Made redundant - can I go and work for a competitor?

[SilverRainCloud]

Worked for current company for almost 6 years and been made redundant. The contract I signed 6 years ago states that I cannot work for a competitor for 12 months. Is that standard, reasonable and enforceable when I’ve just lost my job?

Sorry you have lost your job. I too need the answer to this question for my partner.

Hope you find a company who values your skills soon.

What does the relevant clause in your contract say? If it states you can't work for any competitor for 12 months it will be completely unenforceable so you can ignore it.

I would have thought the clause is there to prevent you from leaving of your own accord (or being headhunted) and going to work for a competitor.

It would be a bit much for them to enforce it if they've made you redundant.

Speak to your HR Department - if your redundancy has been enhanced any non-compete clauses may have been reinforced as part of the package. Get anything they say in writing, you can also ask to be given exemption from theses clauses given it's redundancy rather than your choice to leave. This was our experience.

If you have been made redundant, has there been any legal advice as part of the process? This would be worth raising with a lawyer if so.

If not, ACAS may help.

Instinctively I think it would be unenforceable

I think it would be classed as an unfair work clause.
As it’s stopping you from making a living,
especially when they are the ones letting you go. Acas or union for better advice in the first instance.

But if they are making people redundant are they really in a place where they can start to enforce this clause in the first place? …. These clauses are hard to enforce and it depends on a lot of information not given here.

12 months is at the upper end of reasonableness but it could be enforceable depending upon the circumstances.

Have you signed a settlement agreement? If so, the restriction will probably be repeated or waived.

Is the redundancy fair? If not, there may be an argument it's unenforceable.

Best to just ask HR. Some employers can be nice where redundancies are concerned and waive it.

Has the redundancy process all been completed? They'll have to pay for you to have legal advice before signing the settlement agreement so that's the person to go through this with.

I am not sure that they have to do this, though it is good practice and many companies do contribute to legals

We had a clause like this in our contracts at a former employer. People were always leaving to work for competitors, especially after they made some redundancies. The legal advice we all received was that such a clause is rarely enforceable in the UK.

Such clauses are very difficult to enforce even when someone is not made redundant. The onus is on them to prove to a court that it is fair. It’s extremely unlikely that a court would agree that it is.

The only way this is normally enforceable is if you have been put on gardening leave. Ie you are being paid you full wage for the set period of time. Both my Uncle's had 6 months gardening leave when being made redundant and I have a friends husband who had around 10 months.

Other wise I don't think they can enforce it.

It's unlikely they can do anything as your contract is terminated when you leave Unless they make you sign a disclaimer when you leave.

This is incorrect, otherwise no one would draft restrictive covenants ever!

DH was made redundant last year, had a similar clause. He spoke to a solicitor, who advised that it would be unenforceable, as what DH does is so specialist, it would be preventing him from working.

He actually ended up working for a client for the duration of the standoff period.

Thank you for all the replies. I will try and answer all the questions in one post…

The company paid a set amount of £300 for legal advice on the termination agreement. The solicitor didn’t look at my contract of employment. They looked at the termination agreement and that states I am bound by everything in my contract 😔

The redundancy is now complete. It took 2 weeks from initial notification of “consultation” to my finish date. I have been paid 3 months salary PILON (payment in lieu of notice).

Contract is a paper document from when I joined the company 6 years ago. My job title and role at the point of being made redundant was different (more senior) to that at the time I joined and signed the contract.

If there are any employment lawyers reading, who would understand the detail of whether the clauses preventing me working for a competitor for 12 months after termination are enforceable I can send a screen shot of the relevant page.

Thanks again for the words of support.

My ExH had these clauses in his contract regularly. (Finance).

The legal advice was that these clauses were unenforceable in the U.K.

However I would suggest that you consult a lawyer professionally to confirm as there may be other factors

You
could post in the Legal
section? There’s at least one sh1t hot employment lawyer on there

Thank you. I will seek that out now.

Thank you Mumsnet HQ for moving this from work to legal.
I would be hugely grateful to any employment lawyer who feels able to comment.

The fact you have been made redundant does not affect whether the clause is enforceable. However, a 12-month restriction is unlikely to be enforceable.

Thank you for the reply. Would that mean they could enforce a shorter time? Or that by putting in 12 months, the clause becomes completely unenforceable?

Employment law aside - how would they know? How could they prove it was you and would they even bother?! Go work for the competition!

Go back to your lawyer and ask, they’ll give you a view on it (might not even charge you!) when I left my last place I had all the non competes changed from 12 months to 3 months to be safe - most are unenforceable (and most companies don’t bother unless you had access to very privileged info/take half your team with you) but some will be holes about it 😬

Are they paying full salary for the non-competition clause? If not, it’s not enforceable in a redundancy situation. There’s no competition as there is no comparable role in the company you worked for.