Retirement – When & How?

Retirement – When & How?


Business owners routinely plan for their retirement, or otherwise develop exit or succession route strategies, and commercial sales agents will be no different as to that. As far as individual sales agents are concerned, however, a pertinent question to ask is as to whether they are fully aware as to the possibilities to claim compensation/an indemnity upon retirement under the Commercial Agents Regulations and, if so, how to proceed to go about that.


What I am referring to is the right of individual agents to retire in appropriate qualifying circumstances, and otherwise when, pursuant to Regulation 18(b) (ii) of the Commercial Agents Regulations, in consequence of their age, they cannot reasonably be required to any longer carry out their activities. Then, having duly retired, to claim the appropriate form and amount of compensation.


Obviously, the benefit to an agent of being able to retire as per the above scenario and (at the same time) to be entitled to claim a compensation payment, could be financially very significant indeed, and should consequently therefore be very much borne in mind, although carefully considered before being put into plan (both as to timing and, more generally, as to how the whole retirement strategy will be commenced and executed).


The above explained, the Commercial Agents Regulations unhelpfully do not actually specify any particular age when entitled agents are deemed to be sufficiently old (to then be able to rely on their age in retiring and claiming compensation), and whereas the Court’s controversial decision in the case from earlier this century of Abbott v Condici Limited and Another stated that, in general terms, a commercial agent cannot reasonably be required to continue his activities beyond what is recognised to be his or her appropriate retirement age (which the Judge decided in that case to be the then milestone age of 65), recognising what that retirement age is today (and setting aside the debatable Abbott decision) is not straightforward (not least because of the removal of the default retirement age, and the ongoing changes with the State Pension Age).


Given the above and bearing in mind the potentially significant financial pay-out possibilities in respect to retirement compensation, all circumstances need to be carefully considered before any steps are taken.


For example, if (before having taken specialist legal advice) an agent had already sent notices of retirement to each of his principals in circumstances where, for some legal reason, he subsequently discovers that he wasn’t actually going to be entitled (either at that point or ever) to any form of compensation (including because, as one example, he didn’t satisfy the test laid out in Regulation 18(b) (ii)) he wouldn’t subsequently then be able to retract the retirement notice without the relevant principal’s consent. In other words: – no entitlement to compensation, and now no longer any agency.


I should also make the point that for any agent who may have a written agreement with his principal, retirement might actually have been dealt with in that agency contract (e.g.:- setting out an agreed age for retirement) and so that it is important to understand what any written agreement may provide for, and consider that in the context of the Commercial Agents Regulations.


Other than considering and keeping in mind the above issues, the main factors in determining the amount of compensation or an indemnity under the Regulations are the same as they would otherwise be in respect to any other claim following the termination of an agency.


Finally, keep in mind also that potentially being entitled to retire from your agencies and receive compensation is one of the few exceptions to the ‘golden rule’ that agents should ordinarily never terminate their own contracts, and also that, in addition to compensation, entitled agents should also make sure that they are similarly aware as to the notice provisions of the Regulations, as well as their possible entitlement to claim for commissions in the pipeline as at the date of termination (retirement). In other words, it isn’t only about claiming money just for compensation.


The above all explained, the summary message is that making a claim for compensation on retirement could provide entitled agents with a well-earned financial pay-off, but, as always, and at the same time, remember to take legal advice before acting. 



© David Bentley, Bentley Agency Law Limited, Bentley & Co Solicitors, 7 Littlemoor Road, Pudsey, Leeds, LS28 8AF 

T: – 0113 236 0550 e-mail:-

The ONLY law which we practice is the law as it relates to commercial agents.

Please note that, as far as we can, we take cases on on a “success related fee”.

Please ensure that you obtain legal advice before acting in reliance upon anything in this article, particularly since each individual’s circumstances may necessitate a unique approach, and also on account of the fact that the law may of course at any time change. Furthermore, please be very clear that the answers given in this column may not cover or otherwise refer to all possible angles, aspects, relevant information and/or points of law and so that all or any information which is given above needs in every instance to be referred for legal advice for clarification and amplification, before being relied upon.

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