Self Employed Contract Questions

[suiyat]

Hi All

I have frequented this site a few times, but this is the first post I am making on behalf of my cousin.

He is qualified Personal Trainer, and works at a friends successful gym for a number of years as an instructor. Just over 12 months ago, he was offered the chance to go self employed, but stay at the gym, thinking this would be more beneficial.

So, in April 2019, a contract was drawn up by the gym owner for a Freelance PT, which looking at it looks very biased towards the gym.

My cousin being as he is, took the contract in good faith with the owner who is a 'friend' and signed it with no quibbles, but after realising how much he has given over of potential income over the first 12 months, is now thinking he has been duped.

The contract was drawn up by the gym owner, stating that my cousin will be self employed, working on a 40% profit basis. The contract has a number of other lines such as adhering to H&S etc, but has a number clauses which have also raised a concern.

In line with the contract, he is not allowed to offer any PT / Classes outside the gym, and if he decides to leave the gym, cannot work in an 10 mile radius of the gym.


First thing - working on a 40% profit basis - The gym owner has only been giving 60% of the money earned to my cousin. So if he has a PT class with a client at £50, my cousin keeps £30, and the gym owner takes £20. For me, this is not taking 40% profit, this is taking 40% of the turnover. My understanding is that profit is what is left after expenses, wages etc. and potentially tax deductions if it post tax profit (which is not defined in the contract).
Would people agree?

The second clause that is concerning is that if he decides to leave, the contract states he cannot work within a 10 mile radius. Now, this could be implied to be within the fitness industry based on the contract, but is so vague could mean just generally working? There is also no date on this clause, so is this indefinite? Is it enforceable? This is a concern as if he wishes to invest in equipment and become a mobile PT, he will lose the vast majority of his client base he has built up over the years?


Finally - the contract was signed in good will thinking his mate, the gym owner, would not stuff him over, (but it appears he has), so signed the contract, no fuss, excited to be self employed etc.
The contract was countersigned by the gym owner, and a witness who is a not an impartial party, being a family member of the gym owner.

With this in mind, is it possible to null and void the contract, and potentially go to tribunal to claim against the gym as the contract was almost inline with what an employee has?


Sorry for the waffle - be great to hear any thoughts on the above.

Stay safe, and thanks in advance for looking and responding

[ULA]

Without seeing the full contract it is difficult to be difficult to be definitive, however given the restrictions on not giving classes outside the gym or restrictions on operating on contract termination then in my view this is not a freelance contract.

What provisions are there within the contract for termination?

[suiyat]

Hi Ula. Many thanks for getting back to me.

Absolutely Zero. The only clause regarding termination is as follows;

'If Personal Trainer leaves XXX is agreed not to work within a 10 mile radius'

These are the exact words. It is not a very professional contract written by someone who knows employment law it seems.

Very flaky as it does not specifically state where the 10 mile radius is of.

More than happy to share the contract for you to see? It will be blacked out in certain areas to maintain anonymity.


Thanks again for the reply

[ULA]

What is your cousin wanting to do? Is he wanting to leave and find somewhere else to work or actually set up on his own?

[suiyat]

Hi Ula

Thanks again for your response.

When he recently found out he could have earned close to £35k instead of his take home of close to £21k, it has made him think to set up on his own.

Of course he will need to outlay a bit more, but he is coming across angry and upset that his friend is taking such a considerable chunk of his potential earnings, who is pretty much acting as a boss.

[ULA]

So is his aim to find a way out of the agreement and be able to operate within the 10 mile radius limit?

[suiyat]

That would be the case. But looking at some other points, if he has been treated as an employee, rather than freelance, i have seen that he could take to tribunal and look to recoup money?

If this is true, then this would be an option to explore

[ULA]

Given the restrictive nature of the clause i.e. it is not limited to PT work and just states he is not allowed to work in a 10 mile radius that effectively precludes any type of job neither is there a time limit on the restriction if this was to be taken further in my opinion it would be considered too onerous.

This is a useful page if you have not already found it about self-employed status:

https://www.gov.uk/employment-status...yed-contractor

Given the nature of the agreement and how it has in fact been in practice, your cousin could potentially present a claim for being an employee in which case he can commence a claim by starting an early conciliation via ACAS:

http://www.acas.org.uk/early-conciliation