Contract of Employment

[Sunshire]

Hi

 

I have been given a new contract to sign and I am unclear as to whether I should sign it in its current form. I understand from the CAB website that my statutory rights override anything 'lesser' even if I sign it (ie I can't waive my rights to what I'm legally entitled to, contact or not) but I would appreciate clarification on a couple of issues if anyone is able to help please?

 

Firstly, I get paid monthly but my contract states my notice period should be one week for every year I have worked at the company, therefore currently 10 weeks. Is this enforceable because in my line of work, which is a manual job, I don't know of any employer who would wait around that long if I were to receive another job offer. Can I refuse this because it exceeds the statutory minimum notice period?

 

Secondly, the contract states the firm does not operate a pension scheme. I'm not sure why this is included as when it becomes a statutory requirement for the firm, surely this will nullify this part of the contract? It is a small company with less than 10 employees but I understand every company will get a staging date at some point. My question is does signing the contract now affect any future workplace pension rights, specifically I would not want my signing it to be taken as me 'opting out' of a future pension scheme in advance. Should this be made clear in the text? Also, how do I find out when the staging date is?

 

Lastly, and the most pressing point, a 'non-compete' clause has been included in the contract. This states that I will not work for another xxx company after my contract has ceased. I'm not a salesperson with sensitive knowledge about customers/suppliers - I do a manual job. I therefore think the clause completely prejudices my ability to use my trade should I leave (or get sacked from) the company, even if I leave the area. I know why this has been included - other employees have left to go to a local competitor however I feel if more effort was placed on treating the employees right, and less on tying them into unreasonable contracts, people would stay! Obviously this clause is blatantly intended to prevent me from going to a specific firm down the road and I think its unreasonable. It's like telling a decorator he can't paint for a year after he leaves this employment. My trade is my livelihood.

 

Many thanks for reading this post - any help on any of the points would be appreciated. I have to hand the contract back in tomorrow, signed or not!

[Sidewinder]

Hi

 

I get paid monthly but my contract states my notice period should be one week for every year I have worked at the company, therefore currently 10 weeks. Is this enforceable because in my line of work, which is a manual job, I don't know of any employer who would wait around that long if I were to receive another job offer. Can I refuse this because it exceeds the statutory minimum notice period?

 

It is as enforceable, but only up to a point - if you were to leave giving the employer the relevant notice then in theory they could sue you for breach of contract - however the claim would be limited only to the direct expenses incurred as a result of the breach. Therefore, if they had to hire a temp, or could prove that your early departure cost productivity then yes they could claim, but this is unlikely. It is often possible to negotiate a shorter notice period should the need arise. The employer MUST however give you the full notice period of up to 12 weeks if they terminate your employment

 

Secondly, the contract states the firm does not operate a pension scheme. I'm not sure why this is included as when it becomes a statutory requirement for the firm, surely this will nullify this part of the contract? It is a small company with less than 10 employees but I understand every company will get a staging date at some point. My question is does signing the contract now affect any future workplace pension rights, specifically I would not want my signing it to be taken as me 'opting out' of a future pension scheme in advance. Should this be made clear in the text? Also, how do I find out when the staging date is?

 

Signing the contract would not and could not be deemed as opting out - this requires a a very specific process. Strange that such a clause should be included when there will be a statutory obligation for a pension scheme to be provided! As and when the precise terms of the pension are notified is the time when you are given an opt out.

 

Lastly, and the most pressing point, a 'non-compete' clause has been included in the contract. This states that I will not work for another xxx company after my contract has ceased. I'm not a salesperson with sensitive knowledge about customers/suppliers - I do a manual job. I therefore think the clause completely prejudices my ability to use my trade should I leave (or get sacked from) the company, even if I leave the area. I know why this has been included - other employees have left to go to a local competitor however I feel if more effort was placed on treating the employees right, and less on tying them into unreasonable contracts, people would stay! Obviously this clause is blatantly intended to prevent me from going to a specific firm down the road and I think its unreasonable. It's like telling a decorator he can't paint for a year after he leaves this employment. My trade is my livelihood.

 

Non compete clauses (as with the notice period) are enforceable, but rarely would the employer go to the trouble. For starters, generally speaking they would only be held to be enforceable if they go no further than to protect a specific area of the business and are no more draconian than is necessary to do this. If you were privy to confidential product development information or a pricing strategy for example, then it may be reasonable to bind you to a limited period of restraint in order to protect a product launch or to change passwords, strategy or to minimise any effect that might result from you taking your knowledge elsewhere. The geographical area in which the restriction applies should also be reasonable and should only be sufficient to serve the purpose. Any clause which seeks to restrict you from working 'anywhere' or for 'any competitor' or for 'ever' would almost certainly be completely unenforceable. It is all about what you know and what damage that information might cause rather than being a clause which is designed solely to prevent you working in your chosen field. It would be more reasonable for such a clause to be in the contract of a senior manager with access to company secrets than it would be for a worker on the shop floor.

 

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[Sunshire]

Thank you for your detailed reply Sidewinder. It is much appreciated.

 

I agree, the Pension clauses are pointless given that the employer will have a statutory right to offer a workplace pension at some point.

 

Re the non-compete clause - It would be more reasonable for such a clause to be in the contract of a senior manager with access to company secrets than it would be for a worker on the shop floor - my point precisely. But this isn't about industrial espionage, or even me particularly, just getting one over on the competitor down the road. I can see no reason why it is in my contract. It's like the NHS training doctors and making them sign contracts to say they won't go and work in Australia. It places an unreasonable restriction on a person long after they have left the employment.

[Emmzzi]

If you do something like drive or work in the warehouse, that non compete clause is most likely going to be unenforceable. It's your decision but I'd sign for a quiet life on that basis.

 

re: 10 weeks notice - remember if they do redundancies later tey also have to give YOU 10 weeks notice - which I have known to be handy. I awayslike a nice safety buffer of a long notice period!

[Sidewinder]

I am with Emmzzi - I would probably sign knowing that the contentious bits are not likely to be a major problem later on. The alternative is to argue those points and risk the change being enforced anyway! The notice issue does work both ways of course and is far more onerous on the employer than the employee

 

If there is a Union and you are a member it may be worth getting some clarification collectively through them?

 

Non compete clauses are not supposed to be there just to stop people going to work for a competitor - they must serve a genuine purpose in protecting legitimate business interests.