Concerned of redundancy if acquiring other company (as a Director)

[jalucia]

I am a UK Director on Companies House and run the market. Also a shareholder but it is not my company. We are a global business. We will buy a company soon which I am supporting with the process. The intention is to run the businesses more or less separate until after the earn out and then more formally integrate, so this may be a few years.

However, there is rarely trust in business so I'd like to prepare and know my play should a day come where I need to act.

My concern is 'could it be as simple as just making me redundant like I've done to others, and giving statutory pay' given my tenure is under 5 years so not substantial. I am a high earner and my ultimate aim in leaving a business would be to receive a substantial pay out. Its feasible the company would do this but legally what rights or not do I have?

I do not feel yet like I will be pushed, and maybe never, but if I am, I don't want to leave with nothing if legally there is little for me to gain. I'd prefer to find another role if I'm unable to part with a substantial pay out to part ways.

Any advice on tactics or other to be prepared and fend for myself so that I get the most out of it even if it means holding the company liable for x or y - your help is very much appreciated!

 

[DontAsk]

Are you actually an employee? In which business?

 

[jalucia]

Yes I am an employee in the acquiring company. I run it.

 

[Newchodge]

I am a UK Director on Companies House and run the market. Also a shareholder but it is not my company. We are a global business. We will buy a company soon which I am supporting with the process. The intention is to run the businesses more or less separate until after the earn out and then more formally integrate, so this may be a few years.

However, there is rarely trust in business so I'd like to prepare and know my play should a day come where I need to act.

My concern is 'could it be as simple as just making me redundant like I've done to others, and giving statutory pay' given my tenure is under 5 years so not substantial. I am a high earner and my ultimate aim in leaving a business would be to receive a substantial pay out. Its feasible the company would do this but legally what rights or not do I have?

I do not feel yet like I will be pushed, and maybe never, but if I am, I don't want to leave with nothing if legally there is little for me to gain. I'd prefer to find another role if I'm unable to part with a substantial pay out to part ways.

Any advice on tactics or other to be prepared and fend for myself so that I get the most out of it even if it means holding the company liable for x or y - your help is very much appreciated!

You have statutory rights or the rights written in your contract if they are better. Statutory redundancy for a high earner is poor.

 

[Clinton]

I am a UK Director on Companies House and run the market. Also a shareholder but it is not my company. We are a global business. We will buy a company soon which I am supporting with the process. The intention is to run the businesses more or less separate until after the earn out and then more formally integrate, so this may be a few years.

However, there is rarely trust in business so I'd like to prepare and know my play should a day come where I need to act.

My concern is 'could it be as simple as just making me redundant like I've done to others, and giving statutory pay' given my tenure is under 5 years so not substantial. I am a high earner and my ultimate aim in leaving a business would be to receive a substantial pay out. Its feasible the company would do this but legally what rights or not do I have?

I do not feel yet like I will be pushed, and maybe never, but if I am, I don't want to leave with nothing if legally there is little for me to gain. I'd prefer to find another role if I'm unable to part with a substantial pay out to part ways.

Any advice on tactics or other to be prepared and fend for myself so that I get the most out of it even if it means holding the company liable for x or y - your help is very much appreciated!

I've no idea what you're on about!

>> and run the market.
What market?!

>>We will buy a company soon which I am supporting with the process.
So? That's your job, right? You're a director and the company in which you're a director is using company money to make an acquisition?

When the company wants to get rid of you, they get rid of you as per the employment laws at that time. What the hell are you trying to protect? What the hell does any of this have to do with the acquisition?

If your ability to explain yourself is on par with your ability at acquisitions, I fear this acquisition isn't going to go well.

 

[jalucia]

You have statutory rights or the rights written in your contract if they are better. Statutory redundancy for a high earner is poor.

I've no idea what you're on about!

>> and run the market.
What market?!

>>We will buy a company soon which I am supporting with the process.
So? That's your job, right? You're a director and the company in which you're a director is using company money to make an acquisition?

When the company wants to get rid of you, they get rid of you as per the employment laws at that time. What the hell are you trying to protect? What the hell does any of this have to do with the acquisition?

If your ability to explain yourself is on par with your ability at acquisitions, I fear this acquisition isn't going to go well.

that's good feedback Clinton. Your winning personality I'm sure endears you to others and what a great pink bow tie you have. Love your look.

 

[fisicx]

that's good feedback Clinton. Your winning personality I'm sure endears you to others and what a great pink bow tie you have. Love your look.

Like Clinton, I also found your post very confusing. It’s not at all clear what you are asking (or even if you are employed by the company)

 

[DontAsk]

I do not feel yet like I will be pushed, and maybe never, but if I am, I don't want to leave with nothing if legally there is little for me to gain.

You will leave with the minimum they can legally pay you, unless you can negotiate a better employment contract NOW.

I'd prefer to find another role if I'm unable to part with a substantial pay out to part ways.

Time to start looking.

Any advice on tactics or other to be prepared and fend for myself so that I get the most out of it even if it means holding the company liable for x or y - your help is very much appreciated!

Liable for what, exactly?

 

[jalucia]

Like Clinton, I also found your post very confusing. It’s not at all clear what you are asking (or even if you are employed by the company)

Its a fair comment. Yes I am an employee but run the organisation. I'll speak to someone in person, it will be easier to discuss than online . In layman's terms its a case of how do you not get screw&d in a situation where two companies form but redundancy may be used as the out to exit someone when it's anything but.. We do it, I've seen it my whole career and can't with complete confidence assume it wouldn't happen to me. I have similarly seen many employees at the senior level create real issues for the employers and ultimately leave with what they want, a sizeable pay out. Appreciate the time to review the post even if confusing. A conversation better had in person.

 

[fisicx]

In M&A the redundancy payment is the minimum they can get away with. The good news is you get to keep your shares and remain as a director.

 

[Paul Kelly ICHYB]

You are a director and shareholder - you should know (and be involved in?) changes like your own redundancy.

Have you tried speaking to the main shareholder/person actually pulling the strings.

It may also be worthwhile understanding what your duties and obligations are as a director, as you seem in the dark a bit which means others can take advantage of you at your cost.

 

[Porky]

@Jaluthe the points that @Clinton makes whilst not sugar coated as you would prefer are bang on the money/ on point.

You make no reference to how much of the business you own (percentage of share ownership) or indeed what any shareholders agreement might be in place so we can only assume you are a minor interest and have zero voting control?

Clearly you concern that you could be made redundant, As you have done to others on acquisitions (is KARMA in play?) But as Cindy @Newchodge has already stated the statutory pay off would be fairly derisory. Five years service is what? five weeks money or something like that?

So, In short you have by the sound of it FA protections - not sure what reply you want to read, but if you have no control whoever does have control to a certain extent can do whatever they like with the business and with you as an employee.

In today's age, some in business are incredibly ruthless, I detest it but it's how it is now and my best guess is that you are most likely being lined up to be shafted. The nievety of your post indicates same. Sorry my reply is not sugar coated either.

Pork's

 

[UK Contractor Accountant]

in a nutshell - the Directors run the company for the shareholders. If the majority shareholders (50%) want you out as a Director your out.

Your employment rights remain when removed as a Director as well as your shareholding. You can, of course, be made redundant at some stage or dismissed for misconduct etc. Your employment contract should contain all the details you need

 

[Mark T Jones]

I'll agree with others - you're not presenting yourself as a key figure here, which may be the problem - ie you're approaching your role in the manner of a disgruntled employee, not a shareholder/director.

Do you have:

1. A shareholder agreement?
2. A director service contract?
3. A contract of employment

There is nothing you can do to stop them making you redundant (within the legal process), but the best way to avoid it is to be valuable.

What conversations have taken place?

 

[fisicx]

I’m not sure @jalucia understands the difference between being a director, shareholder and employee. There are independent of each other and have different sets of rules.