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Case Study: Defending An Employment Agency Against Breach Of Contract Claims


How Matthew Grant helped an employment agency, Starways, to defeat an opportunistic breach of contract claim by a disgruntled worker.

The situation

Starways arranged for Mr Smith to be placed within a pharmaceutical company in Germany to provide maternity cover for a provisional period of 12 months.

Like many agencies, Starways advertised the vacancy; they dealt with Mr Smith’s initial application for work; and they arranged for him to attend his interview.

On being offered this role, Starways put in place the necessary contracts – a framework agreement between themselves and the Pharmaceutical Company and then a Consultancy Agreement between themselves and a Pay Roll Company of which Mr Smith was a “representative”. Both contracts contained an early termination clause, permitting the pharmaceutical company to end the arrangement if they no longer needed Mr Smith’s services, and in turn allowing Starways to withdraw the work.

Mr Smith commenced this role and all went well – until 6 months into the arrangement when the Company underwent a restructure. As a result Mr Smith’s consultancy services were no longer required. The pharmaceutical company gave notice to Starways, and in turn Starways gave notice to Mr Smith.

Despite having received proper notice and also an ex gratia payment, Mr Smith remained unhappy that the arrangement had been ended before completion of the 12 months. He brought a claim in the County Court, alleging that Starways had misrepresented the Company’s intentions, breached the consultancy agreement, and acted in breach of fiduciary duty. Mr Smith sought loss of earnings for the remaining six months which, he valued at approximately £28,000 plus interest.

What Martin Searle Solicitors did

Mr Smith contacted our employment law team in Shoreham. Matthew Grant advised Starways carefully about the various aspects of the claim, and also the risks, procedure and likely costs the agency would face in defending the claim. Matthew agreed a strategy with Starways to dispose of Mr Smith’s claim as quickly as possible.

Matthew drafted a robust defence setting out the technical legal issues. He also wrote to Mr Smith explaining why his claim was unlikely to succeed and threatening to apply for Summary Judgment and indemnity costs.

The result

Mr Smith immediately agreed to discontinue his claim, leaving Starways with minimal legal fees to pay.

The Director of Starways commented:

“I am grateful to Martin Searle Solicitors for helping my employment agency to flush-out an opportunistic County Court claim by an ex-worker. Matthew Grant’s expert grasp of specialist employment contracts, his careful tactics and a ‘no nonsense’ approach towards the opponent made him realise what he was up against. This led to the claim being resolved in our favour extremely quickly and at minimal cost, whilst preserving our reputation. I would definitely recommend Martin Searle Solicitors to recruitment agencies and employers faced with complex or sensitive claims”.

To speak to a specialist employment lawyer about breach of contract terms, contact us today on 01273 609911, or email info@ms-solicitors.co.uk.

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