NSW Deed of Release presented under Duress

[firsttimefounder]

I have been a director of a company for nearly 3 years now. For a period of 1 year of which I was employed full time. During this past few months the company ran into some financial trouble and I cut my salary in half to try to keep things afloat to ensure the other staff could be paid and also did not draw a wage. My wages accrued on the balance sheet. All of the other directors in the business also took the same action.

We have now found funding but I have now decided to step down , transition the business to a new management team and exit the business as smoothly as possible. I simply cannot continue to not be paid or get deeper into debt.

The new management team have expected me to continue to work on transitioning the business to them and to come in to work at my own expense whilst the funding rolls in. I offered to do a month maximum in good faith. They have avoided discussions on my outstanding wages. They have however continued to pay other staff. They now wish for me to sign a deed of release upon which they will then release and advance my outstanding wages and entitlements in a proposed payment plan.

Can I be forced to sign a Deed of Release under what appears to be duress? I am not asking for any massive settlement simply my basic wages ( albeit half of what my original salary was) .

I now need to pay for legal advice to review the Deed, as I have no doubt it has got a whole lot of one sided clauses in it and I do not have money to actually pay to get the advice because I've not been paid.

Do I simply refuse and go to the Fair Work?

If they do not pay me and delay payment, will the new directors be liable?

 

[Rod]

I don't see any duress here. This is a simple commercial negotiation and as a director of a company you would be expected to have the commercial nous to negotiate on equal terms with the other side.

Read and understand the terms of release before signing it. A deed of release is a standard document and you are the one who should understand its content. It should be a mutual release so you are released from your obligations as of a certain date, using date of signing, but not always.

 

[Clancy]

You can look at a few samples of deeds of release on the internet and compare if there is anything abnormal in the deed they are offering you.

 

[firsttimefounder]

I don't see any duress here. This is a simple commercial negotiation and as a director of a company you would be expected to have the commercial nous to negotiate on equal terms with the other side.

Read and understand the terms of release before signing it. A deed of release is a standard document and you are the one who should understand its content. It should be a mutual release so you are released from your obligations as of a certain date, using date of signing, but not always.

Thanks so much. Would it be considered to be duress if they are refusing to pay me if I don't sign?

 

[Rod]

Unlikely, though without all the facts it is difficult to say with any certainty. Are you also a shareholder? Is there a sale of shares as part of the deal? A release, if it is a mutual release, can be to your advantage not just an advantage to them.

Depending on how much money is involved you may benefit from talking with a lawyer.

 

[Clancy]

Thanks so much. Would it be considered to be duress if they are refusing to pay me if I don't sign?

Well, you created the arrangement of not drawing a wage, did you set a time limit on that arrangement?

 

[Rod]

Suspect this gets complicated with the addition of a new source of funding. Someone needs to understand what conditions, if any were attached to the new funding, and how it is being spent to see if the OP is being unfairly treated or discriminated against in some way. Not really the kind of matter that can be solved in an online forum.