I am a Self Employed Sales Agent. My main Principle wishes to terminate my Contract i have been with them for 5yrs average turnover @ 170k a year, 20% Commision rate. Sales are dropping this year but have remained otherwise consistant and i have acheived an average of 90% of target each year for 5yrs. What kind of Indemnity payment should i expect to receive? Thanks.
Province/Country relating to question: uk
Do you have a termination clause in your contract?
Not that i am aware of?
If a contract is terminated and there is no express termination clause that provides a specific notice period or termination payment, then it can usually be cancelled by giving reasonable notice. That would not necessarily include a severance payment though unless once was agreed in advance.
That essentially means that your contract can be terminated by giving you reasonable notice and either allowing you to work it out as normal.
What is reasonable notice really depends on the nature of your industry, accepted practices, etc. It varies greatly between industries and can be from a week to a few months. It may also depend on your seniority, how long you have been there, etc.
You should try and negotiate a mutually acceptable notice period and if you are unhappy with the period you have been given and can't reach an amicable solution - consider making a claim for breach of contract in the civil courts.
I hope this helps. Please press the ACCEPT button. You would still be able to ask any follow-up questions if necessary. Many thanks
Hi. This sounds more like a Employee Type Contract situation? I am Self Employed and there are two types of contract as far as i am aware? One pays Compensation (values your Agency like a Business) and the other an Indemnity Contract (as is mine). It states that i am entitled to one years commission payment based on an average of the past 5 years payments. But i am hearing that there might be an issue as to how much new business i have added? On this basis what should i expect to be offfered? Thanks.
My apologies, it's been a long day. Is your contract specifically an indemnity one?
Yes my Contract is an Indemnity one and i know the formula for calculating the Compensation. What i would like to know really is how set in stone so to speak things are or could the Principle try to get down the payment in any way that you are aware of? Thanks.
With an indemnity agreement, the employer pays an amount reflecting the value of the work you have done in building up their sales - for example, your efforts to identify customers and build relationships with them
This is set in stone in The Commercial Agents (Council Directive) Regulations 1993. Instead of me listing the exact wording you can check the specific provision here:
If they wanted to avoid making the payment then they would need to rely on the next provision:
I hope this clarifies things
Expert in UK Employment Law
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