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JGM
JGM, Solicitor
Category: UK Law
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Experience:  28 years as a practising solicitor.
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Outline:Company A, Company B and Company C are all based

Customer Question

Outline: Company A, Company B and Company C are all based in a shared services office block.


 


Company A and C are directed by the same people, one as an established limited company (Company A), the other is a brand new Community Interest Company (Company C). Company B is an unrelated business not linked in any way with Company A or Company C.


 


I signed a contract on behalf of my ltd company (Company A) with another business (Company B) to supply services. I found Company B because they are based in the same building as my company.


 


The contract with Company B was for three months, Company B allocated a staff member from their team, and work began. After works started it became apparent that the service we were receiving from Company B was not to the terms we agreed, and I gave the stipulated notice period of thirty days on the contract two months in to works with Company B. Company B accepted the termination, and completed the works. Company A paid the bills, the parting was amicable.


 


Almost a year later the employee allocated by Company B to undertake the works the year earlier announced that they had terminated their employment with Company B on amicable terms and was currently seeking employment.


 


I was aware that Company A had a contract with Company B which contained a non poaching clause, and with this in mind, and the fact that Company A had no vacant positions available, no offer of employment was possible, and therefore no offer was made to the former employee of Company B.


 


However, I explained to the former Company B employee that Company A was setting up a new Community Interest Company (Company C) which is a not for profit good causes business for the local community. Company C is based in the very same office as Company A, in the corner.


 


The former employee of Company B volunteered to help out occasionally while having some time out of employment, and seeking employment. I accepted.


 


A few weeks later the new volunteer (former employee of Company B) came into the offices of Company A/C for the first time, and undertook voluntary work.


 


While visiting the buildings communal shared amenities the volunteer bumped into a former boss, Director of Company B.


 


After a short chat between the volunteer and the former employer, Company A received an email containing the contract signed a year earlier between Company A and Company B to highlight Section 6 (poaching of staff).


 


I have offered Company B the opportunity to meet and discuss the situation, and initially after accepting, they have fallen silent. I expect a meeting with them in the next few days, and would appreciated some legal advice on how I should tackle any questions I might encounter.


 


The clause reads in the contract:


6.1 The Customer shall not in any way cause or induce any employee to leave the employment of the company.


 


6.2 In the event an employee of The Company is employed by The Customer within 12 months of the cessation of this agreement The Customer agrees to pay The Company £10,000 or 50% of the employee's starting salary, whichever is greater. 


 



Company A has not offered any employment opportunity or hired the former Employee of Company B. 


 


I guess my questions include:


1) The Contract is between Company A and Company B.  The directors of Company A and C are the same, in law is there any association? (Company A is a ltd company, Company C is a C.I.C. with its own number).


2)  If Company B try to enforce 6.1 by assuming (incorrectly) that Company A has induced their staff, how should Company A respond?


3)  The signed contract has an error directly under the signature of the Director of Company B, referencing the attached terms. For the Director of Company B the line states 'I hereby acknowledge receipt of, and agreement to, the attached [Company B Name] Terms and Conditions October 2011'. Yet, for my signature, the date is the correct date for the terms which are referenced May 2012 as...  'I hereby acknowledge receipt of, and agreement to, the attached [Company B Name] Terms and Conditions May 2012'.   Does this error hold any invalidity towards the contract?


 


Notes:
Company C is not in the same sectors as Company A or Company B.


Company C is staffed entirely by volunteers, with none on payroll.


 


 


 

Submitted: 1 year ago.
Category: UK Law
Expert:  JGM replied 1 year ago.
Thank you for your question.

1. There is no association between the two companies. If C has taken on the former employee of B as a volunteer then that is nothing to do with A.

2. By denying that A has anything to do with it. Presumably you can produce a letter from C to the person concerned confirming their association with C.

3. It is the content of the terms and conditions attached to the contract that is important, not the date. If there is a mistaken reference, it's not fatal and would not strike out terms and conditions attached on the basis that common sense dictates what the terms and conditions are.

Happy to discuss further but I don't think you have a problem here.

Please leave a positive response so that I am credited for my time.
Customer: replied 1 year ago.

You have made me feel so much better. Thank you for a clear, outlined reply.


 


One further thought. My colleague (a co-Director of Company A/C) sent the following to the Director of Company B from Company A saying:


 


<start>


I should point out that Company A is not employing [name of person] or offering her employment, however it would be good to go over this with you to avoid any misunderstandings.


<end>



The Director of Company B replied with:


 


<starts>


I’d be interested in understanding how [name of person] working from [Company A name] offices for a business you’re a Director of doesn’t breach the terms of the agreement.


<ends>


 


Does the Premises and shared resources/address of Company A (which is offering space and infrastructure as part of the setup of Company C (while it learns to stand on its own two feet)) cause any association between the two? As laid out in the comment from Director of Company B, above...(which could help contribute to the confusion of Director B).


 


And finally, I will need representation should this flair up, can you please provide fee guidance for your services going forward supporting Company A.



And even more finally, can I say to the Director of Company B that this situation is wasting my valuable time, and state that for every hour spent on this issue, I will be billing for? Is there a paragraph of text I could use?


 


I really appreciate your help with this one, and for being online at this time.


 


 


 


 


 

Expert:  JGM replied 1 year ago.
Put simply the person is doing voluntary work for Company C which shares premises with Company A. You can't really make it any plainer than that.

As far as representation is concerned you may have to instruct your own company solicitor if proceedings are raised (which I doubt, frankly). But you can always post questions here addressed toCustomerif I can help you further on a question and answer basis.

You can't really bill for your time in dealing with this person but you can say that in the event of the matter proceeding to litigation you will seek full costs against him on the basis of his allegations being spurious and without merit.
JGM, Solicitor
Category: UK Law
Satisfied Customers: 7886
Experience: 28 years as a practising solicitor.
JGM and 4 other UK Law Specialists are ready to help you
Customer: replied 1 year ago.

Thank you, XXXXX XXXXX and just what I needed. :-)

Expert:  JGM replied 1 year ago.
You're welcome.
Customer: replied 1 year ago.
:) one thing I forgot to say, not a big one if I have already expired on time with you....

The Volunteer had resigned with her employer (Company B) in advance of talking to me (first about Company A, and then about Company C) with Company C being the outcome, in a volunteer role. I see a potential immediate way of closing the discussion with Company B by saying that the Volunteer is not a current employee of Company B. Am I right?

Don't feel you have to answer this one, it is a cheeky afterthought... ;)
Expert:  JGM replied 1 year ago.
Happy to help.

It depends whether the employee had left the employment of B completely. If still working notice then you are wrong. If the notice period had come to an end then that would be an argument, yes.
Customer: replied 1 year ago.
Thanks. My understanding from the Volunteer is that she resigned and agreed to leave Company B the same day. I therefore see I need to check with her that that date (mid June) is recorded somewhere. Although I think for clarity I will action as you state. 1) clearly deny Company A, 2) point out volunteer letter from Company C. 3) state costs agains alligation will be recovered and maybe.... 4) invite Company B to volunteer charitable donation to Company C as good will ;)

Thanks and goodnight :)
Expert:  JGM replied 1 year ago.
You're welcome.

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JGM
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28 years as a practising solicitor.