Commercial contracts often endure harmoniously for many years, but their longevity can make termination acrimonious, that was the case for an employment agency that provided staff to a retailer for more than 20 years prior to its replacement following a tendering exercise.
The agency had provided its services under a poorly drafted contract, replete with grammatical errors. This contract served to fuel the dispute, which focused on the transfer of more than 160 agency staff to the rival that replaced it, under the Transfer of Undertakings (Protection of Employment) Regulations 2006 which meant those employees continued to work in the retailer’s shops.
After the agency launched proceedings against the retailer, the High Court found that on a true interpretation of the contract, the agency was entitled to receive transfer or introduction fees in respect of the transferred workers. The retailer’s counter-claim that it had been overcharged by the agency was rejected and it was also ordered to pay more than £68,000 in satisfaction of the agency’s outstanding invoices. Although the exact amount of the agency’s award has yet to be calculated, it valued its claim at more than £550,000, before interest.
It pays to have your commercial contracts reviewed by a Solicitor before you sign them. As this case proves, failure to do so can lead to costly damages in the event of a dispute.
For advice on any employment law matter, please contact our employment team on 0121 746 3300 or fill in our online enquiry form if you need further assistance.
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