The defendant employed the claimant as an insurance agent on commission, to be calculated by reference to premiums paid to the defendant for the first ten years under any policy which he had procured. A clause of the contract stated that, if in certain circumstances he left the defendant’s employment, it would, subject to a proviso, continue to pay him commission in respect of premiums thereafter paid to it for the first ten years under any policy which he had procured. The proviso was that this post-employment commission would cease if he began to work for another insurance company. The claimant left the defendant’s employment and began to work for another insurance company. The defendant refused to pay him further commission. In his claim for payment of it he contended that the proviso was in unreasonable restraint of trade and thus void and that it should be severed and removed from the remainder of the clause, which should continue to entitle him to the commission.
Held: His claim succeeded. The Court rejected the defendant’s contention that if, which it had denied, the doctrine against restraint of trade applied at all, the whole clause, including for the payment of further commission, was void. Following a survey of the authorities, the deputy judge concluded at para 19 that the proviso could be removed from the remainder of the clause since (1) there was no need to add to or modify the wording of the remainder, (2) the remainder continued to be supported by adequate consideration and (3) the removal did not ‘so change the character of the contract that it becomes ‘not the sort of contract that the parties entered into at all”.
Mr Peter Crawford QC
1988] IRLR 388
England and Wales
Cited – NM Financial Management Limited v Marshall CA 13-Mar-1997
The court considered a provision that a commission agent would be paid commission following the termination of his agency provided that he did not within a year become an independent intermediary or work for a competitor. Here the suspension of . .
Cited – Tillman v Egon Zehnder Ltd SC 3-Jul-2019
The company appealed from rejection of its contention that its former employee should be restrained from employment by a competitor under a clause in her former employment contract. The court particularly considered the severability of a section . .
Lists of cited by and citing cases may be incomplete.
Updated: 11 April 2022; Ref: scu.675716