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AlisonSolicitor
AlisonSolicitor,
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Ben. A quick question.. what compensation would a self

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Hi Ben. A quick question.. what compensation would a self employed sales agent with 4 years service be entitled to if they are to be let go ? Thank you
JA: Has the agent discussed the termination with a manager or HR? Or with a lawyer?
Customer: No discussions have taken place
JA: Does the workplace operate with employees, freelancers, consultants, contractors or with unionised employees?
Customer: It's a freelance sales agent
JA: Is there anything else the Lawyer should know before I connect you? Rest assured that they'll be able to help you.
Customer: That's fine Pearl . Thank you
Hello,

I've been working hard to find a Professional to assist you with your question, but sometimes finding the right Professional can take a little longer than expected.

I wonder whether you're ok with continuing to wait for an answer. If you are, please let me know and I will continue my search. If not, feel free to let me know and I will cancel this question for you.

Thank you!
Customer: replied 19 days ago.
Please let me know how long I have to wait.. it seems s straightforward question .I'm surprised at not receiving an answer. Thank you,John.

Hello, my name is***** hope you are well today. I am a qualified Solicitor, and I will be able to help you by providing you with an answer to your question today. I specialise in UK and Irish Law. I am not always online but rest assured if I do not respond immediately I will respond when I return.

Is there anything else you feel is relevant to your question or anything else you would like to add before we continue?

Customer: replied 19 days ago.
Thank you Alison.
I'm looking forward to your answer. Best Regards. John.

Generally, Freelance workers are not considered by law as "employees". You are considered as "self-employed". You do not usually enjoy the rights and privileges of that an "employee".

However, you are still legally protected by the terms of your contract with your client. Your employer will have to comply with the terms of your contract on how to end the working relationship.

Have you checked your contract on the benefits that are entitled to you as a freelance sales agent?

Customer: replied 19 days ago.
Hi Alison . There is no written contract but I'm aware that an agent is entitled to compensation . I was wondering what that compensation was. 6 months earnings , a year??

Can you please tell me what the reason would be for your dismissal from your employer?

Customer: replied 19 days ago.
Hi Alison, thank you for the swift response. I am the person who employed the agent. I am employing other agents but want to know the possible pitfalls.. Reason to change an agent would be if a better agent became available ,who would increase sales.
Thank you.

Within Ireland, only employees with two or more years of continuous service are entitled to redundancy/severance pay. For staff members with two or more years of continuous service, as a minimum, you must pay a statutory severance payment; calculated as two weeks’ pay for every year of service, and one further week’s pay. This is paid tax-free but is capped at €600 per week.

A freelance sales agent does not fall within the meaning of an "agency worker" who is entitled to redundancy pay.

As such, self-employed or freelancers are not provided by law a right against unfair dismissal (after two years of service) and statutory redundancy pay (after two years of service).

Is there anything else I can help with today?

Customer: replied 19 days ago.
The agent us working in the uk and I'm pretty sure is entitled to compensation if the agency is terminated.

Then I believe that your agent would fall under the definition of a "commercial agent". A self-employed intermediary who has the authority to negotiate and conclude the selling or buying of goods on behalf of another person (you).

Customer: replied 19 days ago.
I'd agree Alison

Where you terminate the agency agreement (other than where it has done so for the agent's breach), you will be required to make mandatory payments to the agent by way of compensation for the loss of its business. This is called a "compensation" or "indemnity" payment and which one applies will depend on what the parties did (or did not) elect in their contract and/or what the applicable law is.

In your circumstance, there is no contract, then the compensation alternative will apply by default. This is not a difference without a distinction: while both payments are intended to compensate you agent for the goodwill he has generated for you – the fruits of which you will continue to enjoy in the future, but which the agent will not – they are calculated very differently.

The indemnity is payable if and to the extent that the agent has introduced new customers (or significantly increased business from existing customers) and it is calculated by reference to the agent's average commissions over the previous 5 years, capped at 1 year.

Compensation is calculated by reference to the loss of the value of the agency. The value of the agency is the amount that a hypothetical purchaser would be willing to pay for it at the date of termination.

Usually, a Valuation Expert would be appointed to value the business for the purposes of determining the appropriate level of compensation to be paid. Generally, if the business is a successful one, then the compensation alternative will usually work out to be more expensive for a principal than the indemnity alternative.


Do know that there is also a Notice Period that you must give your agent if you wish to terminate your relationship.

The minimum notice periods in England are:

  •  one month for the first year, 
  • two months for the second year, and 
  • three months for the third year or thereafter.

Is there anything else I can help with today?

Customer: replied 19 days ago.
Thank you. That sounds like a reasonable answer
I appreciate your help..
Best Regards
John.

No problem. Thank you for your enquiry today, please do not hesitate to contact us in future if you have further enquiries.

Customer: replied 19 days ago.
Thank you. I will.

Thank you for your question on JustAnswer. We are always available to help and please do let me know if you have any other questions I can answer for you.

AlisonSolicitor,
Satisfied Customers: 70
Experience: Expert
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