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Dividends and Redundancy

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  • Dividends and Redundancy

    Hi All,
    Hope someone can help me. I have been employed by a group of companies for the last 8.5 years in the area of recruitment and hr. The last 4 years I have been a director of one company and paid a very low basic and top up monthly with dividend payments (being paid the same amount every month). I have a number of shares in this company/ I also have an employment contract in place which gives me employee employment rights and a three month notice period. I have had a major falling out with the managing director of the group as a result of my having to take a senior member of staff in one of the other companies through a grievance procedure and I have been made a bit of a scape goat when the grievance holder was persuaded to drop the complaint. The upshot is that the MD is trying to get rid of me either through my agreeing to a settlement agreement with redundancy being threatened if I do not agree. The amount I have been offered is far less than I would get through redundancy. My real concern is that my regular dividend payments will not be taken into consideration in any settlement or redundancy situation. Can anyone advise? I have been put on paid leave until he returns from holiday so everything is up in the air. I am worried though that come the end of this month I will be paid a fifth of what I normally get as he will seek to only pay me the basic. Sorry a bit of a ramble but I am having sleepless nights about all of this......

    I have recently employed an employment solicitor who says that I have a good case for unfair dismissal if it went to tribunal. However, I am worried that my MD may put the company into admin in which case I will get nothing. Should I go along the settlement agreement route and if so can I expect to get a sum inclusive of regular dividend amounts for loss of office?
    Last edited by purcy; 7th April 2014, 19:16:PM. Reason: No responses
    Tags: None

  • #2
    Re: Dividends and Redundancy

    just a quick question, are you a director of one of the employing companies, or a director of your own company employed by the other companies? whom do you have shares in, and who did you receive dividends from, your own company or the 1 or all of the other companies

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    • #3
      Re: Dividends and Redundancy

      Originally posted by strangewayofsavin View Post
      just a quick question, are you a director of one of the employing companies, or a director of your own company employed by the other companies? whom do you have shares in, and who did you receive dividends from, your own company or the 1 or all of the other companies
      I am a director of one of the employing companies but one of the other companies uses it's services for a fee every month. Also, one of the Groups major clients uses the company I am a director of for administration of invoices and services supplied by another company in the Group. Over the years my salary was paid without dividends until about 4 years ago when I was Made a director for the purpose of raising my salary through the dividend route. Money is regularly transferred from one company to another to keep them in the red. It is very confusing and messy I am afraid.

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      • #4
        Re: Dividends and Redundancy

        Originally posted by purcy View Post
        I am a director of one of the employing companies but one of the other companies uses it's services for a fee every month. Also, one of the Groups major clients uses the company I am a director of for administration of invoices and services supplied by another company in the Group. Over the years my salary was paid without dividends until about 4 years ago when I was Made a director for the purpose of raising my salary through the dividend route. Money is regularly transferred from one company to another to keep them in the red. It is very confusing and messy I am afraid.
        In view of the above, if it was me, I think I'd take the settlement since it's being offered. You may find it difficult to explain the above to an ET and it may even open a can of worms with regards to your company affairs.

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        • #5
          Re: Dividends and Redundancy

          I would agree with the above post, although I would read my contracts very carefully, JUST in case there was a breach of employment/employee rights laws, just because some of these big employers/companies seem to have everything covered it is sometimes silly things like, being in a position of control, will actually make you an employee and open up a new avenue of approach, your case may be different, but it will take research.

          Comment


          • #6
            Re: Dividends and Redundancy

            Originally posted by strangewayofsavin View Post
            I would agree with the above post, although I would read my contracts very carefully, JUST in case there was a breach of employment/employee rights laws, just because some of these big employers/companies seem to have everything covered it is sometimes silly things like, being in a position of control, will actually make you an employee and open up a new avenue of approach, your case may be different, but it will take research.
            I agree - I have a normal employment contract stating my salary with no mention of dividends so this in itself confirms my total remuneration. What I find quite unacceptable is that the settlement offer is half of what it should be if I was being made redundant and based on a salary which is not paid in dividends. Why would anyone accept a settlement figure which is less than what the statutory amount is + notice pay and sign away their employment rights? All this is being done without prejudice so I presume cannot be divulged if it goes to tribunal.

            My MD has gone on holiday for three weeks and put me on paid leave as I rejected his offer and he hasn't agreed to go any higher. Presumably this is tactical on his part to make me sweat and crumble. Pay day is at the end of the month so it will be interesting to see whether I get my normal salary amount or one which is minus the dividend amount. If this is the case then he will be paying me less than the minimum wage for a 40 hour week (could this be his downfall?).
            Last edited by purcy; 11th April 2014, 21:19:PM. Reason: edited to make sense -I hope!

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