October 29, 2019
Those intent on changing jobs can easily have their heads turned by glittering offers of remuneration and benefits made over lunch and a handshake. As one case strikingly highlights, it is written terms of engagement that matter. Taking expert advice is the best way to avoid bitter disappointment.
The case concerned two very experienced finance professionals who were recruited as members of a broking partnership. They claimed that lunch with a senior representative of the firm ended with a handshake after various generous terms were offered, including signing-on fees of £100,000, six-figure salaries, guaranteed profit shares, expenses and client entertainment allowances.
When the terms of their membership were reduced to writing the offer was far less extravagant. Their signing-on fees were in the form of loans, forgivable after four years’ service, and there were no expenses allowances. As self-employed members of the firm, they would receive no salaries and their earnings would be largely performance-related.
The difference between the restaurant conversation and the documents that they signed was not conducive to a happy working relationship. Their time with the firm was extremely fractious and they walked out little more than a year after they were taken on. When removed from the firm’s membership, they issued proceedings, seeking payment of six-figure sums they claimed they were owed and damages to reflect their further financial losses.
What was the result?
In dismissing their claims the court rejected arguments that the firm had acted in repudiatory breach of their contracts. Their decision to walk out, was founded on a fundamental misunderstanding of their contractual entitlements and extremely ill-advised. The firm had been faced with two of its members refusing to perform their contracts. In those circumstances, the termination of their membership, on terms which were very unfavourable to them, was in accordance with the provisions of the partnership deed.
If you would like a Contract to be checked, contact our Employment Specialists and book an initial appointment on 01452 222340. We make it our job to relieve the stress and pressure you are currently facing.
Thitchener & Anr v Vantage Capital Markets LLP. Case Number: HQ17X01297