Commercial Agents (Council Directive) Regulations 1993.

Assignment Topic
Alpha GmbH (“Alpha”) is a successful German green electricity and gas company who decided in June 2019 to enter the British market. Its most senior management agreed on the following business model for the UK: Alpha’s employees should focus on the supply of energy while sales (to both individual and corporate customers) should be delegated to agents. Thus, Alpha concluded between January and April 2020 indefinite term agency agreements with around a dozen individuals as well as a company, Epsilon Ltd. (“Epsilon”). Epsilon advertises itself as the high quality but low-cost solution on the commercial agency market. It employs only two directors. Their main task is to conclude, on behalf of Epsilon, agency agreements with individuals with strong sale experience in the specific market considered by their client, i.e. electricity and gas in the case of Alpha. In consideration of their sale experience, Epsilon pays its agents a higher than average commission (with an upper limit of 30% of Epsilon’s own commission from Alpha). Epsilon concludes with its agents automatically renewable non-exclusive fixed term (four months) agreements subject to Chinese law. The latter states that any commercial agency agreement may be terminated at any time without any compensation or indemnity and that this rule cannot be derogated from by the parties in their contract. Thanks to its past and on-going experience in the energy sector, Epsilon has been able to hire around 200 experienced agents to market Alpha’s products.
Part 1 (2,250 words):
In September 2020, Alpha learnt that it was unfortunately under investigation by the UK Regulator for mis-selling. The Regulator has indeed received numerous complaints from consumers, in particular vulnerable consumers who claim to have received misleading information. After an internal investigation, Alpha believes that the problem lies with three agents in particular, who were recently hired and are still on a trial period of six months. Alpha therefore decides to let go these agents with immediate effect. To be on the safe side, and avoid further potential mis-selling issues due to the lack of experience, Alpha has also decided to let go all other agents on a trial period. It has therefore given a one-week notice to two other agents, as per the agency agreement. At the same time, Alpha took this opportunity to get rid of two agents who have been performing very badly, bringing only one sale per week on average in the last seven months. Their contracts were immediately terminated. One agent also spontaneously ended last week his agreement with Alpha as he has contracted COVID-19. In all the above cases, Alpha has not provided any termination payment, relying in particular on the explicit exclusion in the agency agreement of any termination payment while on trial period or the breach of the agency agreement for poor performance.
Please advise Alpha on its legal position under the Commercial Agents (Council Directive) Regulations 1993.
Part 2 (2,250 words):
Yesterday, Alpha received a letter from the UK Regulator stating that it was forced, with regret, to hand Alpha with a 2.4 million pounds fine for continuous and significant breach of its licence to supply energy. Furthermore, Alpha is prohibited from selling electricity and gas in the UK for the next five years. All 78934 existing customers will be moved to another energy supplier within the next 30 days. The Regulator’s decision is effective as of tomorrow. As a consequence, Alpha is currently texting or phoning all its remaining agents for the UK market, as well as those hired by Epsilon, stating that their agreements will be terminated starting tomorrow and that unfortunately no termination payment will be made given the exceptional circumstances the company finds itself in. Moreover, Alpha reserves itself the right to claim back from its agents and those hired by Epsilon the 2.4 million pounds fine: at the end of the day, they were solely responsible for the sales, were not they?
Please advise Alpha on its legal position under the Commercial Agents (Council Directive) Regulations 1993.