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Jo C.
Jo C., Barrister
Category: Law
Satisfied Customers: 32086
Experience:  Over 5 years in practice
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A free agent working for a U.K. Company has been terminated

Customer Question

A free agent working for a U.K. Company has been terminated after 34 years. How much severance pay is he entitled to?
Submitted: 3 years ago.
Category: Law
Expert:  Ben Jones replied 3 years ago.

Ben Jones :

Hello, my name is Ben and it is my pleasure to assist you with your question today. When you say a free agent, can you please explain the working relationship of this person in a bit more detail?

JACUSTOMER-krnwowip- : He is an agent for a European alcoholic beverage company. He is the only agent in Europe representing this company. He has been a free agent for this company for 34 years. Recently he was terminated, and will finish the end of this year. They said he is entitled to 6 months or a year pay, unless found in U.K. court where he would be entitled to more.
JACUSTOMER-krnwowip- : He supplied alcoholic beverages to duty-free shops in airports.
JACUSTOMER-krnwowip- : I received an email saying you have answered my question, but there is no reply.
Ben Jones :

Hi, sorry not sure why you received such a notification as I have not posted a response yet. So I assume that he was working on a self employed / contractor basis, rather than being an employee of the company?

JACUSTOMER-krnwowip- : Yes, he made a percentage of what he distributed. He was not an employee.
Ben Jones :

Thank you. As he was not an employee he would not be entitled to any redundancy pay and also he would not be covered by rules giving him a minimum notice period on termination. Under law, only employees are entitled to receive a minimum notice period in the event that their employment is terminated by their employer. The self-employed do not have the legal right to minimum notice periods on termination.

Whether a self employed worker is entitled to a notice period will depend on their contract. If there is a termination clause that specifies a notice period on termination, the employer would be expected to give that notice if they wish to end the employment relationship.

However, it is often the case that no written contract exists, or there is no notice clause in it. In such situations, the worker can still expect a 'reasonable' notice period to have their employment terminated. This is because even in the absence of a written contract they will be working under an implied common law contract and to terminate such a contract a reasonable notice period is required. The only exception is if the contract was terminated because of gross misconduct, that is any misconduct serious enough to justify the employment relationship terminating immediately.

What is a reasonable notice period will vary greatly and will depend on the individual circumstances, industry practices, length of employment, frequency of payment, etc. There are far too many variables to consider, which means it is usually impossible to give a precise indication as to what would be reasonable in each case. It is therefore down to the courts to make that decision. Due to the relatively long length of service in this case you would be expected to give a longer notice period than usual, several months at least but again there is nothing in law that specifies the length you must give and this is something to be negotiated between you and the employer and to try and get something which is acceptable by both. If that is not possible then the employee could potentially challenge this but they have to take the matter to court and argue that they should have been given a longer period and hope that the court agrees with them – the outcome of such a claim is impossible to predict.

Hope this clarifies your position? If you could please let me know that would be great, thank you

JACUSTOMER-krnwowip- : Ben, actually, the main question I had was not so much the termination notice, but how much severance pay he is entitled to. The company told him they can give him 6 months pay or 12 months pay, then end the contract. They said they would give him 12 months pay. The question is, is he entitled to more than 12 months pay because of the 34 years. 12 months pay at the end of 34 years does not sound fair. Is there any court precedent that has allowed more? Thank you.
JACUSTOMER-krnwowip- : Ben, the pay is called compensation pay, not severance pay, if that helps.
Ben Jones :

There is no severance/compensation pay entitlement in the circumstances - only notice pay. Self employed workers do not have any entitlement to severance pay. This could be a contractual entitlement but in the event that no such entitlement is mentioned in there, then the employer is not obliged to pay any severance.

JACUSTOMER-krnwowip- : So them offering him 12 months compensation pay is just their decision only. This person would have no recourse?
Ben Jones :

yes that is correct - they are simply entitled to a notice period as explained above - after that any payments are made at the employer's discretion.

JACUSTOMER-krnwowip- : thank you so much Ben
Ben Jones :

you are most welcome, all the best

JACUSTOMER-krnwowip- : Ben, I have one more follow up question re this compensation pay. I now understand the law is that they must give him 6 - 12 months compensation pay. The question now, is there any court decision that has allowed more than what the law says? For example, a court has said because of the long period of time this person has represented this company, he is awarded mor than the 6 - 12 months compensation. Can you check that. Thank you.
Ben Jones :

Hi, what laws are you referring to please?

JACUSTOMER-krnwowip- : I'm really not sure what law, that is what he was told. That the law was, they only owed him 6 - 12 months compensation, unless he could find in the courts where a judgment allowed for more than 12 months compensation.
Ben Jones :

Well I have not heard of any law that states a self employed worker is entitled to any compensation apart from what is in his contract or what he is required as a notice period. So if he is claiming that then you have the right to ask him to refer you to the specific legislation which states that and then I can comment. Without it I cannot say any more than what I have said above unfortunately

Ben Jones :

Hi, any news on this by any chance?