Released - Later Asked to Sign for Company

[oilydan]

Interesting errr...hypothetical situation. Employee was released early in Feb - nothing to do with Covid. As part of the redundancy package they were asked to sign an agreement with non-compete, non-solicit etc. Part of this was that they were forbidden to act on behalf of the company in front of 3rd parties. All fair enough as this was a senior VP position.

3 months later and the employee (Ex) is repatriated from the Middle East back to the UK.

Earlier this week they received a message from the company lawyer in the Middle East asking them to sign a tax return as they are the only signatory for that company entity.

They informed the company of their own agreement document, and that this would breach it. A full waiver of the agreement and remuneration for signing was suggested to the company.

The company have started to organize a 'partial' waiver and have asked how much the ex-employee would charge.

How much would be usual for signing 5 documents to get the company out of a pickle? Bear in mind that the fine for not submitting signed documents is between $250 and $5000, according to the internets. Also, the ex-employee thinks the CEO is an utter end of a bell, if that makes a difference to the price...

[Jasandjules]

Does said hypothetical employee want to work for a company in breach of the remaining restrictive covenants?

[QuartzDad]

Wonder what the fine is if the documents are signed by someone who is not employed by the relevant entity? And what the potential personal liability could be for that someone?

Hypothetically I think I'd want the employer to pay in advance for a top-notch local legal representative of my choosing before I signed anything. That way my random four-digit number and treble it advisory fee is going to be chicken feed compared to the legal costs.

[MaxFromage]

QuartzDad said:

Wonder what the fine is if the documents are signed by someone who is not employed by the relevant entity? And what the potential personal liability could be for that someone?

Hypothetically I think I'd want the employer to pay in advance for a top-notch local legal representative of my choosing before I signed anything. That way my random four-digit number and treble it advisory fee is going to be chicken feed compared to the legal costs.

Indeed. I can only relate this is to the UK, but under no circumstances would I recommend anyone signs a tax return where they are no longer an employee/director. There could be anything lurking in the document.

In the UK any director, secretary or employed accountant could sign the return. Surely there must be someone else, or have they left without someone adding a replacement?
Why can't the company get the ex employee to add another director/signatory instead? Less risk but would still need to follow the points below.
Can the tax return can be sent electronically?

Off the top of my head they'd need:

- The company to pay for an independent lawyer and accountant to advise on signing the return/breaching agreement
- Liability waiver for multiple issues
- Insurance policy to mimic 'Director liability' normally covered by the company insurance policy
- Say the equivalent of 1-2 month's salary as a fee to cover all the above admin.

Still wouldn't advise it though.

[JackCT]

It might be worth checking the post departure clauses once more in their employment contract. As an example, a contract from a position I just left had coverage for exactly this, allowing the company to appoint someone to sign on my behalf for documents previously only authorised by myself.

As above though, regardless of the fee I wouldnt touch it with a bargepole, especially if there isn't the most stable of relationships with the ex gaffer.

[oilydan]

Thanks for the responses.

The Director's Indemnity Insurance was their biggest concern, especially as the entity they would be signing for is under litigation.

I think I'm with the majority here, and that signing for the sake of $2k would leave the ex-employee legally, and possibly financially, exposed. Barge pole it is then.