of the shares as a form of bonus?
Breadvan72 said:
If the company continues to be difficult, your friend should take legal advice and if need be send the company a letter indicating an intention to make a claim for the loss that he has suffered because of the company's mistake. I can recommend a direct access barrister who has the appropriate skill set to advise on this matter (not me - I don't do direct access work). PM me if you would like details.
Cheers mate, waiting to hear back from his union ATM to see what they say about it in a legal sense although it's unlikely they'd be able to help him in any legal proceedings they may be able to tell him where he stands so il let him know about your offer. Even if there's no legal obligation I would say there's a moral one especially when the sum involved is significant to him and for them they've probably put more in the bin/the drain today. samdale said:
Surely he knew when he finally started making payments that he'd missed out on buying 5 months worth? Why did he not continue to query it then and only now? Maybe it's because he knows the profit on the shares is guaranteed? 
Struggling to have sympathy for him TBH.
Maybe chase it again in another ten years when they're double the price again? Making ~£6k from ~£2k you never invested sounds good to me!
Read above he started in month 1, noticed that the payments by the company weren't happening in month 3 and notified them, nothing happened in month 3 and 4 which the company admitted to in email and back paid his pension payments but not the shares. Struggling to have sympathy for him TBH.
Maybe chase it again in another ten years when they're double the price again? Making ~£6k from ~£2k you never invested sounds good to me!
Company back paid the pension payments but said they basically can't back buy the shares for tax reasons.... but what I'm asking is can they back pay him the value of those shares? Multi billion pound company
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