Failure to apologise for abuse costs sales agent

An agent for a supplier of furniture failed to comply with changes requested by the supplier in working practices that required them to use computer rather than paper - the only one out of ten who did so. The supplier fined the agent who then rang and abused the supplier's managing director twice, and left an abusive message on his voicemail.

The managing director gave the agent the opportunity to apologise, but no apology was given. A purported letter of apology was sent six days later, but this contained excuses for the abuse, rather than an apology.

The agency agreement between them expressly required the agent to act in good faith and conscientiously, and stated that serious breach would lead to termination. The supplier terminated the agent's contract, and the agent claimed unlawful termination, arguing that the abuse amounted to a repudiatory breach of contract - a breach by the agent that was so serious that the relationship could not continue - and the supplier was therefore entitled to treat the contract as ended.

The court agreed. It said that abusive words spoken in the heat of the moment did not always amount to a repudiatory breach. If an apology was capable of remedying the situation, and a genuine apology was given, there would be no breach. However, in this case, the agent had not acted in the heat of the moment. His behaviour had been calculated and thought-out and therefore amounted to gross insubordination, and would lead to an irrevocable breakdown in the trust required if their relationship was to work unless there was an adequate apology. The agent's letter did not provide an adequate apology.

The same principles apply to abuse by an employer or employer.

Recommendation
Principals should give agents (and employers should give employees), a reasonable opportunity to apologise for behaviour that might amount to a repudiatory breach before terminating their agency agreement (or employment).

Case ref: Gledhill v Bently Designs (UK) Ltd 2010 AER 04