A contract that hasn't been signed

[Gavin Harris]

Hi,

A situation that has arisen:

A girl working in a small business has never had a written contract with them before. She's been working there for a few years now, and the business has just been bought out.

The new owners have wisely decided to introduce written contracts outlining the terms of business.

There's a piece in there that says that you can't carry out this trade outside of this business, however, this girl has done so for a few years, so she asked for that piece to be ammended for her to be to afford to carry on working there.

They have said that the contract will stay as it is.

Now, she hasn't signed the contract yet, but she has received a letter saying that..."it doesn't make any difference whether they are signed or not, you have been given them and they are your working contracts. All conditions apply from when you were given them without exception."

Is that the case? Surely they can't enforce a contract to which the other party hasn't agreed to? If they want to keep this clause in about "carrying out the trade outside of work" then this girl will leave, as she can earn more money self-employed - but can they then enforce this contract? There's also a clause saying that they will recover costs on any training given to them if they leave the business, of which she this week has been on a days training.

Any advice would be gratefully received!

 

[INDIZINE]

They do not have to be signed, it is correct that once they have been issued that is it. As long as the changes are reasonable - not to moonlight on the job is a reasonable request and one I would imagine would stand up in court.

Ref the training, that must be in the contract though according to CIPD, should be in a separate contract to the employment contract to be clearly enforceable. It must also be a reasonable amount and if the business loses considerably because she leaves after the training, this is what they must prove in court - that indeed this has put them out of pocket by a measurable amount and not had time to benefit from the training themselves for any period of time. A days training seems unsufficient on these grounds.

The contract must also state that they can claw back this money (if allowable) from her final salary otherwise if it doesnt they cannot legally reclaim a bean.

You dont say what type of work it is, but it is common for employers to put this clause into the employment contract on many types of employment, so that there is not a conflict of interest, encroaching on their potential patch, company policy, to name a few.

 

[Gavin Harris]

It's hairdressing.

I understand that it's common for employers to include this clause, but previously it wasn't a problem. It's only since the new owners have come in, they have introduced this contract. My girlfriend said to them she does not agree to the contract, so it seems unfair that they can introduce and enforce a contract that she says she doesn't agree to?

Basically she works 4 days at the salon (full time) and spends the other 2 days of the week doing "home hair". She does not, and has never solicited business from within the salon - most of her clients are word of mouth from friends and family etc. She needs to continue doing this to afford to live, but the new contract is saying she can't carry out any other paid for hairdressing work.

 

[INDIZINE]

As she was never issued with an employment contract which legally she should have been, there isnt one to be changed. However a new employer can make changes after they take over.
Employment contracts only have to be issued by law, not signed. If she contravenes and is found out she can be up for disciplinary if they care to take that route. Non acceptance can be deamed to be in breach of the contract and nothing to me seems unreasonable in request.

Id suggest she takes this as a sign of the changes to come and take it on board or move one.

 

seems to me the new owner could offer her redundency ,but not change an established work pattern .without re employing her.

I take it her employment was just continued after the takeover.

Best get a legal eagle .The law and I have never seen eye to eye.

Earl

 

[Paul Kelly ICHYB]

Needs legal clarification, but I thought that after a takeover, a new contract cannot be forced on an employee, unless their job vhanges, then redundancy rules cut in. If there was no contract in the first place, things are more tricky!

 

[Tungstone]

Needs legal clarification, but I thought that after a takeover, a new contract cannot be forced on an employee, unless their job vhanges, then redundancy rules cut in. If there was no contract in the first place, things are more tricky!

Contract may not have been signed, but is still a contract and enforceable
The terms cannot be varied.
TUPE kicks in.

 

[Gavin Harris]

I had never heard of TUPE - but looking at it brings up a couple of questions:

The new employer may not unless the contract of employment so provides unilaterally worsen the terms and conditions of employment of any transferred employee.

Transferred employees who find that there has been a fundamental change for the worse in their terms and conditions of employment as a result of the transfer generally have the right to terminate their contract and claim unfair dismissal before an employment tribunal, on the grounds that actions of the employer have forced them to resign. Employees may not make this type of claim solely on the grounds that the identity of their employer has changed unless the circumstances of an individual case change and that change is significant and to the employee's detriment.

From what I can see, the employer is creating a new condition that is forcing the employee to leave. Before, this person was working Mon and Tues for herself cutting hair, and then working Wed to Sat in the salon. Now she is in a situation where she cannot afford to live off just the salary from the salon, and therefore would need to leave.

 

[Tungstone]

TUPE
Transfer of Undertakings Regulations

Protects employees when a company changes hands
The employees are transferred to the new entity on the same terms and conditions as per their previous employment

Employee cannot be dismissed
Certain conditions apply if new employee wishes to dismiss, change in technology requiring fewer employees for instance
In which case, a redundancy situation occurs

 

The employee would have the contract of employment (even if never given) transferred as-was, this would include any aquired rights/working practices.

If the new owner attempts to introduce a written contract that is not reflective of your working practice then this would be a unilateral change and not by agreement, this being the case there could be a situation whereby the employee could resign and claim unfair constructive dismissal.

Of course the new owner may be unaware of exactly what your previous working practices were, so common sense should prevail and you should be talking with them to reach proper and acceptable terms if a written contract is being drawn up, on the other hand they may be attempting to simply trample over employees to enforce the new regime and how they wish to run the business.

I would suggest it may be better to raise a grievance (this way there is evidence that you have tried to act reasonably) instead of simply resign/make claim.
At the grievance state clearly what your working practices were, and that their attempt to unilaterally change these would amount to a situation whereby you may have no alternative other than to resign and make a claim at tribunal.

If nothing was done it would be considered that you have accepted the change and the contract would stand.

Only the affected employee would know what is the best route. ie: what would happen if the employee did leave, would there be other work in the area?
A call to ACAS would be beneficial to reassure the person of their rights 08457 474747 also they may wish to look into any insurance policies they have to see if they have cover for legal costs in disputes.

 

[Gavin Harris]

Of course the new owner may be unaware of exactly what your previous working practices were, so common sense should prevail and you should be talking with them to reach proper and acceptable terms if a written contract is being drawn up, on the other hand they may be attempting to simply trample over employees to enforce the new regime and how they wish to run the business.

I would suggest it may be better to raise a grievance (this way there is evidence that you have tried to act reasonably) instead of simply resign/make claim.
At the grievance state clearly what your working practices were, and that their attempt to unilaterally change these would amount to a situation whereby you may have no alternative other than to resign and make a claim at tribunal.

As soon as she received this new contract she brought it up with them that she has previously been allowed to have "home hair" clients on her days off. Although there was no previous signed contract, it was an accepted practise within that salon (albeit not something that is normally allowed in the industry). Their response to this was this letter, saying that they can't do home hair and that all conditions apply regardless. She is going in today to explain that she simply can't live off just the hairdressing salary (hairdressers are very badly paid), and that she either needs to a: receive a pay increase to allow her to continue working at the salon under the new contract, or b: for their to be an ammendment made to her contract allowing her to carry out home hair on her days off. She has no issue with the clauses about not soliciting work from exisiting clients at the salon - that is not her intentions at all.

Only the affected employee would know what is the best route. ie: what would happen if the employee did leave, would there be other work in the area?

There's always work available for hairdressers - either in a salon or doing home hair. Fortunately, she's at the point now where she's quite busy on her days off with home hair, so the transition to self employment would be quite smooth.

There's a clause in the new contract about not having your name or photo appear in any form of media in connection with your new business for 6 months. If she were to leave because she didn't agree to the contract and there was no agreement reached, then would I be right in thinking that the contract therefore wouldn't exist, and there would be nothing stopping her from having a website publicising her home hair (which she already has and her previous employer was aware of).

 

[Gavin Harris]

A call to ACAS would be beneficial to reassure the person of their rights 08457 474747 also they may wish to look into any insurance policies they have to see if they have cover for legal costs in disputes.

Thanks, ACAS have basically said exactly what you said.

Basically, she will have to leave her job if they do decide to impose this new contract on her, which would be unfair dismissal - if we go down the route of taking it further, we will of course seek legal advice.

Thanks for all your help! Contracts always seem to be such a grey area!!

 

[Tungstone]

If nothing was done it would be considered that you have accepted the change and the contract would stand.

If employee does nothing, then the contract is "affirmed" by deemed acceptance

 

possibly deemed to have implicitly accepted it and it would then become incorporated into the contract.

 

[Al Varilone]

Hi

When the salon was taken over the buyer was subject to the "transfer of underakings" regulations as amended. The buyer took over the salon "warts and all" and should have asked to see existing contracts or be advised if these did not exist and modify his purchase price accordingly.
THERE IS NO OBLIGATION TO GIVE ANY EMPLOYEE A CONTRACT simply a statement of the main terms and conditions of employment!!
If there is no restrictive covenant existing the employer should pay hard cash now if he wants to impose one!

regards

al varilone solicitor 01933277666