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I am a foreigner from overseas I just arrived in UK 3 months ago.

I have been working for a small startup in UK as CTO, my employer didn't want to give me an employment contract of any type, or founders agreement, he said he had given me so many vested shares but I have given him no info/passport/id for him to put the shares against or sign anything, he pays me weeks late.

I received a better offer at another company.

The CEO has been sending me unethical messages and now wants to take me to court to try and get back everything he paid me, unless I submit to his mutual agreement and send back all the money he paid me.

What should I do?

EthicalGuy
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  • I guess he hasn't actually gone to the trouble of getting a solicitor to contact you (yet)? What is your end-goal - do you want to keep some or all of the shares he said he gave you? Have you actually seen any evidence of these shares? – brhans Jun 18 '19 at 12:28
  • I have seen no evidence of the shares, no solicitor has contacted me yet. I don't plan on keeping any shares, I can't as they were to be released over a period of time. My end goal is to just move to my new position. I know he won't pay me for the work I done last month, he wants to try and get back everything he paid me previously. – EthicalGuy Jun 18 '19 at 12:36
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    "he said he had given me so many vested shares but I have given him no info/passport/id for him to put the shares against": did he put it in writing? If not, can you document his promise through other means? He may owe you those shares in any case, or you may already own them even if he did not have your passport number; it's not necessarily required to have a copy of your ID. – phoog Jun 18 '19 at 15:16
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    It's worth noting that in the UK an employment contract doesn't have to be written down to be valid, and after a certain amount of time a standard one is legally deemed to be in force for things like notice periods et al. –  Jun 18 '19 at 20:12
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    You need to learn the most important sentences in English. The first is, "No". It's useful in a wide variety of situations. The second is, "You must contact my solicitor, Mr/Ms XYZ, regarding this and any other matters. His/her number is 12345 678901. Good day". Obviously, contact the solicitor ahead of time regarding your back wages, the harassment from the owner, etc. Say this all in one go, talk over the top of the other person, and hang up when you've said your piece. Make a record of date and time the former boss called, and keep your solicitor up-to-date on this. – Bob Jarvis - Слава Україні Jun 18 '19 at 23:50
  • He is never going to recover what he has already paid you for work you have already done, and there is no breach of even an unwritten contract if you worked out a notice period equal to your pay period. If he was late paying, the breach of contract is on his part. Either he already know all this and is bluffing hoping you don't, or he doesn't and will find out the hard way. Do nothing except perhaps prepare a solicitor to receive notices. – user207421 Jun 18 '19 at 23:56
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    have you been in possession of a U.K. visa that permits employment? This doesn't have anything to do with his ridiculous demands, but it is a zinger you might get hit with if this thing gets too formal... – Harper - Reinstate Monica Jun 19 '19 at 00:52
  • The first thing to do it to accept that you will not see those "vested shares" ever without spending a ton on lawyers (or threatening to do so, it might work). – Hobbamok Jun 19 '19 at 08:16
  • I think your basic problem is that reading between the lines of your post, your entire "employment" has been illegal. If that is the case, since it will be rather hard to explain why you entered the UK 3 months ago and then became illegally employed "by accident" without realizing, it, you can't take legal action against the guy without incriminating yourself! IMO the pragmatic solution is "take the money and run" - if you don't have any documentary evidence relating to promises of shares, etc, just forget about them. – alephzero Jun 19 '19 at 10:18
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    @alephzero I see no evidence that the employment is illegal. As far as I know - I am not a lawyer - a verbal agreement between employer and employee is legal in the UK. Also, all citizens of the EU (and some more European countries) are allowed to enter the UK and work without any need of a visa. The OP hasn't told us what county they are from (only "overseas"). – ypercubeᵀᴹ Jun 19 '19 at 11:16
  • @ypercubeᵀᴹ In the UK a contract can be verbal. But the employer must provide an 'employee' with a 'written statement of employment particulars' if their employment lasts for a month or more. The statement must be provided within two months of the start of employment. – Lag Jun 19 '19 at 11:59
  • @Lag, sure I didn't know about that. I was commenting about the "illegally employed" in alephzero's comment. If the employer does not provide the required documents, surely the employee is not to blame, right? – ypercubeᵀᴹ Jun 19 '19 at 12:09
  • Giving back money he gave you would only make sense if you explicitly agreed to stay longer, under the penalty of having to give back the money. "he won't pay me for the work I [did] last month" - that's probably illegal. – NotThatGuy Jun 19 '19 at 12:27
  • @Harper I have a VISA that allows me to work. I don't believe I ever provided him with the information though. – EthicalGuy Jun 19 '19 at 12:45
  • @Lag I have not seen or signed any 'written statement of employment particulars' or any document at all from being employed. – EthicalGuy Jun 19 '19 at 13:04

4 Answers4

34

What should I do?

Don't get intimidated, don't sign/accept/submit to his "agreement" now that you are securing employment elsewhere, and make sure that henceforth all your communications with the CEO & his startup be --or continue to be-- in writing.

The CEO's attempt to be reimbursed is pure non-sense because hitherto there is no mutually agreed clause between you two to that effect. Generally speaking, compensation is for the professional's work, not for his employment spanning "n" pay periods. Having there been no employment/founders agreement of any type, he will be unable to prove that this was agreed any differently in your case.

Furthermore, the CEO's threat to seek reimbursement of your earned compensation unless you submit to his "mutual" agreement not only amounts to extortion, but it also reflects his cluelessness about contract law. For instance, that contracts which are signed under hardship or duress are voidable.

By contrast, submitting to his conditions will needlessly impose on you the burden of proving duress once you decide the situation is unsustainable. This is in addition to the legal weight with which your acceptance and subsequent conduct would support the CEO's allegation(s) that you two have "at all times" been in a cognizable contractual relation.

Being realistic, it is highly doubtful that a startup which pays you weeks late is able --or even willing-- to spend money on a lawyer for nonsense like this.

Iñaki Viggers
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    Perhaps he was paying late because of cash flow problems stemming from legal fees related to other former employees. But I agree that it's probably bluster and he's unlikely to hire a lawyer. Why else would he not "want to give me an employment contract of any type"? – phoog Jun 18 '19 at 15:26
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    @phoog "Perhaps he was paying late because of cash flow problems stemming from legal fees related to other former employees" Haha, absolutely. Being cash-strapped is understandable and unfortunate, but the context altogether suggests that the CEO is a mess in terms of morals and of running a company. – Iñaki Viggers Jun 18 '19 at 20:43
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    @IñakiViggers Thanks for the response, has really uplifted my day after getting bullied this morning. I still haven't been paid for last month as well but I'll take it as a loss unless he takes this to court. – EthicalGuy Jun 18 '19 at 21:51
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    @Ethical He won't take it to court because he knows he won't win. You've done work and he has paid you for it. Unless he's an idiot, he's well aware that he won't win - and I think he is, since he wants you to sign a contract to say you'll pay him - and he's just probably bluffing to try and get money from you – ProgrammingLlama Jun 19 '19 at 02:04
  • @Iñaki Viggers I was also going to give two weeks notice, I came in on Monday after I finished(day one) he took my key to access the building as well as all the accounts I handed over to him as he found a freelancer to continue where I finished. I then I messaged him: I'm not sure if you need me to come in now. He said "Yep that's fine" then said any attempts to access documents, logins, any IP will be reported, and I cannot access the facilities without approval(Fair enough requirements) then said the next day I only gave him two days notice with all the other abuse. – EthicalGuy Jun 19 '19 at 12:54
  • @EthicalGuy You are dealing with an erratic person. That is never good because that kind of people is prone to worsen their acts such as defaming you (as my former employer did and which prompted me to sue him) and sabotaging your prospective employment if he can. Hope you can sever ties with him asap. – Iñaki Viggers Jun 20 '19 at 19:51
10

What should I do?

I would take one of two approaches. Either

  1. Ignore him until he actually takes you to court, at which point hire a lawyer, or

  2. Hire a lawyer now and demand that he communicate with you only through your lawyer.

I would prefer the first course of action because I assume that either he will run out of steam eventually and stop bothering you, or he will actually go to a lawyer who should point out to him that he has no basis for the demands he is making and refuse to take the case.

If he persists in harassing you, though, at some point you'll want to go to the second option. This will cost a bit of money, but it might be worthwhile if it protects you from the stress of his bullying.

As implied in another answer, I note that putting you under pressure to "submit" to his demands is not consistent with the meaning of "mutual agreement." I agree with that answer when it says that he is unlikely to be willing or able to hire a lawyer, and I wonder whether that is the reason he avoided giving you a contract in the first place: he didn't want to spend money on a lawyer.

phoog
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    The "hire a lawyer now" is dangerous, because he can deal you the "death of 1000 cuts" - just keep contacting your lawyer over and over with matters that are trivial, but not quite trivial enough to be blatantly vexatious, and your lawyer has to deal with every one, and you get the bill the lawyer's time on every contact and research. – Harper - Reinstate Monica Jun 19 '19 at 00:53
  • @Harper that is a good point. – phoog Jun 19 '19 at 01:59
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    @Harper That's common in the US, but not so much in civilized countries. Note the difference between https://en.wikipedia.org/wiki/American_rule_(attorney%27s_fees) and https://en.wikipedia.org/wiki/English_rule_(attorney%27s_fees) . In the UK, where the OP says he resides, "death of a 1000 cuts" is a dangerous thing to try unless you have a very solid case (and even then). – Will Jun 19 '19 at 07:44
  • @Will The English rule certainly applies if the case goes to court, but if the CEO never takes it to court, then it is very hard for the OP to recover his costs. – Martin Bonner supports Monica Jun 19 '19 at 09:51
  • @MartinBonner True to an extent, but the CEO would need to be very careful to not give his employee enough of a case for the CEO ending up being the one to be taken to court -- a dangerous game of poker either way. – Will Jun 19 '19 at 09:58
  • "but if the CEO never takes it to court" - then you have a chat with your lawyer - death by 1000 cuts sounds like a harassment case in the making. – UKMonkey Jun 19 '19 at 12:59
  • @Will that only works if you get to verdict. 90% of court cases get settled enroute, which ends the matter. And 90% of "matters" don't even become court cases. So you essentially you are proposing that in "civilized countries", one drags the counterparty all the way to verdict for the sole purpose of collecting legal fees. Talk about a gamble! – Harper - Reinstate Monica Jun 19 '19 at 14:50
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Don't bother spending your money on a lawyer: those threats sound like bluff. You can always hire one when your former employer brings you to court, which (taking into account the absurdity of his claims) will most certainly be "never".

Don't sign any agreements now, unless you need something to be signed (and in that case, make sure you understand what you're signing). You can collect messages from your former employer (if they call, tell them right away that you're going to record the call) and see if you can sue them for extortion. You will need a lawyer for that, and based on what you described it will likely not worth the trouble.

Dmitry Grigoryev
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    "Extortion" is not a civil wrong in England and Wales. (It's a crime, but I doubt the OP wants to get into a private prosecution.) He might be able to sue for "harassment" but it would have to get pretty bad for that to be worthwhile. – Martin Bonner supports Monica Jun 19 '19 at 10:39
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Get a lawyer.

Maybe he actually has legal standing, maybe he hasn't. A professional lawyer can look at all the paperwork and then advise you what to do. Anonymous strangers on the internet are not going to be of any use to you, because they don't know all the details.

Philipp
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    We strangers never know all the details of an OP's matter, but we can certainly highlight the legal implications of what the OP describes and provide some starting points for him to do further research if he deems it necessary. – Iñaki Viggers Jun 18 '19 at 13:49
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    Probably a lawyer will say that you can actually sue him for having employed you without a contract. – Pere Jun 18 '19 at 21:14
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    @Pere There is an implicit contract. If I start working for you and you don't stop me, and you pay me and I keep what you give me, then we have an implicit contract. – gnasher729 Jun 18 '19 at 22:00
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    @Pere Sue him on what grounds? – David Richerby Jun 18 '19 at 22:00
  • @DavidRicherby - I don't know about UK low, but in other countries employing somebody without a contract is against employees rights and it can even be a crime. http://noticias.juridicas.com/base_datos/Penal/lo10-1995.l2t15.html If the OP were in Spain I'm sure the employee could at least get the employer fined, and he would likely be entitled to some compensation. The only defence the employer could claim is that theirs wasn't an employer-employee relation, but according to the OP's description that would be hard to prove. Even if UK law is very different, the employee has the high ground. – Pere Jun 19 '19 at 14:49
  • @Pere I don't know much about UK employment law, but I doubt a formal written contract is legally required. Also, you seem to be confusing suing somebody and bringing a criminal prosecution. If a crime has been committed, it's the state's job to prosecute the perpetrator; suing somebody is to obtain (typically financial) compensation for harm that has been done. To sue somebody, you would have to show that you have been harmed in some way. – David Richerby Jun 19 '19 at 14:54
  • @gnasher729 - Again, I don't know about UK law, but in Spain an implicit contract would default to the kind of contract supposed most beneficial to the employee - a permanent position. Furthermore, the employer has the obligation to register the contract and pay to the National Insurance. Working without a contract usually skips that, and denouncing the employer could put him on big problems. I don't know how different can be all that in the UK. – Pere Jun 19 '19 at 14:56
  • @DavidRicherby - Yes, I agree that I denouncing somebody and suing him are different things and I oversimplified in my initial comment, and a lawyer should be able to advise which ones are applicable here. An not having contributions to National Insurance paid or not getting the proper termination payment - things that tend to happen when working without a contract - are often ground enough for the employee to claim harm. – Pere Jun 19 '19 at 15:02
  • @Pere OK, though it's perfectly possible to make NI contributions without a contract (I agree that not having a contract probably correlates, though) and the employee is leaving voluntarily so there's no termination payment due in this case. – David Richerby Jun 19 '19 at 15:09