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I worked at company A (banking company) as an IT Developer in developing internal company applications. However due to government regulations, banking companies are prohibited from developing internal applications (because of security data) and must use services through vendors.

Company A has had the idea to build a new company (say it's company B), so it looks like company A is using the services from company B. Now company A forces its IT employees to move to this new company and plans to move in January, but with a lower salary.

Actually, I already wanted to move from this place because there was no work motivation and also there were no more application projects and they still kept me because the manager wanted me to move to the new company. Also, I was bound by official ties or contracts that made me have to work until January.

My questions are:

  1. Is it ethical that I resign immediately after the contract? How should I explain to the HRD and to the Manager that I want to resign and do not want to move to company B?
  2. Or is it OK for me to work in the new company for a month or two, after which I would submit my resignation?
  3. Or do you guys have any other ideas?

As a matter of fact my contract was completed in July, but 5 months before the end, I received training from company A and they did not explain anything: after finishing the training they explained that the contract was extended because of the training (the company paid the training fee, but they did not explain it from the beginning that the contract will be extended, so I felt cheated and that was one of the reasons why I wanted to quit).

Sean Duggan
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Player 2nd
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5 Answers5

37

Is it ethical that I resign immediately after the contract...

Yes. Any duty to remain at a company ends when the contract does; that's by design. You don't owe it to the company to keep working for them after that.

...how should I explain to the HRD and Manager that I want to resign and do not want to move to company B ?

These reasons you've already given sound good:

  • There aren't any projects you're interested in doing.
  • You don't want a lower salary.

But I do agree with the comments that you don't actually have to give a specific reason. In fact, if you expect your employer will try to argue with you about your resignation, vague is the way to go. Ultimately any objections they have don't matter but it's easier to avoid a long discussion about why you're leaving if you don't give them something to argue against.

I also agree with Bernhard about the motivation reason so I've removed it. Furthermore, I'd recommend against bringing up the contract extension. They'll either lie and said they told you or they'll insist you should have known anyway.

Or is it OK for me to work in the new company after a month or 2 months, after that I just submitted a resign ?

You could do that but considering that:

  1. Company A appears to be trying to violate government regulations with this scheme to make it look like they're getting their IT work done by a 3rd party.

  2. They already extended your contract once without warning you first.

You risk them messing with your contract again the longer you stay and you don't want to be a Company B if and when someone realizes that it's owned by Company A. That sounds like a mess waiting to happen and it's better for you to be far away when it does.

BSMP
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    Some people might interpret "I've lost motivation to work here" as "there are no / few good things about working here". As in they would consider it a bit insulting, which wouldn't be good, but even the best interpretation would probably be made redundant by just focusing on what caused you to lose your motivation instead and let your lack of motivation just be implied (you can't be super motivated to work there if you're resigning). Or just give generalised reasons for leaving. – Bernhard Barker Oct 20 '20 at 15:54
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    "No, thanks." is all the explanation that is needed, unless you expect to be persuaded by some kind of counter-offer. – Eric Hauenstein Oct 20 '20 at 16:10
  • You only need to give a reason if you need to persuade your employer to agree with you. – EvilSnack Oct 20 '20 at 18:28
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    "trying to violate government regulations" - Government regulations forcing companies to split into separate entities may be unusual measures but it's hardly unethical when the bank actually implements it. – pipe Oct 20 '20 at 21:43
  • You probably don't need to resign at all. The contract extension is probably not legitimate and they most definitely cannot simply move/assign it to Company B with a salary reduction. You can simply refuse to sign any contract with B. – obscurans Oct 21 '20 at 00:51
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    @pipe It's one thing if the government is telling the bank to split. It's another if the bank is splitting to bypass government regulations. One is normal. Two is lots of jail. – Nelson Oct 21 '20 at 03:11
  • @pipe OP used the phrase "so it looks like" (emphasis mine), from which I inferred that it wouldn't actually be happening in a way the government is requiring. It read to me that the bank is only pretending that company B is going to be a completely separate entity and the bank intends to meddle in a way the regulation is meant to prevent. – BSMP Oct 21 '20 at 05:24
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You should consult a lawyer over this.

A company cannot force you to transfer to a new company except by transferring your contract. If they transfer the contract then the new company acquires all the rights and duties of the contract - meaning that you get the same terms and conditions, the same pay etc.

If they don't do this then they can only ask you to voluntarily transfer. Or of course they can fire you from the old company and offer you a new job at the new company, but in that case they owe you the same compensation that they would if they fired you for other reasons. You are absolutely free to negotiate the terms of the new position, or to decline the new offer. Frequently companies will hand you a new contract with new terms and try to make you think that's the only option.

If you do take the new job then there is absolutely legally nothing preventing you from resigning. In my view any question of whether it is ethical went away when they forced you to change to a job at a lower salary.

I am not familiar with Indonesian law, but I am confident what I say is likely enough true for it to be worth checking with a lawyer who will tell you for certain. If there are several of you in this position then I would recommend getting together and hiring one lawyer for all of you, since the answer is going to be the same for all.

DJClayworth
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    Agree with the lawyer. I would be cautious about "a company cannot" when talking about another country - there's a lot of things that companies can do in some countries that I would consider insane, personally, so I wouldn't assume it here without direct knowledge of Indonesia (unless you have that of course?) – Joe Oct 20 '20 at 18:11
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    The question asks about "ethical". You answer about "legal". There is a difference. – Stig Hemmer Oct 21 '20 at 08:15
  • @StigHemmer If you read a little further you would have found I wrote "any question of whether it is ethical went away when they forced you to change to a job at a lower salary." – DJClayworth Oct 21 '20 at 12:47
  • -1 "A company cannot force you to transfer to a new company." Not sure why you're saying this, but this happens all the time. Any time there's a corporate merger, or companies split off one side of a business, the employees don't just get stuck in limbo, otherwise these corporate actions could never occur. Most companies realize that when restructuring like this happens, there's going to be extra turnover and plan accordingly. – Tyzoid Oct 22 '20 at 13:50
  • @StigHemmer While there is a difference. Ethics isn't set in stone. The best answers can only give hand holds to help a person consider if their move is seen as an Ethically correct one. In this case. If they're actually being asked something that's not legally expected from them the Ethical dilemma that's being asked about is changed. – skippy Oct 22 '20 at 14:22
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    @Tyzoid I was unclear there. What normally happens in the case you describe is that the contract is transferred to the new company, with the same terms and conditions as the old. Or they ask you to volutarily sign a new contract with the new company (often trying to make it look as if that's the only choice you have). I have rewritten to make it clearer. – DJClayworth Oct 22 '20 at 14:25
  • @DJClayworth Yup, answer is +1 from me now, thanks! – Tyzoid Oct 22 '20 at 18:28
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I am also from Indonesia. And I think If I were you, I'll gonna find more worker who like me to try discuss with the superior to see if we have other solution. We know due to the Goverment Regulation Banking companies are prohibited from developing internal applications (because security data) and must using services from vendors. But it doesn't mean you can cast away worker just the goverment regulation and save company cost. we are worker, we also human, and in this COVID-19 condition we also trying hard to live.

And also in my opinion, If you already loss the motivation and feel being treated unfair by the company or feel being cheated, I don't think you can still focus and happily doing your job and instead if you cannot find a better solution with the superior, I think you should try to find another company which is more suitable for you

Sorry for My English :)

Xexort
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    “We know due to the Goverment Regulation Banking companies are prohibited from developing internal applications (because security data) and must using services from vendors.” Is that actually true? It really doesn't seem to make any sense. – Paul D. Waite Oct 20 '20 at 21:51
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There is nothing ethically wrong with anything you are planning on doing. It is never unethical to leave a job you dislike, for any reason, at any time. Your employer would have no question or issue about firing you at any time for any reason they like (this is true of all companies, at all times, always) and so you should have exactly the same reservations about quitting, which is none.

That said, this training thing might cause you a legal problem. Many companies have some kind of stipulation where you might have a penalty if they paid for training and then you quit shortly after the training was completed. You should check your contract to see if such a stipulation exists. If it doesn't exist, then you should have no legal problem: you never signed any contract which says it does, and the company should be unable to prove in court that you did, meaning they probably can't sue you if you refuse to pay, and you probably can sue them if they e.g. withhold your last month's salary (seek legal advice if this comes up). If it does exist, then you "knew or had cause to know" that taking this training would cause a trigger in your contract to work longer or pay a penalty, and that's on you for not thinking about that before accepting to take that training; you (probably) have no legal standing and have to decide to continue working or pay the penalty.

That said, if the conditions of employment at Company B are significantly worse than Company A, there may be some legal issues you can raise if they try to sue you for leaving. For example, it seems to me like the following situation would be legally questionable (talk to a real lawyer for a real answer):

  1. Company A hires you for $100,000/yr
  2. Company A puts you through some training and forces you to extend your contract, with legal repercussions if you decline
  3. Company A transfers you to Company B, and reduces your compensation from $100,000/yr to $10/hr, but retain the right to sue you if you quit

There are probably some protections in place for this, and if it's relevant to your case then you may want to consult a lawyer.

Ertai87
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  • Just like OP quitting might be a breach of contract, changing the compensation at new company is probably also a breach of the same contract. In all jurisdictions I know, the company can't pick and choose. – lvella Oct 21 '20 at 11:34
  • @lvella Adjusting compensation is usually not in itself a breach of contract. AFAIK you can't sue your employer for cutting your salary (if the company, or you personally are underperforming). – Ertai87 Oct 21 '20 at 14:40
  • The thing is that most employment agreements can be terminated without cause nor penalty by the employee (and often by the employer, where labor laws are less strict). To give up one's right to quit the job, like it seems OP's case, there must be some consideration for it, and the obvious interpretation for such consideration is the assured income for the duration of the contract. I am pretty sure you could sue and win in this case. – lvella Oct 21 '20 at 16:18
  • @lvella Right, and that's what I said in my answer. It's probably illegal to trap the employee into continuing the contract and also cut their pay. Either of those things independently are legal, but together there might be a legal issue. – Ertai87 Oct 21 '20 at 17:02
  • @Ivella - Breaking the contract would be a legal violation, not an ethical violation, there are many things that are legal that I personally consider unethical. I can legally quit my job today, and go work for a contractor (get a raise) and return to work at the same facility, but I personally consider that to be unethical behavior. – Donald Oct 21 '20 at 21:21
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I don't think you should move to the new company

Changing from being contracted by a company to another should require an agreement from both sides. Certainly so given the salary change, as you state you would earn less in Company B.

So, from the outside, and not knowing the specifics of your country, based on the provided information, I think you should refuse to change into company B. The only negotiating power I see from the company A is that they can fire you (your position is removed) if you don't move to company B. But as you were actually planning to resign, they don't have any bargaining power in that. And -check the specifics for your case- you will probably get a better compensation if the company made you redundant than if you resign yourself, so there's no reason to make it cheaper for them. Plus, if the company A decides it does no longer want to employ you, you have no obligation to stay there derived from their previous training, even if there was a clause that would apply if you left.

By refusing to move into the new company, I think company A would have three options:

  • Unilaterally finish your employment. Likely with a better situation for you than if you resigned, either with Company A or with Company B.
  • Keeping you employed, at your current salary, as a slightly different developer. For example, they may need some in-house expertise to act as a liaison with the vendor, or to test that what was provided does match the requisites.
  • Keeping you employed, at your current salary, doing something completeley different, such as working as a bank teller.

The first one is much most likely than the others.

It would be wise to confirm your situation with a lawyer first, obviously. In fact, I find very dodgy that they force their employees to move into a new company losing money, so the ethics issue is probably on their part. I don't think that will be the case but you might be under some special situation where a different route is actually better for you.

Ángel
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