Dubious letter from a company for a mortgage application
Discussion
Any legal beavers here that can answer this one. Employee in a shop asks the company for a letter, stating she has a guaranteed number of overtime hours, in support of a mortgage application. They do this for her. Her present employment contract states her basic hours, and says o/t will be ask for occasionally, the employee is expected to acquiesce. It also states that her basic hours can also be cut, if required, by the company. Her stance on this, is that because she has worked for a number of years with regular o/t, it now has become part of her contract by default. I’ve checked this on the net, and the answers is, maybe. Basically you would have to take the company to a tribunal to get the answer in her case. I doubt she could afford the legal fees for that. So, has any illegal act been committed here, by production of the previously mentioned letter she presented to the mortgage lender, by either her and/or the company? And how does she stand insisting on being allowed to keep those o/t hours going. Incidentally, some other employees have had o/t hours reduced.
IANAL, but given she has a signed letter from them stating she has guaranteed o/t I can't imagine she would need to go to an employment tribunal to establish that fact. I would have thought what was written in the letter superseded what was written in the contract
I would imagine that if they do try and cut her overtime, she could well take them to an employment tribunal, using that letter as evidence.
Has she or the company has deceived the mortgage provider though, (perhaps the company thought they were)? It sounds like it could be her honestly held belief that this was the situation, but it sounds like the company may have been done up like a kipper by her, if they thought the letter was a favour and now can't reduce her overtime when they need to.
I would imagine that if they do try and cut her overtime, she could well take them to an employment tribunal, using that letter as evidence.
Has she or the company has deceived the mortgage provider though, (perhaps the company thought they were)? It sounds like it could be her honestly held belief that this was the situation, but it sounds like the company may have been done up like a kipper by her, if they thought the letter was a favour and now can't reduce her overtime when they need to.
The only weakness to her ‘case’ is the legal costs if she wanted to do that. My wife had 1 letter written by an employment solicitor, that cost her £125. Most legal fess these days are circa £150/hr, so there isn't a chance in hell she could afford that. And has the shop has just reduced the total working hours, all the employees have had an o/t reduction. They could be nasty, and just declare her redundant, as the shop has excess staff now.
robinessex said:
The only weakness to her ‘case’ is the legal costs if she wanted to do that. My wife had 1 letter written by an employment solicitor, that cost her £125. Most legal fess these days are circa £150/hr, so there isn't a chance in hell she could afford that. And has the shop has just reduced the total working hours, all the employees have had an o/t reduction. They could be nasty, and just declare her redundant, as the shop has excess staff now.
The letter is simply a statement from her employer setting out the current arrangements:1. There is no promise that those arrangements will not change in the future.
2. Those arrangements may be different to those in the original contract
I can't see what the concern or problem is here?
It is commonplace for terms of employment to move away from signed contracts over time. The obvious example is when an employee receives a pay rise. Why would she need to go to a tribunal to establish a fact that has already been stated in writing?
Edit, just realised why you are asking.
1. So long as the letter was correct at the time, then it is simply the starting point for any discussions between this lady and the employer. Their ability to vary overtime or make her redundant will be governed by the original contract and employment law. I would expect they are within their rights to do this.
2. Alleging mortgage fraud as an argument against changes to terms of employment is a really bad idea.
Edited by Elysium on Thursday 11th May 07:44
This is the relevant section from the employment contract.
“You are employed in a part time position and your base hours will be X hours each week. The actual hours worked in any specific week may be above or below base hours and the day(s) and/or time(s) of day that these hours are worked can vary. It is a requirement of your employment that you should be available to work a reasonable number of extra hours when required. The Company reserves the right to reduce the hours worked and paid below base hours.”
It would seem to me there is ample scope there, for the company to say they don’t agree this letter to this employee for her mortgage application is a change to her contract terms, or they can just go and change them anyway, as the above says they can. At a meeting (from which this employee was absent), a representative from HR insisted it was just for the purpose of enabling this employee to obtain a mortgage. I’m not sure about the mortgage aspects though. It’s purpose I would assume is to reassure the mortgage company that this employees future salary income will be sufficient to enable her to meet the mortgage requirements re the ability to pay. Now, looking at her contract, it’s seems that is not the case. I’m surprised the mortgage company didn’t realise that employee contract terms can be changed at will by the employer, especially as this is an hour paid position, with a specified base hour, plus o/t at the companies discretion, not a fixed salary, which is a bit more secure.
“You are employed in a part time position and your base hours will be X hours each week. The actual hours worked in any specific week may be above or below base hours and the day(s) and/or time(s) of day that these hours are worked can vary. It is a requirement of your employment that you should be available to work a reasonable number of extra hours when required. The Company reserves the right to reduce the hours worked and paid below base hours.”
It would seem to me there is ample scope there, for the company to say they don’t agree this letter to this employee for her mortgage application is a change to her contract terms, or they can just go and change them anyway, as the above says they can. At a meeting (from which this employee was absent), a representative from HR insisted it was just for the purpose of enabling this employee to obtain a mortgage. I’m not sure about the mortgage aspects though. It’s purpose I would assume is to reassure the mortgage company that this employees future salary income will be sufficient to enable her to meet the mortgage requirements re the ability to pay. Now, looking at her contract, it’s seems that is not the case. I’m surprised the mortgage company didn’t realise that employee contract terms can be changed at will by the employer, especially as this is an hour paid position, with a specified base hour, plus o/t at the companies discretion, not a fixed salary, which is a bit more secure.
The reason this has arisen as an ‘issue, is that the employer has reduced the o/t hours available, but this employee thinks their letter enables them to still receive the o/t they have been working in the past, thus greatly exceeding all the other employees o/t. And of course, they’re not a happy crowd now.
robinessex said:
The reason this has arisen as an ‘issue, is that the employer has reduced the o/t hours available, but this employee thinks their letter enables them to still receive the o/t they have been working in the past, thus greatly exceeding all the other employees o/t. And of course, they’re not a happy crowd now.
Is the overtime paid at an enhanced overtime rate?If so, offer the same number of hours on a new contract, but call it 'normal hours' and pay the 'normal' hourly rate!
mmm-five said:
robinessex said:
The reason this has arisen as an ‘issue, is that the employer has reduced the o/t hours available, but this employee thinks their letter enables them to still receive the o/t they have been working in the past, thus greatly exceeding all the other employees o/t. And of course, they’re not a happy crowd now.
Is the overtime paid at an enhanced overtime rate?If so, offer the same number of hours on a new contract, but call it 'normal hours' and pay the 'normal' hourly rate!
A mortgage letter is a point in time position allowing the bank to make a judgement on their lending, would be using this letter if the application was unsuccessful?
Employment law is governed around her contract and the stipulations of the law in the U.K. (Which any modern day contact reflects).
I'd personally let her go to a tribuneral just to let he rest rinsed and thrown out the door (if it even got that far).
Is she seeking legal advice too?
Employment law is governed around her contract and the stipulations of the law in the U.K. (Which any modern day contact reflects).
I'd personally let her go to a tribuneral just to let he rest rinsed and thrown out the door (if it even got that far).
Is she seeking legal advice too?
Edited by vincenz on Thursday 11th May 17:22
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