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PSA - FAQ

•    What does the PSA stand for?
•    8 Reasons to join the PSA
•    I want to join the Professional Sales Association (PSA)
•    Who are the main contacts within the PSA?
•    I want to visit the next PSA Legal Seminar
•    Where and when are the Regional Branch Meetings Held?
•    I want to contact the PSA for more information
•    I would like to ask the PSA a question
•    I have a problem with my Principal – how can the PSA help me?
•    I would like to view the details of the Commercial Agents Regulations  (1993)
•    I am a salaried salesperson – what can the PSA offer me?

•    Indemnity or compensation?
•    How long do I have to pursue my claim to compensation or indemnity?
•    My principal terminated my agency on 14 February. How much notice am I entitled to?
.    I have two different agencies selling furniture, which to the naked eye look similar; however, one is made from hardwoods and the other has a foil finish. The two ranges occupy different price points and retailers are happy to stock both alongside each other. In my eyes they do not compete and I can sell in both at the same time without compromising the interests of either principal; however, the foil furniture manufacturer is now questioning my involvement with the hardwood agency. Is there a risk that my agency could be terminated on the grounds that the ranges compete?
•   
I have a written contract, which refers to a fixed 24 month term. Things are going well and that term has now expired. What is the contractual position now?


.    What does the PSA stand for?
The Professional Sales Association has over 2000 members who are, in the main, self- employed salespeople more often known as Sales Agents.
We protect the rights of our members in disputes with Principals and can offer both advice and, if necessary, legal assistance in resolving the dispute.
We have regular Branch meetings throughout the UK and we also hold Legal Seminars.
Employed salespeople are also welcome as members and we can offer assistance with any disputes with your employer.

•  .  I have a problem with my Principal how can the PSA help me?
Contact the PSA via our email address (psa@unitetheunion.org) and let us know that you a have a dispute with one of your Principals and we will send you a PSA Legal Advice Sheet which should be completed and returned to us.

The completed sheet will be forwarded to the Solicitor who covers your area and then you will be contacted direct by this Solicitor who will offer advice.

It is normally recommended that you do not enter into any written correspondence with your Principal prior to receiving legal advice.

•  .  I am a salaried salesperson – what can the PSA offer me?
The PSA has helped many of our members who are employed. The PSA has access to Unite specialists & solicitors who are knowledgeable in current employment law.

Nobody wishes to have a dispute with their employer but if a situation arises that you feel you are on your own and you are being victimised – then you have the knowledge that you have the resources of the UK’s largest union, Unite, at your disposal. In the first instance contact your Branch Secretary for advice.

•  .  Indemnity or compensation?
In the UK parties have a choice when drafting a contract to elect for the indemnity provisions to apply. Regulation 17(2) provides, 'except where the agency contract otherwise provides, the commercial agent shall be entitled to be compensated rather than indemnified'. If the parties make no election within the contract, or there is only a verbal agreement and the point is not discussed, then the fall back position is that compensation shall apply. The majority of cases feature compensation entitlements. The UK regulations are unique in the European landscape in that they allow parties to choose compensation or indemnity. All other countries, save for France, provide for payment of an indemnity. Broadly speaking, there is no cap on compensation payments, whereas the indemnity regime is highly structured and a payment is capped at the average of the past 5 years’ commission income or a one year average for any lesser period.

•  .  How long do I have to pursue my claim to compensation or indemnity?
The Regulations specify that the period of notice shall be— (a)1 month for the first year of the contract; (b)2 months for the second year commenced; (c)3 months for the third year commenced and for the subsequent years; and the parties may not agree on any shorter periods of notice. Therefore, assuming that you have acted as agent for more than 2 years then lawful notice will expire on 31 May. This is subject to the following points: 1. If you have contracted for a greater period of notice, say, for instance, 6 months, then the period of notice will expire on 31 August; and 2. If the parties have agreed that the period of notice need not coincide with the end of a calendar month, then notice would expire on 14 May and 14 August respectively. It is important to remember that you are lawfully entitled to “work your notice” rather than being unceremoniously dumped at a moment’s notice, unless, of course, you reach an accommodation with the principal and are content to cease acting with immediate effect. Equally, you are obliged to continue acting dutifully and in good faith for the entire notice term – right until the very last day. You may wish to agree a form of wording with your principal for an announcement to be sent to the trade; typically something courteous and upbeat – “Inky Pens Ltd wish to thank Mr Quill for all of his hard work over the last 5 years. We will shortly announce his successor and you can be assured of our commitment to the same excellent levels of service”. Unless those sentiments simply don’t exist!

.• .   My principal terminated my agency on 14 February. How much notice am I entitled to?
The Regulations specify that the period of notice shall be— (a)1 month for the first year of the contract; (b)2 months for the second year commenced; (c)3 months for the third year commenced and for the subsequent years; and the parties may not agree on any shorter periods of notice. Therefore, assuming that you have acted as agent for more than 2 years then lawful notice will expire on 31 May. This is subject to the following points: 1. If you have contracted for a greater period of notice, say, for instance, 6 months, then the period of notice will expire on 31 August; and 2. If the parties have agreed that the period of notice need not coincide with the end of a calendar month, then notice would expire on 14 May and 14 August respectively. It is important to remember that you are lawfully entitled to “work your notice” rather than being unceremoniously dumped at a moment’s notice, unless, of course, you reach an accommodation with the principal and are content to cease acting with immediate effect. Equally, you are obliged to continue acting dutifully and in good faith for the entire notice term – right until the very last day. You may wish to agree a form of wording with your principal for an announcement to be sent to the trade; typically something courteous and upbeat – “Inky Pens Ltd wish to thank Mr Quill for all of his hard work over the last 5 years. We will shortly announce his successor and you can be assured of our commitment to the same excellent levels of service”. Unless those sentiments simply don’t exist!

• .   I have two different agencies selling furniture, which to the naked eye look similar; however, one is made from hardwoods and the other has a foil finish. The two ranges occupy different price points and retailers are happy to stock both alongside each other. In my eyes they do not compete and I can sell in both at the same time without compromising the interests of either principal; however, the foil furniture manufacturer is now questioning my involvement with the hardwood agency. Is there a risk that my agency could be terminated on the grounds that the ranges compete?
This is a historic issue borne of the fact that many agents carry a smorgasbord of products intended to appeal the same customers they call upon. An example might be an agent selling to a sports shop and carrying a tennis racket range for one principal, football boots for another, and shuttlecocks for yet another. In this example it is easy to see that the agent can embark on a call without worrying about whether he will prioritise one range over another because they are all entirely distinct products and there will be no conflict in the mind of the buyer. The furniture example is more challenging and requires a closer analysis. The High Court considered this issue in the case of Rossetti Marketing Ltd v Diamond Sofa Company Ltd & Anor [2011] EWHC 2482 (QB) (03 October 2011) and found in favour of the agent on a preliminary issue, noting “An implied term of the agency contract between SML/RML and Diamond was that SML/RML could act for a number of principals, and those principals could be in competition with each other, in the manner defined earlier in the judgment.” However, this was successfully appealed and a strong Court of Appeal judgment means that the principal’s fully informed consent is required. The court found “The oral evidence established that, from 2006, Diamond knew about, and did not object to, SML acting for Cassaredo and Creative. However, it also seems that Diamond was led to believe that those companies' products did not clash with those of Diamond. Accordingly, while there may be said to have been informed consent on the part of Diamond to SML acting for Creative and Cassaredo in relation to non-clashing furniture, such as motion furniture (i.e. furniture with moving parts – headrests, footrests etc), there was no informed consent to SML acting for those two companies in relation to furniture which clashed with that of Diamond.” The judgment records its finding of the legal position on this point to be that: “An agent can act for two principals with conflicting interests in two types of case. The first is, as already indicated, where both principals agree. In such a case, it is for the agent to show that the principal not merely consented, but that the consent was given on a fully informed basis – i.e. that the agent had made full disclosure to the principal... The second type of case where an agent can act for competing principals is where …the principal must have appreciated that the nature of the agent's business (in that case a residential estate agent) is 'to act for numerous principals'. ...” The law is therefore very clear that fully informed consent is required to enable the agent to carry competing products for different principals. This probably means more than pointing out “well, he must know as he saw me on their stand at the Bread and Butter exhibition!”

• .   I have a written contract, which refers to a fixed 24 month term. Things are going well and that term has now expired. What is the contractual position now?
Regulation 14 deals with this point and provides that “an agency contract for a fixed period which continues to be performed by both parties after that period has expired shall be deemed to be converted into an agency contract for an indefinite period.” Therefore your contract will simply continue to run until either party serves notice to terminate. The standard periods referred to in Regulation 15 will apply (up to 3 months) or conversely if you have committed to a greater period in the contract (i.e. 6 months) then this will apply. All of the other contractual terms will continue to apply, for instance payment at 10% of invoiced price (or whatever the rate is), and exclusivity in relation to the Midlands (or some other) territory.