ECJ Holds That Commercial Agents May Work From Principal's Business Premises And Perform Other Activities For Same Principal

On 21 November 2018, the Court of Justice of the European Union ("ECJ") delivered a judgment on a request for a preliminary ruling from the Liège Commercial Court (the "Commercial Court") regarding the interpretation of Article 1(2) of Council Directive 86/653/EEC of 18 December 1986 on the coordination of the laws of the Member States relating to self-employed commercial agents (the "Directive") (ECJ, Case C-452/17, Zako SPRL v. Sanidel SA). The ECJ held that a person will not lose the legal status of a "commercial agent" if (s)he works from his/her principal's business premises and performs, for the same principal, activities other than the negotiation and conclusion of contracts for the sale or purchase of goods, on condition that these circumstances do not prevent him/her from performing his/her activities as a commercial agent in an independent manner.

The dispute at issue related to the termination by Sanidel SA ("Sanidel"), a company selling bathrooms and fitted kitchens, of its agreement with Zako SPRL ("Zako"). Zako had been responsible for the fitted kitchen department of Sanidel. In this capacity, Zako negotiated and concluded contracts with customers on behalf of Sanidel. Zako carried out this task exclusively from Sanidel's business premises, where it had a permanent work station with a direct telephone line and e-mail address. In addition, it also performed assignments other than the negotiation and conclusion of contracts on behalf of Sanidel, such as the management of staff in the fitted kitchens department, contacts with suppliers and contractors of Sanidel and the preparation of both purchase orders and plans and price quotes, as well as the measurement of kitchens. Zako received a monthly lump sum and an annual commission, calculated for all services performed for Sanidel. No distinction was made between its activities as a commercial agent and its other activities. It was common ground that Zako performed all of its tasks completely autonomously.

Following the termination of its agreement with Sanidel, Zako claimed in court compensation and commission arrears from Sanidel. To rule on the claim, the court had to decide whether the agreement between Zako and Sanidel constituted: (i) a contract for services as a sales representative (handelsvertegenwoordigingsovereenkomst/contrat de représentant de commerce); (ii) a contract for work (aannemingsovereenkomst/contrat d'entreprise); or (iii) a commercial agency contract...