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Smith v Reliance Water Controls [2003]

Facts

  • According to the County Court, Smith, in a sham agreement, agreed to become a self-employed contractor of commission to Reliance Water Controls Ltd as opposed to an employee, as he once was
  • Reliance Water Controls then dismissed Smith with inadequate grounds, and so was entitled to damages
  • Smith claimed that in becoming self-employed, he also became a commercial agent and was therefore entitled to remuneration in accordance with the Commercial Agents (Council Directive) Regulations 1993 (which would be greater than damages for employment dismissal)

Issue

  • Was Smith a commercial agent?

Decision

  • Yes

Reasoning

  • The County Court was correct in concluding that the motive for the agreement was a sham – Smith was trying to avoid debt collection
  • Although the motive was a sham, the details of the agreement were indicative of the creation of a commercial agent, entitling Smith to remuneration post-termination
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