"You cannot start your own business when you leave us"
Discussion
Asking for a Gas engineer friend of mine who doesn't use internet forums!
My friend is an extremely competent gas engineer and plumber of 10 years experience.
Currently he works for a chap who employs him and 2 other people in a small local plumbing/gas engineer type business. Installing central heating systems, repairing and installing boilers, plumbing work etc.
My friend has become very popular with the customers and always does a good job, and it's got to the point that customers often ring the office and actually ask to speak to him first if he's there rather than the boss, who is quite frankly, a grumpy unhelpful w
ker.
Customers have said to my friend he should start up on his own, and they would happily use him.
Somehow, the boss has caught a slight whiff of this, and without saying anything, has produced some employment contracts for his 3 employees to sign which include clauses such as "you cannot start a business that has anything to do with gas or plumbing for a minimum of 5 years of leaving the company and if you do it must be at least 50 miles away" etc.
My mate has worked there 6 years and never had any kind of employment contract whatsoever. It has just been a verbal agreement on hours and pay and that's it, same for the other 2 employees.
He isn't ready to start his own business right now, but will be ready in about 6-12 months, and obviously he doesn't want to sign the new contract which he feels is unfair.
How does he stand with all this legally? Can he refuse to sign the new contact and carry on as he is?
My friend is an extremely competent gas engineer and plumber of 10 years experience.
Currently he works for a chap who employs him and 2 other people in a small local plumbing/gas engineer type business. Installing central heating systems, repairing and installing boilers, plumbing work etc.
My friend has become very popular with the customers and always does a good job, and it's got to the point that customers often ring the office and actually ask to speak to him first if he's there rather than the boss, who is quite frankly, a grumpy unhelpful w
ker.Customers have said to my friend he should start up on his own, and they would happily use him.
Somehow, the boss has caught a slight whiff of this, and without saying anything, has produced some employment contracts for his 3 employees to sign which include clauses such as "you cannot start a business that has anything to do with gas or plumbing for a minimum of 5 years of leaving the company and if you do it must be at least 50 miles away" etc.
My mate has worked there 6 years and never had any kind of employment contract whatsoever. It has just been a verbal agreement on hours and pay and that's it, same for the other 2 employees.
He isn't ready to start his own business right now, but will be ready in about 6-12 months, and obviously he doesn't want to sign the new contract which he feels is unfair.
How does he stand with all this legally? Can he refuse to sign the new contact and carry on as he is?
If it is over 6 months - it will be unenforceable.
If your friend has some very special skills - e.g. - Was the lead R&D researcher for Graphine Nanoribbons and had access to 5 years of top secret R&D information - then that period could be extended to much longer in that area.
But as a gas fitter - Meh..... 10 a penny.
Just don't sign it anyway.
If your friend has some very special skills - e.g. - Was the lead R&D researcher for Graphine Nanoribbons and had access to 5 years of top secret R&D information - then that period could be extended to much longer in that area.
But as a gas fitter - Meh..... 10 a penny.
Just don't sign it anyway.
CAFEDEAD said:
HoHoHo said:
You are correct that a 5 year clause is unenforceable however if you are presented with a contract and refuse to sign it after a fairly short period of time it is assumed in law you accept it anyway.
Erm, what?! That's a terrifying notion isn't it?We recently updated contracts for our employees and our advisors made us aware of this little nugget!
glasgowrob said:
Simple solution
His wife/significant other starts a business and employs him
Just a paper excercise if need be
Mary smith could quite easily register a business called joe smith plumbing and gas if need be
Although I would imagine that contract would be deemed unfair
Nope.His wife/significant other starts a business and employs him
Just a paper excercise if need be
Mary smith could quite easily register a business called joe smith plumbing and gas if need be
Although I would imagine that contract would be deemed unfair
His ex-employer could try and stop him even if he works for his wife or whoever.
Unfortunately the law is by no means black and white under these circumstances. 6 months is deemed as the norm but I've seen and had experience of a year and all within a certain radius - however a man has a right to earn money.
Some years ago we had an employee decide to leave and take a few major accounts and work for a a competitor. Now I understand this is going to happen to all employers at some time or other but we decided to take legal action and in our case we managed to secure a year free of contact as per his contract. We didn't get to court so I can't vouch for a definitive court ruling in our case however we both had legal advice and he was told by his solicitors to back off.
At the end of the day it depends if his current employer has either the determination or funds/means to take action if and when he leaves.
Jasandjules said:
CAFEDEAD said:
Erm, what?! That's a terrifying notion isn't it?
Well if you continue to work for the firm without complaint.You can put in writing that you are content to continue to work for the firm based upon your previous terms and conditions....
As I understand it providing the change in your new terms aren't unreasonable your old cease to be.
As mentioned we recently changed HR providers and had revised and more complete contracts produced and this very topic was discussed just in case.
There are a series of letters that follow new contracts being given to employees at various timescales ending in 'well, it is now assumed....etc.'
HoHoHo said:
I'm not sure that's the case.
As I understand it providing the change in your new terms aren't unreasonable your old cease to be.
As mentioned we recently changed HR providers and had revised and more complete contracts produced and this very topic was discussed just in case.
There are a series of letters that follow new contracts being given to employees at various timescales ending in 'well, it is now assumed....etc.'
However, in this case the terms are quite clearly unreasonable. To prevent someone from performing their specialised trade for 5 years within 50 miles is bonkers. No judge would consider that a reasonable term. As I understand it providing the change in your new terms aren't unreasonable your old cease to be.
As mentioned we recently changed HR providers and had revised and more complete contracts produced and this very topic was discussed just in case.
There are a series of letters that follow new contracts being given to employees at various timescales ending in 'well, it is now assumed....etc.'
I agree on the assumed acceptance - we have used that in the past and it does make sense. If a company presents you with a new contract, and you decline to sign but are happy to continue working in the environment, then unless the contract has some significant or unreasonable changes it should be assumed you're happy with the company and the contract.
menguin said:
HoHoHo said:
I'm not sure that's the case.
As I understand it providing the change in your new terms aren't unreasonable your old cease to be.
As mentioned we recently changed HR providers and had revised and more complete contracts produced and this very topic was discussed just in case.
There are a series of letters that follow new contracts being given to employees at various timescales ending in 'well, it is now assumed....etc.'
However, in this case the terms are quite clearly unreasonable. To prevent someone from performing their specialised trade for 5 years within 50 miles is bonkers. No judge would consider that a reasonable term. As I understand it providing the change in your new terms aren't unreasonable your old cease to be.
As mentioned we recently changed HR providers and had revised and more complete contracts produced and this very topic was discussed just in case.
There are a series of letters that follow new contracts being given to employees at various timescales ending in 'well, it is now assumed....etc.'
I agree on the assumed acceptance - we have used that in the past and it does make sense. If a company presents you with a new contract, and you decline to sign but are happy to continue working in the environment, then unless the contract has some significant or unreasonable changes it should be assumed you're happy with the company and the contract.
HoHoHo said:
You are correct that a 5 year clause is unenforceable however if you are presented with a contract and refuse to sign it after a fairly short period of time it is assumed in law you accept it anyway.
But the 5 year clause is bks.
But the 5 year clause is b
ks.So what would the outcome be if indeed he did not sign the revised contract and then started up his own business? What is the ex-employer suggesting he will do?
Sounds to me the bloke doesnt deserve to have decent staff and if your mate is as good as you say, he should start getting business cards out and give them to customers! Let the guy sack him, then the contract cant be enforced?
Sounds to me the bloke doesnt deserve to have decent staff and if your mate is as good as you say, he should start getting business cards out and give them to customers! Let the guy sack him, then the contract cant be enforced?
MEC said:
so if a new contract is presented and you do not agree what are your options?
Just to clarify as I understand the situationIf you present a new contract to an existing employee which is essentially the same as last with minor tweaks that are would not be deemed unreasonable and the employee doesn't say anything and doesn't sign it then given a period of time it is accepted as agreed anyway - much as if you for example you employ a new person, don't provide them a contract (but have them), again given time it's accepted the 'not seen' contract can be enforced.
If the terms change detrimentally (i.e the 5 year clause for example) and that is discussed between the employee and employer and there is stalemate the opinion here is old terms would still be in force. If the employer insists the new contract is the only way forward then legal advice needs to be sought by the employee and it could 'possibly' be constructive dismissal.
If I were offering advice here I would suggest the employee does exactly that, talk to his employer and express the change is unfair and unreasonable and then bearing in mind he is looking to go alone take professional advice (not free from either PH or CAB!). He could well start his own company and have a small pot of cash to help him start.
I've got three grown up children and hearing various stories it always makes me shudder how some employers treat their staff and get away with it simply because employees are too frightened or timid to say no. Bullying is a word that springs to mind.
HoHoHo said:
Just to clarify as I understand the situation
If you present a new contract to an existing employee which is essentially the same as last with minor tweaks that are would not be deemed unreasonable and the employee doesn't say anything and doesn't sign it then given a period of time it is accepted as agreed anyway - much as if you for example you employ a new person, don't provide them a contract (but have them), again given time it's accepted the 'not seen' contract can be enforced.
If the terms change detrimentally (i.e the 5 year clause for example) and that is discussed between the employee and employer and there is stalemate the opinion here is old terms would still be in force. If the employer insists the new contract is the only way forward then legal advice needs to be sought by the employee and it could 'possibly' be constructive dismissal.
If I were offering advice here I would suggest the employee does exactly that, talk to his employer and express the change is unfair and unreasonable and then bearing in mind he is looking to go alone take professional advice (not free from either PH or CAB!). He could well start his own company and have a small pot of cash to help him start.
I've got three grown up children and hearing various stories it always makes me shudder how some employers treat their staff and get away with it simply because employees are too frightened or timid to say no. Bullying is a word that springs to mind.
Thanks for that post, very interesting.If you present a new contract to an existing employee which is essentially the same as last with minor tweaks that are would not be deemed unreasonable and the employee doesn't say anything and doesn't sign it then given a period of time it is accepted as agreed anyway - much as if you for example you employ a new person, don't provide them a contract (but have them), again given time it's accepted the 'not seen' contract can be enforced.
If the terms change detrimentally (i.e the 5 year clause for example) and that is discussed between the employee and employer and there is stalemate the opinion here is old terms would still be in force. If the employer insists the new contract is the only way forward then legal advice needs to be sought by the employee and it could 'possibly' be constructive dismissal.
If I were offering advice here I would suggest the employee does exactly that, talk to his employer and express the change is unfair and unreasonable and then bearing in mind he is looking to go alone take professional advice (not free from either PH or CAB!). He could well start his own company and have a small pot of cash to help him start.
I've got three grown up children and hearing various stories it always makes me shudder how some employers treat their staff and get away with it simply because employees are too frightened or timid to say no. Bullying is a word that springs to mind.
Thanks to everyone else in the thread as well, some good points.
Du1point8 said:
Not to sound harsh but why can't he borrow the money needed and set up by himself?
He's already being asked for in person for several jobs, so he could leverage that against the loan.
Why 6-12 months and not now?
Borrow off friends and family if not the banks.
I'm not 100% sure but I think it's because he is looking to buy a house very shortly and naturally he is concerned about proving his income or having to declare that he is self employed or a new business, for the purposes of a mortgage.He's already being asked for in person for several jobs, so he could leverage that against the loan.
Why 6-12 months and not now?
Borrow off friends and family if not the banks.
I have no doubt he would be ok on his own as any self employed decent gas engineer seems to be earning really quite decent money, but the mortgage is his concern.
Obviously once he gets a mortgage he can do what he likes and the mortgage provider won't care as long as the money for him and his wife keeps coming in.
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