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Jenny
Jenny, Solicitor
Category: Law
Satisfied Customers: 6307
Experience:  Qualified Solicitor specialising in Employment Law and general legal matters. Please start your question For Jenny Only
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I am an employee of a financial services company

Resolved Question:

Hello,
I am an employee of a financial services company , one of whose clients I have been asked to stand for the position of Financial Director. I will receive no payment for this position and I will continue my employment and it is expected that my employer will continue to supply that company with financial services.
It is suggest that by becoming a Finance Director I will then be considered to have an implied service contract between me and the company I have been asked to serve as Director for the supply of financial services. I am concerned this would A) conflict with my work for my employer and B) Remove the protection of Indemnity Insurance etc that my present employer holds.
Is this correct?
Submitted: 1 year ago.
Category: Law
Expert:  Jenny replied 1 year ago.
Hello my name is ***** ***** I am happy to help you today. How has this arrangement come about? Is it through your employers request?
Customer: replied 1 year ago.

No not really - my employers is my wife's company ( I have no shares or interest other than employment ) and the company maintains PI Insurance which gives usual client protection. One of the directors of the client company now says that if I were to become a director then I would then be deemed to have a service agreement with them and all the financial services provided by me whilst working fro my employer would be removed from the protection of PI Cover and Limited Liability. I dispute this as in my view my wife's company remains the contractor to the client and I remain an employee of my wife's co. I cannot see that any sort of contractual arrangement , implied or otherwise has been created by accepting a directorship.

Expert:  Jenny replied 1 year ago.
Is this an executive directorship or is it a companies house directorship?
Customer: replied 1 year ago.

Companies House

Expert:  Jenny replied 1 year ago.
I do not think it would have any impact on PI cover as you are free to work in as many employments as you wish (from an insurance point of view) to be certain of this your wife can phone the broker to check.
If you are director only in name and you are not performing any duties for the company there is no implied service contract . You should be aware that you will have fiduciary duties as a director and could have some liabilities to the company.
Customer: replied 1 year ago.

By duty could you just confirm that attending meetings and commenting on reports - usual director fiduciary duty is not then an implied service contract

Expert:  Jenny replied 1 year ago.
fiduciary duty is not the same as an implied service contract. Fiduciary duties are implied duties that you owe to the company that you are a director of. In a nutshell they require you to act in the best interests of that company.
If you are providing services to another company that competes then potentially you are in breach of the implied duty. It is your wife's company who could take action in these circumstances, and this is unlikely due to your relationship but I think this may be what they are getting at.
Jenny, Solicitor
Category: Law
Satisfied Customers: 6307
Experience: Qualified Solicitor specialising in Employment Law and general legal matters. Please start your question For Jenny Only
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