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Ben Jones
Ben Jones, UK Lawyer
Category: Law
Satisfied Customers: 44929
Experience:  Qualified Solicitor - Please start your question with 'For Ben Jones'
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I have been asked to sign a contractor service agreement and

Customer Question

Hi,
I have been asked to sign a contractor service agreement and am concerned as per notes below;
Current situation:
Worked here since 22 Apr 2014 - Sandhurst Flooring turnover was approx. £300k
Had verbal agreement to work for £100 per day to grow business with negotiations based on my success
Was given a bonus structure based on turnover and moved to £20/hr + 5% of turnover bonus
Had meetings with tax accountants with him to discuss shares for me
He changed the bonus to net profit as I would have gotten too much
Was awarded a £24.5K bonus based on net profit as we turned over £1.5m last calendar year
Was given £3500/month since 1st Jan 2016 with a bonus structure of half net profit
He started negotiations for funding with a Company who offered to buy all his shares 2 months ago secretly
Announced to me 3 weeks ago and asked my thoughts
Said I would be on same or better package and he would look after me
I have had verbal assurance of a share of sale price if company sold
I have still not met any member of this company
Yesterday he gave me the below General Service Agreement and asked for immediate signature
Points that concern
Confidentiality
13. Confidential information (the "Confidential Information") refers to any data or information relating to the Client, whether business or personal, which would reasonably be considered to be private or proprietary to the Client and that is not generally known and where the release of that Confidential Information could reasonably be expected to cause harm to the Client.
14. The Contractor agrees that they will not disclose, divulge, reveal, report or use, for any purpose, any Confidential Information which the Contractor has obtained, except as authorized by the Client or as required by law. The obligations of confidentiality will apply during the term of this Agreement and will survive indefinitely upon termination of this Agreement.
15. All written and oral information and material disclosed or provided by the Client to the Contractor under this Agreement is Confidential Information regardless of whether it was provided before or after the date of this Agreement or how it was provided to the Contractor.
Ownership of Intellectual Property
16. All intellectual property and related material that is developed or produced under this Agreement, will be the sole property of the Client. The use of the Intellectual Property by the Client will not be restricted in any manner.
17. The Contractor may not use the Intellectual Property for any purpose other than that contracted for in this Agreement except with the written consent of the Client. The Contractor will be responsible for any and all damages resulting from the unauthorized use of the Intellectual Property.
Return of Property 18. Upon the expiry or termination of this Agreement, the Contractor will return to the Client any property, documentation, records, or Confidential Information which is the property of the Client.
Capacity/Independent Contractor
19. In providing the Services under this Agreement it is expressly agreed that the Contractor is acting as an independent contractor and not as an employee. The Contractor and the Client acknowledge that this Agreement does not create a partnership or joint venture between them, and is exclusively a contract for service.
Notice
20. All notices, requests, demands or other communications required or permitted by the terms of this Agreement will be given in writing and delivered to the Parties of this Agreement as follows:
Indemnification
21. Except to the extent paid in settlement from any applicable insurance policies, and to the extent permitted by applicable law, each Party agrees to indemnify and hold harmless the other Party, and its respective affiliates, officers, agents, employees, and permitted successors and assigns against any and all claims, losses, damages, liabilities, penalties, punitive damages, expenses, reasonable legal fees and costs of any kind or amount whatsoever, which result from or arise out of any act or omission of the indemnifying party, its respective affiliates, officers, agents, employees, and permitted successors and assigns that occurs in connection with this Agreement. This indemnification will survive the termination of this Agreement.
Dispute Resolution
22. In the event a dispute arises out of or in connection with this Agreement, the Parties will attempt to resolve the dispute through friendly consultation.
Questions:
Do I have any rights?
Will prospective buyer still purchase with my situation?
I believe I will not qualify for TUPE?
Regards,
Mark Marshall
077488 00075
Submitted: 5 months ago.
Category: Law
Expert:  Ben Jones replied 5 months ago.

Hello just to clarify you are self employed rather than an employee?

Customer: replied 5 months ago.
but have never signed any kind of paperwork
Customer: replied 5 months ago.
My concern is now the company has sold I am now being asked to sign and the agreement which I attached seems like I am signing away any claim to a company I helped build up and also seems to say if I decided not to move to the new company on PAYE I could not set up on my own?
Customer: replied 5 months ago.
The Director of the selling company where I am now seems to be panicking and I'm wondering if the buying company would still purchase in these circumstances? Would you say I need to get a satisfactory contract with the Newco before I sign this agreement? In other words is it more beneficial for me not to sign and have I got a case to sue if he asked me to leave for not signing?
Expert:  Ben Jones replied 5 months ago.

Hello sorry I was offline by the time you had replied. You will only be protected under TUPE if you are an employee rather than self employed. So the first thing you need to work out is what your employment status is. You may have been referred to as self employed but in reality could be an employee and vice versa. There is no specific test you can use to determine this unfortunately and only a court can decide that. However, you can look at the common factors to try and work out what you are most likely to be. It is best if you Google for ‘employment status indicator’ and take the short test which can give you an indication based on your situation.

Secondly, even if you were an employee, TUPE would not apply on the sale of the business by sale of its shares. So if the current owner is selling their shares and that is how the business is sold TUPE will not apply.

In terms of the agreement offered no one can force you to accept or sign that. However, if you do not do so they could seek to terminate your employment, which they can do quite easily if you are a contractor and even as an employee who is jot protected under TUPE. So it is for yourself to decide whether the terms are acceptable to you or if you wanted to try and negotiate further with them for an improvement. However, this whole rushing may suggest they are trying to get this resolved for one reason or another, whether to make the company more attractive to the buyer or because they have already raised this as an issue. In that case you would try and use this apparent desperation to your advantage when negotiating.

Whether the buyer will purchase with your situation is entirely up to them. One person may not see this as a big issue, another may see it is a big one. So it depends on the individual behind the purchase. I would certainly not say that your situation will automatically affect the purchase but it is how the new owner would see this and that is a personal decision for this.

This is your basic legal position. I have more detailed advice for you in terms of the rights you have on termination of a service contract, which I wish to discuss so please take a second to leave a positive rating for the service so far (by selecting 3, 4 or 5 stars) and I can continue with that and answer any further questions you may have. Don’t worry, there is no extra cost and leaving a rating will not close the question and we can continue this discussion. Thank you

Expert:  Ben Jones replied 5 months ago.

Hello, I see you have read my response to your query. Please let me know if this has answered your original question and if you need me to discuss the next steps in more detail? In the meantime please take a second to leave a positive rating by selecting 3, 4 or 5 starts from the top of the page. The question will not close and I can continue with my advice as discussed. Thank you

Expert:  Ben Jones replied 5 months ago.

Hello, do you need any further assistance or are you happy with the above response? Look forward to hearing from you.

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