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Constructive Dismissal

I've seen a lot of help provided by HR professionals on here, so hoping someone can offer some advice.

Long story...

My partner was advised about 2 months ago that the business she works for is selling up, and that there are two interested buyers. Naturally, there's an element of uncertainty attached but she was assured verbally, that her employment would be protected as part of the terms and conditions of the sale. It's only a small business with the owner and my partner being the only two workers.

Since then the owner of the business has turned up to work infrequently leaving my partner to run the business for her, has regularly criticised her work (despite trusting her to run the business) and is often passive aggressive. It's got to the point now where they can regularly go through a day without the owner speaking to my partner, or doing her best to avoid her. The owner has told several of their clients she has sold the business despite telling my partner that she is not allowed to talk about the sale process. The final straw is that, for the 2nd month running, she has been paid late.

My partner has been employed by the owner for over 4 years, has never taken a day off sick and witnessed three other staff members sacked for drinking alcohol on site, stealing and unreliability. It's fair to say that she's been nothing but reliable and the way she's getting treated is really winding her and in turn me up.

Worryingly, I asked my partner to show me a copy of her contract of employment and she's never been given one.

So could anyone answer the following questions?

1.) What rights does she have without an employment contract?
2.) Does she have any right to ask for written assurances that her position would be safe in the event of a sale?
3.) Is the treatment above enough to pursue a case of constructive dismissal if she felt she had no alternative to leave? (I assume no contract means there isn't a breach so it might be complicated).

We're getting married next year and she's on better money than she could get anywhere else, the only reason she would leave is the treatment she's been receiving and the uncertainty of the sale.

Any help or pointers would be great. We're thinking about speaking to Citizens Advice too.

Comments

  • Can't help on constructive dismissal.
    But with regard to point two, I believe TUPE applies to businesses of any size. I'd recommend having a read of this: acas.org.uk/media/pdf/d/r/Handling-TUPE-Transfers-The-Acas-Guide.pdf
  • That's helpful thanks. At least it gives some comfort that if she sticks it out there's an element of protection.
  • edited August 2016
    Firstly, your partner's employer has failed in their statutory duty to issue a written statement of terms and conditions. This must be within 13 weeks of commencement of employment and is usually in the form of a contract although it doesn't have to be. That notwithstanding, the three elements of a contract - offer, acceptance and consideration - do exist and therefore she has full employment rights under the Employment Rights Act 1996 (and subsequent amendments) together with other statutory employment rights as passed into law.

    So that answers your first question.

    In terms of question 2, no she doesn't have such a right and for very good reason. The new owner would become her employer and couldn't reasonably be expected to honour such a deal. Nobody's job is safe and redundancy (assuming it meets the criteria) is a fair dismissal. However her terms and conditions would be protected under the Transfer of Undertakings (Protection of Employment) Regulations 2006 and 2014 (TUPE).

    Finally, winning an Unfair Dismissal claim isn't easy - winning a Constructive Unfair Dismissal claim is even harder as the burden of proof would be on your partner to prove that the employee/employer relationship had broken down so fundamentally that she had no other course of action other than to resign. I would advise against this if it can be avoided at all.
  • I would suggest she requests the company's grievance procedure and starts a grievance. It is going to be extremely difficult to get through a case of constructive dismissal if she has put up with all the shit but has done nothing about it. a case is much stronger if you have exhausted internal procedures
  • Because of TUPE I can't believe the purchaser would not have asked for details of employees' contracts, how else would the purchaser know the cost of the employment obligations being taken on. The risk is that inferior contract terms are now created to deliver to the purchaser which would be difficult to challenge.

    There must have been verbal/email exchanges when first employed around salary, notice periods, holiday etc. To defuse the situation it would be reasonable to say "Can I please have my terms of employment written down so that there is no confusion for my new employer"
  • edited August 2016
    rina said:

    I would suggest she requests the company's grievance procedure and starts a grievance. It is going to be extremely difficult to get through a case of constructive dismissal if she has put up with all the shit but has done nothing about it. a case is much stronger if you have exhausted internal procedures

    Not necessarily - especially if you believe the internal processes are ineffective and likely to be given lip service. A Tribunal would always accept this as reason for not pursuing all internal avenues and it does not weaken the case.

    Besides the only other person there is the owner with whom she would have the grievance. Who's going to hear it?
  • Because of TUPE I can't believe the purchaser would not have asked for details of employees' contracts, how else would the purchaser know the cost of the employment obligations being taken on. The risk is that inferior contract terms are now created to deliver to the purchaser which would be difficult to challenge.

    There must have been verbal/email exchanges when first employed around salary, notice periods, holiday etc. To defuse the situation it would be reasonable to say "Can I please have my terms of employment written down so that there is no confusion for my new employer"

    It's a tiny business and likely only to have statutory minimum holidays and notice. The payslips confirm the contractual 'consideration' and pay is likely to be the most important TUPE element.
  • edited August 2016
    Funny you say that @bobmunro, it's only since this has all happened that I've found out my partner rarely gets payslips (maybe once a year). She was also given a pay rise about 18 months ago without anything in writing.

    I've kicked off because other than a P60 a few years back, she has nothing to show she's been paying tax or NI, which could have a big impact on her state pension given the new laws about x years employment and I can imagine HMRC knocking at the door one day.

    If we really had to, we could get 4 years worth of bank statements to prove the monthly payments, but it seems a bit flimsy.

    Coming from corporate environments myself, I've never seen or heard a business run like this.

    There's an office available next door to her business. I've half jokingly said she should set up by herself and take the clients.
  • Funny you say that @bobmunro, it's only since this has all happened that I've found out my partner rarely gets payslips (maybe once a year). She was also given a pay rise about 18 months ago without anything in writing.

    I've kicked off because other than a P60 a few years back, she has nothing to show she's been paying tax or NI, which could have a big impact on her state pension given the new laws about x years employment and I can imagine HMRC knocking at the door one day.

    If we really had to, we could get 4 years worth of bank statements to prove the monthly payments, but it seems a bit flimsy.

    Coming from corporate environments myself, I've never seen or heard a business run like this.

    There's an office available next door to her business. I've half jokingly said she should set up by herself and take the clients.

    It doesn't surprise me at all - many very small businesses have no idea!

    I would advise your partner contacting HMRC to check on PAYE payments made by her employer.

    Maybe she should do as you say and open up in competition. The absence of a contract means the absence of any non-solicitation or non-compete clauses!!
  • edited August 2016
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  • Agree with the suggestion of checking with HMRC that they've been receiving the employer's contribution (ditto the pension company, if they're in a scheme), as well as the employee's contribution - problems could arise if they're made redundant at some point and want to claim benefits only to find that the employer made the deductions from their pay but never handed it over to the revenue, as their record will show insufficient contributions made. If this is the case, it should be picked up by the incoming company as part of their due diligence, but as there could be personal impact, it's better to check and know - and this would also constitute fraud on the part of the company.
  • Thanks everyone, all really helpful advice. Much appreciated.
  • bobmunro said:

    Funny you say that @bobmunro, it's only since this has all happened that I've found out my partner rarely gets payslips (maybe once a year). She was also given a pay rise about 18 months ago without anything in writing.

    I've kicked off because other than a P60 a few years back, she has nothing to show she's been paying tax or NI, which could have a big impact on her state pension given the new laws about x years employment and I can imagine HMRC knocking at the door one day.

    If we really had to, we could get 4 years worth of bank statements to prove the monthly payments, but it seems a bit flimsy.

    Coming from corporate environments myself, I've never seen or heard a business run like this.

    There's an office available next door to her business. I've half jokingly said she should set up by herself and take the clients.

    It doesn't surprise me at all - many very small businesses have no idea!

    I would advise your partner contacting HMRC to check on PAYE payments made by her employer.

    Maybe she should do as you say and open up in competition. The absence of a contract means the absence of any non-solicitation or non-compete clauses!!
    Well then, it might help to check here: https://gov.uk/check-state-pension

    While, as it says on the tin, it's broadly a state pension checker, it also gives details of your National Insurance history, so your partner would be able to check whether payments have actually been made on her behalf. You never know.....
  • bobmunro said:

    rina said:

    I would suggest she requests the company's grievance procedure and starts a grievance. It is going to be extremely difficult to get through a case of constructive dismissal if she has put up with all the shit but has done nothing about it. a case is much stronger if you have exhausted internal procedures

    Not necessarily - especially if you believe the internal processes are ineffective and likely to be given lip service. A Tribunal would always accept this as reason for not pursuing all internal avenues and it does not weaken the case.

    Besides the only other person there is the owner with whom she would have the grievance. Who's going to hear it?
    true, maybe I should have said a case is much stronger if you've investigated internal procedures. I would send an email, so there is a trail, requesting the procedures. if there is no reply or a poor one then this can strengthen your case
  • edited August 2016
    I'm probably stating the obvious, but it sounds to me like the employer is mistreating your wife, in the hope that she resigns.
  • edited August 2016
    I know this isn't much use to you mate, but if you get her to log in to the HMRC website you should be able to see a fair bit about her tax situation - including which years she's payed NI contributions for.

    Edit: @cafcfan has beaten me to it, teaches me to make a cuppa mid-post! ;)
  • I'm probably stating the obvious, but it sounds to me like the employer is mistreating your wife, in the hope that she resigns.

    This is the biggest bug bear for me. There's a clear turning point in behaviour since she's decided to sell the company. One of the reasons I asked to see her contract was so that I could see if there was anything that would put prospective buyers off a purchase. Somethings not quite adding up.

    It's just infuriating that we'd sorted out all of our finances for the wedding next year, and she'll likely have to leave a job for a lesser salary through no fault of her own.

    If there was a team and not just of the two of them I know she'd stick it out, but it's now at the point where she doesn't want to go to work as it's that uncomfortable. In the 4 years we've been together she's always loved her job.
  • edited August 2016
    Get your wife to check out her NI contributions made as well. cafcfan put the link above. It doesn't take long at all & you get the result within about a week, IIRC. It's very simple.

    If she's been getting no pay slip, I wonder if she's been making the payments at all for tax & NI.
  • edited August 2016

    I'm probably stating the obvious, but it sounds to me like the employer is mistreating your wife, in the hope that she resigns.

    This is the biggest bug bear for me. There's a clear turning point in behaviour since she's decided to sell the company. One of the reasons I asked to see her contract was so that I could see if there was anything that would put prospective buyers off a purchase. Somethings not quite adding up.

    It's just infuriating that we'd sorted out all of our finances for the wedding next year, and she'll likely have to leave a job for a lesser salary through no fault of her own.

    If there was a team and not just of the two of them I know she'd stick it out, but it's now at the point where she doesn't want to go to work as it's that uncomfortable. In the 4 years we've been together she's always loved her job.
    I've worked in a similar situation (i.e two person business), and even without the aggro it can be quite tense. She's got some real strength of character to be sticking it out though, really commendable.

    What kind of work does she do out of interest, if you don't mind saying?
  • Did she receive a P60 (statement of earnings and tax deducted) after the end of the last (or any previous) tax year?
    Again, it's a legal requirement that the employer provide this as part of their year end reporting.
    If not, she has some leverage as she can report the business owner for non compliance in a number of areas by the sound of it.
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  • LuckyReds said:

    I'm probably stating the obvious, but it sounds to me like the employer is mistreating your wife, in the hope that she resigns.

    This is the biggest bug bear for me. There's a clear turning point in behaviour since she's decided to sell the company. One of the reasons I asked to see her contract was so that I could see if there was anything that would put prospective buyers off a purchase. Somethings not quite adding up.

    It's just infuriating that we'd sorted out all of our finances for the wedding next year, and she'll likely have to leave a job for a lesser salary through no fault of her own.

    If there was a team and not just of the two of them I know she'd stick it out, but it's now at the point where she doesn't want to go to work as it's that uncomfortable. In the 4 years we've been together she's always loved her job.
    I've worked in a similar situation (i.e two person business), and even without the aggro it can be quite tense. She's got some real strength of character to be sticking it out though, really commendable.

    What kind of work does she do out of interest, if you don't mind saying?
    She's a Beauty Therapist and by her own admission what she does just isn't worth the stress she's getting. If we weren't getting married I think we'd use our savings to set her up by herself. I've suggested we push the wedding back so we could do it but in hindsight, I think that suggestion probably made the situation a bit more tense.

  • IdleHans said:

    Did she receive a P60 (statement of earnings and tax deducted) after the end of the last (or any previous) tax year?
    Again, it's a legal requirement that the employer provide this as part of their year end reporting.
    If not, she has some leverage as she can report the business owner for non compliance in a number of areas by the sound of it.

    The last P60 was 2 years ago and the last payslip was April.

    I think she's decided to leave and draw a line under the experience. A shame, because she likes her clients and has made some great friends, but she's not exactly an open heart surgeon and it's just not worth the stress.
  • If she likes them and they like her, there's a business waiting to be started when the time is right.
    Good luck to the pair of you.
  • IdleHans said:

    Did she receive a P60 (statement of earnings and tax deducted) after the end of the last (or any previous) tax year?
    Again, it's a legal requirement that the employer provide this as part of their year end reporting.
    If not, she has some leverage as she can report the business owner for non compliance in a number of areas by the sound of it.

    The last P60 was 2 years ago and the last payslip was April.

    I think she's decided to leave and draw a line under the experience. A shame, because she likes her clients and has made some great friends, but she's not exactly an open heart surgeon and it's just not worth the stress.
    Weird. My wife was a beauty therapist. She did a bit of work from home when she left her job, bought herself a massage couch & still has it.
  • IdleHans said:

    Did she receive a P60 (statement of earnings and tax deducted) after the end of the last (or any previous) tax year?
    Again, it's a legal requirement that the employer provide this as part of their year end reporting.
    If not, she has some leverage as she can report the business owner for non compliance in a number of areas by the sound of it.

    The last P60 was 2 years ago and the last payslip was April.

    I think she's decided to leave and draw a line under the experience. A shame, because she likes her clients and has made some great friends, but she's not exactly an open heart surgeon and it's just not worth the stress.
    In the circs, she should barricade herself in the building until she's got her P45.
  • .

    IdleHans said:

    Did she receive a P60 (statement of earnings and tax deducted) after the end of the last (or any previous) tax year?
    Again, it's a legal requirement that the employer provide this as part of their year end reporting.
    If not, she has some leverage as she can report the business owner for non compliance in a number of areas by the sound of it.

    The last P60 was 2 years ago and the last payslip was April.

    I think she's decided to leave and draw a line under the experience. A shame, because she likes her clients and has made some great friends, but she's not exactly an open heart surgeon and it's just not worth the stress.
    Her P45 might make interesting reading for her if I've read the other posts correctly
  • At the very least she should call all her clients and ask them to stay with her then go look for another job with the promise of taking some clients with her - that will increase her earnings elsewhere and probably 'punish' her current employer at the same time.

    If she manages to take most (or all) of the clients her current employer could find herself unable to sell her business and/or sued after the sale of the company.
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