VIC Employment Law - Bought Shares for Employment - How to Get Investment Back?

[Brett D]

Hi,

I have a query about being forced to buy shares (invest) in a private company as a condition of gaining employment in that company.

I wanted the position so I bought $50k worth of company shares. I have since been terminated by the company and no longer have employment but when I asked them to buy the shares back, they said the shares are separate to employment so they would not buy them back.

It was made very clear by all three company directors and the executive chairman that "no investment, no job" was the situation. The company was looking for employees who had 'skin in the game' (their words).

I have now been told that I am free to do whatever I want with my shares, keep them, buy more, sell them to another investor (but without the job) I feel that this company has taken my 50k investment and then, 10 months later, terminated my employment contract.

I am not concerned about losing my job, but I do want my investment back and am seeking legal help as to the best way to proceed.

The company is a Victorian company but I live in Brisbane and ran the now defunct Brisbane office of the company.

 

[Rod]

Hmm, sounds like you need legal advice. Something doesn't seem right here but I can't put my finger on what law might have been broken.

Corporate law? Civil wrong? Contract? Employment law?

Did you sign a shareholders agreement? Does the company have a constitution? What does your employment contract say about shares? What was the period of employment in your employment contract? How long ago did they sack you?

Case against you - Voluntary assumption of risk.

 

[Brett D]

Hi Rod,
Thanks for your reply, in answer to your questions:

Did you sign a shareholders agreement?

No, but I was issued with a share certificate and have check that I am on the share holders register with ASIC

Does the company have a constitution?

Yes, they do

What does your employment contract say about shares?

Employment contract does not have anything regarding shares, the 'no shares, no job' was verbal and over email

What was the period of employment in your employment contract?

Employment contract just had a start date with no finish date

How long ago did they sack you?

4 weeks

 

[Rod]

Hmm, you're beyond the 21 days for an unfair dismissal claim.

Was the period of employment mentioned/agreed to outside of the employment?

The rest I can't help with. Maybe see a lawyer. With $50K at stake you may need some advice.

 

[Brett D]

Hi Rod,

I am not concerned about unfair dismissal. I'm actually glad not to be associated with the company anymore as they proved themselves to be quite unethical in many dealings over the 10 months I was running the Brisbane office, but I do wish to recoup my 50k.

I have not given up on negotiations with them as yet, but would like to know if the investment as a condition of employment is legal, because if it is not, a) Will weight my chances of a favourable outcome, and b) If I cannot come to an agreement with them myself will happily engage someone to act on my behalf.

I am hoping this forum will give me some idea of that legality.

The period of employment was simply 'ongoing'.

 

[Serge Gorval]

Hmm, you're beyond the 21 days for an unfair dismissal claim.

Was the period of employment mentioned/agreed to outside of the employment?

The rest I can't help with. Maybe see a lawyer. With $50K at stake you may need some advice.

I'm pretty certain that this is not a matter for the Fair Work Commission but will be best for a wrongful dismissal in the courts...

As I see it you several issues:

1. termination of employment/ breach of contract claim ( doesn't seem to be an issue for you however could be a good way to "twist their arm to buyback their own stock)

2. assuming you are a minority shareholder, Corps act - oppression of minority shareholders -

3. misrepresentation/ estoppel claim. - difficult without evidence.

 

[Brett D]

Hi Serge,

Thank you for the help, I appreciate it.