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Ben Jones
Ben Jones, UK Lawyer
Category: Employment Law
Satisfied Customers: 45360
Experience:  Qualified Employment Solicitor - Please start your question with 'For Ben Jones'
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Hiya, I am a director of a business and am being made redundant,

Customer Question

hiya, I am a director of a business and am being made redundant, do the restrictions on my future employment / ventures still apply in this case?
Submitted: 1 year ago.
Category: Employment Law
Expert:  Ben Jones replied 1 year ago.
Hello, my name is***** am a qualified solicitor and it is my pleasure to assist you with your question today. What restrictions are these?
Customer: replied 1 year ago.
there is a clause currently saying if I leave the business I cant set up another one in a similar industry for 6 months.. however I am being made redundant and the business is purely a division (asset) within the parent company so legal standing in its own right
Customer: replied 1 year ago.
are you there
Customer: replied 1 year ago.
hello Ben>>
Customer: replied 1 year ago.
are you able to advise please Ben
Expert:  Ben Jones replied 1 year ago.
Yes of course but i need to get my response ready and every time you post a response it places it at the back of the queue, thanks
Expert:  Ben Jones replied 1 year ago.
The fact that you are being made redundant would not mean that the restrictions in your contract are no longer enforceable. Redundancy is a fair reason for dismissal and if done properly would mean your contract would be terminated legally and any restrictions within it could still be enforceable. So redundancy in itself will not have any effect on them, although the law on such restrictions is quite complex and there are numerous factors which would determine whether an employer can legally enforce them.This is your basic legal position. I have more detailed advice for you in terms of a full explanation of how the enforceability of such restrictions is determined, which I wish to discuss so please take a second to leave a positive rating for the service so far (by selecting 3, 4 or 5 stars) and I can continue with that and answer any further questions you may have. Don’t worry, leaving a rating will not close the question and we can continue this discussion. Thank you
Ben Jones, UK Lawyer
Category: Employment Law
Satisfied Customers: 45360
Experience: Qualified Employment Solicitor - Please start your question with 'For Ben Jones'
Ben Jones and other Employment Law Specialists are ready to help you
Customer: replied 1 year ago.
so what I am wanting to do is start a new business building on what I have done todate ..so ideally want to be able to walk out of this company and start again
Expert:  Ben Jones replied 1 year ago.
Many thanks for the rating. Post-termination restrictive covenants are a rather common occurrence in employment relationships. An employer would want to protect their business from a departing employee's knowledge, business connections, influence over remaining staff, etc. However, a covenant that restricts an employee's post-termination activities will be automatically unenforceable for being in restraint of trade, unless the employer can show that it was there to protect a legitimate business interest and did so in a reasonable way.Legitimate business interests (LBIs) are commonly accepted to include:• Goodwill (including supplier and customer connections)• Trade secrets and confidential information• Stability of the workforceAn employer cannot apply a restrictive covenant just to stop someone competing with their business, but it can seek to stop that person using or damaging their LBIs by using a reasonably drafted covenant. Non-competition covenants, such as the one you have, prevent an employee from working with a competing business or setting up to work in competition with their ex-employer. Such general restrictions are seen as a restraint of trade and will be difficult to enforce. They will only be seen as reasonable if in the process of working in competition, the employee uses trade secrets or sensitive confidential information belonging to their ex-employer, or their influence over clients is so great that such a restriction is necessary. The length of the restriction and its geographical coverage will also be relevant. Whilst restrictive covenants are mainly used as a scare tactic by employers, if an employee has acted in breach of a covenant and the employer is intent on pursuing the matter further they can do so. The following are potential outcomes if the employer takes legal action:• Obtain an interim injunction preventing the employee from doing certain things that would make them in breach of the restrictive covenant• Seek compensation for damages that have directly resulted from the breach of the covenantsAs you can see there are no hard and fast rules on restrictive covenants. Whether a specific restriction is enforceable will always depend on the individual circumstances, the interest being protected and whether it has been reasonably drafted. The above principles are what the courts will consider when deciding whether a restriction is going to be legally enforceable. It should give you a good idea of what to look for in your situation and decide what the chances of this being pursued further are.Hope this helps.
Customer: replied 1 year ago.
ok, so the part of the business I run is closing down totally and they will not be offering the services to any of there customers as it isn't their main stay service offering so I will not be offering anything they will... they previously bought the company from me, dissolved the company and transferred it into an asset in the business.. so I then became a director with no share holding and an employee...
Expert:  Ben Jones replied 1 year ago.
If you are not going to affect their business by taking away clients or driving business away, then it will be difficult for them to enforce.
Customer: replied 1 year ago.
thank you
Expert:  Ben Jones replied 1 year ago.
You are welcome, all the best

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