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Any HR experts about? Or those with more backbone than me?

18 replies

LadyHalesBroach · 28/05/2024 22:19

Bit of context - I work in the creative industry, fairly senior (second to my boss) and responsible for several projects. My boss is a lovely man - we work really well because I bring in the creative side and have done successfully (bringing projects and developing them to fruition) whereas he has the more business/legal side covered.

Now to the problem. The company we work for is being shut down by our European parent company. Boss has suspected it for a while because market is slow. This got confirmed last week. He told me, in confidence, that it’s happening next week when the parent company is flying over to make us all redundant. No one else knows, and parent company doesn’t know I know.

Boss is using this time to set up a new company of his own, and will take me with him. We also plan on taking a couple of projects with us that are ‘live’ and parent co have given blessing for this.

He has acquired some investment to cover a couple of years of overheads.

But he said something that surprised me. I am entitled to three weeks of redundancy lag and 3 months salary (notice period). “So your salary from New Co can kick in from September.”

On one hand, I feel I should be grateful he’s offering me a life raft. On the other hand, I feel like saying - no, that’s my redundancy pay and I’ll say what I do with it. You have your investment to pay for income.

I would prefer to use any months notice pay as ring fenced to protect myself in case this New Co doesn’t work out. I won’t be entitled to anything as it’s starting from the ground up.

But I don’t want to appear ungrateful, rude and grabby.

What should I do?

OP posts:
Fatotter · 28/05/2024 22:22

You are investing in the company. Ask for a share of it if you use your own money to fund your wages.

BirthdayRainbow · 28/05/2024 22:24

So your "lovely" boss wants to use your money to pay you when you start working for him in this new company?🙄

LadyHalesBroach · 28/05/2024 22:25

Oh that’s true. So for argument sake, if he has £200k investment - and my salary is £4k per month (pre tax) x 3 months = £12k = 6%…. Is that how it works?!?! I have no idea!

OP posts:

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Bestyearever2024 · 28/05/2024 22:26

Is he lovely?

Tickletuesday · 28/05/2024 22:28

I don’t think you need a HR expert. You are leaving one job and starting another. Sounds like he needs you so let him know that you are happy to start immediately and be paid, but if he can’t afford you until September you’ll find alternative employment until then. Very cheeky. Don't let him take advantage of you.

titchy · 28/05/2024 22:28

I don't understand - is he asking you to invest in his new startup? The way you've worded it just makes it sound as if he's expecting to offer you a job from September, and suggesting you use your redundancy in the meantime.

Octavia64 · 28/05/2024 22:28

I'm slightly confused.

If you are investing in NewCo then you need to agree what money you are giving him and what shares you will have.

If you are not investing in NewCo then until (and if!) he signs a contract you don't have a job.

These things are often floated and just as often get complicated.

Do you think you are going to make a lot of money from NewCo? Can you ask for some shares instead of part of your salary?

If you think it's going to do really well then I'd ignore and just work on the projects. If you are more concerned then I'd hold out for a contract.

LadyHalesBroach · 28/05/2024 22:29

Honestly he is. He’s a married man (he’s gay so please so suggestion that he’s doing anything untoward in that regard) and he has been so encouraging about my career development and offering as much flexibility as I needed for the kids. I’ve worked with other bosses - male or female - and he’s been the nicest so far.

i just want him to keep his mits off my money. Even if I was to use this money to burn, surely that’s my choice?!

OP posts:
MrsWhites · 28/05/2024 22:30

Well he’s either being a cheeky fucker or he sees this as your investment in the business - if he expects you to invest your time for free instead of a cash investment he still needs to agree a share percentage with you.

Although he’s offering you a life raft, it sounds like your skills are pretty essential to the success of his new business!

BraveFacesEveryone · 28/05/2024 22:30

So is he basically saying you can work for
him for free until September? If you are employed by him you are legally required to have a statement of terms and conditions no later than day one of your employment. It’s slightly different to a contract in that most contracts have more clauses than the statutory that makes up the terms of employment. However, you should be provided with the details of your start date and pay ie salary, frequency, pay date. And pay must comply with national minimum wage as the bare minimum if you are working. So unless you are agreeing to volunteer - and meet the criteria for a volunteer - he would be in breach of legislation.

So yes, your redundancy pay and notice pay are nothing to do with him or this new business and are yours to do with as you wish.

I would also be very very clear about non compete clauses and that permission for you to take clients/work/projects with you is crystal clear, in writing and legally binding, or you may find yourself in a very sticky spot.

LadyHalesBroach · 28/05/2024 22:31

Sorry to clarify - yes I would be working straight away. That much I do know.

My pay from NewCo would start in September, because I have a three month notice period payment. As in, Old Co owe me three months salary but I won’t be working for them, they give it to me in a lump sum.

OP posts:
LadyHalesBroach · 28/05/2024 22:33

Ok the more replies I get the more I see this is quite cheeky.

I don’t have a non compete, and the clause from his non compete is getting removed as part of his redundancy negotiations. Or so I’m told.

I’ll ask for clarity on whether my using my redundancy pay is an investment and on what terms.

OP posts:
BirthdayRainbow · 28/05/2024 22:36

It's only an investment if YOU chose that it is.

titchy · 28/05/2024 22:43

I’ll ask for clarity on whether my using my redundancy pay is an investment and on what terms.

It doesn't sound as if he is wanting you to invest (ie part-own) his new company though. He just wants you to work for free for three months. Which is bloody cheeky. Tell him you've already earmarked the redundancy money and therefore will need to start looking for a paid role to start immediately, not in September.

AlisonDonut · 28/05/2024 22:49

Wouldn't that take you below the national minimum wage? You will lose 3 months NI. How would the tax work as redundancy is tax free but wages aren't.

This is basically fraud!

Teq · 28/05/2024 22:55

In OldCo’s shoes, I’d be arguing that this is a TUPE scenario and that you move to NewCo without redundancy, but with NewCo needing to maintain your Ts&Cs.

But that’s me being cynical.

Being very cynical, I’d question why OldCo are allowing managers to take over work from a client. Surely they could bill for some of that work and let you work on it during your notice period?

It doesn’t add up at all.

OP, I wouldn’t do this at all. It’s too risky for you. What’s the benefit to you in this arrangement, as I can’t see any.

AfraidToRun · 28/05/2024 23:45

Well he will need to pay at least NMW, Employers NI, inform HMRC... and if you have a contract pay in line with that....

JoyousPinkPeer · 12/08/2024 08:59

He pay want to use his redundancy pay fir first 3 months salary but can't, and should not, expect you to, unless you are a partner in the new business.
Just say you've taken some advice and the redundancy pay does not mean you shouldn't be paid from the new business - you might add that you don't mind being paid late if that helps the business start up.

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