Marc Gander - The Consumer Survival Handbook


A 220 page introduction to all things consumer related by our own BankFodder.

Includes energy companies, mobile phone providers, retailers, banks, insurance companies,debt collection agencies, reclaim companies, secondhand car sellers, cowboy garages, cowboy builders and all the rest who put their own profits before you.

£6.99



Patricia Pearl - Small Claims Procedure - A Practical Guide


An excellent guide for the layperson in how to use the County Court - a must if you are intending to start a claim.

£19.99 + £1.50 (P&P)


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  1. #1
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    Default Employer wants to pay 50% of contractual sales commission owed

    Hi,

    I work in sales and my contract was amended some months ago to give me 1% commission on all combined sales above a target figure.

    The target was designed to be easily achievable as my base salary was lower than I'd liked and I was effectively doing two jobs - both sales and IT.

    The commission became due so I requested it twice via email (no response) I then raised it again via telephone. I got sat down in a meeting with my manager and the finance guy, they tried to tell me it was not payable for several months longer and also that the company didn't have the money..

    After numerous emails they said OK we will pay you x amount as soon as you agree, x being about 50% less than I was expecting!

    They are working out sales AFTER deducting tax, postage etc. they are saying that tax does not go to them, it goes to HMRC so it isn't considered part of a sales figure.

    My contract does not say whether sales are GROSS or NET, from several verbal discussions before I signed, I was under the impression sales were GROSS.

    The figure they suggest pays me approx. what I could get for doing the sales job elsewhere.. nothing more.. I also have effectively been on call and spent many extra unpaid hours..

    I am sticking out for the full amount I think I'm owed and have given them 2 weeks to pay it - am I in the right?

    Thanks in advance.


  2. #2

    Default Re: Employer wants to pay 50% of contractual sales commission owed

    It all depends on whether a 'reasonable observer', reading your contract, would think the figure is gross or net.

    To be honest I think that most people would read a bare figure as meaning the gross amount rather than a net amount. So it sounds to me like you are in the right.

    Only you can assess whether you think it is true that the company doesn't have the money. If so, it might be worth looking at jobs elsewhere.

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  3. #3
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    Default Re: Employer wants to pay 50% of contractual sales commission owed

    Hi steampowered,

    Thanks for the reply.

    I worked for the company previously and had a similar arrangement, but it was a 'discretionary bonus', they quibbled over paying it but I showed I'd hit my target and it was paid based on the gross sales.

    When I came back I had a target again, based on the gross sales and when hit it was paid without question (boy, were they happy I'd come back!).

    Obviously those were different contracts, but do they hold any weight?

    The company is run by a millionaire, has a huge stock holding and Q4 is the busiest period, they're spending money like water on new employees amongst other things so for them to say they don't have the money is a load of baloney to be honest.. yes I am looking elsewhere!

    Regards.


  4. #4
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    Default Re: Employer wants to pay 50% of contractual sales commission owed

    Also I forgot to add.. some of the sales figures are in Euros and US Dollars - my contract doesn't stipulate what exchange rate will be used, my employer has used a less favourable exchange rate than when I looked up the exchange rate myself online, at the point of the commission being due.

    What would be considered a reasonable exchange rate to use in these circumstances?


  5. #5

    Default Re: Employer wants to pay 50% of contractual sales commission owed

    Hi there - if your bonus is 'discretionary', it will be very difficult to challenge their calculations.

    But if your bonus is contractual, then I think the fact that bonuses were calculated on a 'gross' basis in the past adds further weight to your argument that the figure should be interpreted as gross rather than net.

    If the contract does not state an exchange rate, again it would come back to what a reasonable observer would think. I think the employer would have some leeway as to when they want to do the currency conversion, but they shouldn't give you a rate which is worse than the market rate at that time.

    Ultimately, the decision you will have to make is how far you want to push this. It sounds like you might have grounds to take this to the county courticon if you need to - most employers would just pay up before it gets to a hearing with the judge. However that would damage your chances of getting a good reference!

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  6. #6

    Default Re: Employer wants to pay 50% of contractual sales commission owed

    whatever they choose as long as it is a genuine one they get from their bank or wherever.

    Quote Originally Posted by chaoticj View Post
    Also I forgot to add.. some of the sales figures are in Euros and US Dollars - my contract doesn't stipulate what exchange rate will be used, my employer has used a less favourable exchange rate than when I looked up the exchange rate myself online, at the point of the commission being due.

    What would be considered a reasonable exchange rate to use in these circumstances?



  7. #7

    Default Re: Employer wants to pay 50% of contractual sales commission owed

    the law uses the simplest or commonest use of the language so when someone syas sales it maens 1% of the price the goods sold for. If they said net sales then that would apply but even net sales has to have a rider what is included in the deductions form the gross and that is usually taxes. They would have to stipuate it even further if they meant net profits of sales as that is very different.


  8. #8
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    Default Re: Employer wants to pay 50% of contractual sales commission owed

    Hi,

    Just to update the thread..

    Since I requested the commission be paid the company dismissed my manager and brought in a third party who until now I hadn't much contact with. They accused me in front of my team of not doing my job, struggling to carry out basic tasks and were extremely critical. I was told I'd be having weekly performance meetings with this person and another manager who I was now to report to.

    In the first performance meeting this person told me my performance and my teams performance was crap, they told me the company was not in profit showing me financial information, my commission was going to be withdrawn, I could be replaced tomorrow or someone brought in and I'd be made to train them to do my role, they massively increased my workload and gave unachievable targets. They said all meetings would have minutes taken and this be added to an HR file - I wasn't given any.

    I complained about this persons behaviour to the business owners as I was feeling bullied and dreading going to work - I was told they and the other manager had been spoken to.

    This person since made a number of statements to me such as they were charging 30% of their usual day rate to the company and once in profit they would be receiving a cut of this and so they were very eager to bring the company into profit. They were not concerned about my commission, it was a matter between the business owners and me.

    Regarding the commission I went to early conciliation with Acas, my employer came back to me directly with the same offer plus a discretionary 1,000 which I verbally declined as I'd asked for it to be as close to the figure I was owed as possible. They then put this in writing and asked me to respond, but there was no timeframe so I did not reply. The performance meetings I was getting positive feedback but given no copy of notes etc. they were no longer with the third party just the manager. I was accused by the manager of recording one of the performance meetings as my phone beeped during it.

    I was verbally told by the third party and manager that there was going to be an investigation into a particular matter and as a part of this my team and I would be asked some questions. A few days later I was called into a meeting with an HR representative who told me it was an informal chat, nothing to worry about etc. I was not being dismissed, but notes would be taken and I'd need to sign them. There was a set of 20 questions read out to me, I asked for it to be recorded on the notes it was an informal chat, it was then written on the notes it was a commission review past/present and performance. The meeting concluded and I was told if anything further needed to be discussed I'd hear from them.

    After the weekend I was then called into another meeting with the same HR person and one of the business owners, they gave me the right to be accompanied which I took them up on, told me my contract was terminated with 1 week notice which I didn't need to work and asked me to leave the premises whilst they waited for me to go.

    The letter seems to suggest they are summarily dismissing me for performance - failing to carry out reasonable tasks and duties and gross misconduct - they say I focused on Account A sales and not Account B when I was responsible for both as per a change to terms I signed 3/4 of the way though 2017 and as such I've cost them a financial detriment for my own personal gain (i.e. fraud/theft) I'm intending on appealing with these points:

    - The real reason for dismissal is due to exercising my statutory right to not have unlawful deductions to my wages i.e. the contractual commission, which makes it an automatic unfair dismissal - until I requested the commission I'd an unblemished work record.
    - The answers I gave in the investigation meeting have been misquoted or misunderstood, I was referring to the period before the change to terms was signed when I was responsible for Account A, after this as agreed with one of the business owners I focused on Account A with another team member carrying out work on Account B/
    - They have not followed the Acas code of procedure for discipline, i.e. not presented me with allegations, allowed to prepare and represent myself properly, informed the meeting could result in dismissal, no suspension, performance plan, alternative position suggested etc.
    - The allegations they make are defamatory, I haven't been paid a penny of the commission to date so how have I gained financially from the alleged misconduct.
    - They have given me the wrong notice, 1 week when my contract says 4 weeks in the first year and an extra week for each additional year of service.

    I would suggest paying the commission 50% between the net and gross figure, 4 weeks notice, holiday pay and an agreed reference all via Acas.

    I believe the third party has brought the allegations against me, investigated and made the decision to dismiss me. They told me they will receive part of any profit the company makes and just before I was dismissed told me the company made profit last month - by dismissing me if sales remain the same or increase they will receive more of a cut? How can I find out who made the decision? Is it possible I have any legal recourse against the individual or company as this defamation has resulted in my unfair dismissal?

    Thanks in advance.


  9. #9

    Default Re: Employer wants to pay 50% of contractual sales commission owed

    to answer the last part first,
    it doesnt matter what the incentives of this third party is as they are not your employer so they cant alter your contract nor force you or your employer to do anything. They are there at the employers expense to act in their interest or to give advice.

    as you are now out of that job I would say stick with the correct rate for commission and ensure that you get paid for your accrued holiday pay and for the correct notice period, which isnt a week.

    You dont say how long you have been employed, this does make a difference but not much to the above so far.
    If you have been there a long time then the notice period will be at least a month and the correct processes carried out before dismissal, which doesn't appear to have been done although they are trying to get round this by claiming gross misconduct when there doesnt appear to be any misconduct at all.

    Now all of this will have to be explained by them at an employment tribunal should they decide not to pay you the correct amount.
    If they do pay up without much argument then you may wish to consider the risks and benefits of a long drawn out battle with them but I dont see them wanting to just cough up as they havent shown much sense so far.

    You will have a limited time to slap in a claim so start off by following the ACAS code and appeal the dismissal.
    If you dont then they will win on a technicality.

    ACAS will advise and even mediate but as said, no point accepting a loss now you dont have a job,

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  10. #10
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    Default Re: Employer wants to pay 50% of contractual sales commission owed

    Thanks ericsbrother this is really sound advice.


  11. #11

    Default Re: Employer wants to pay 50% of contractual sales commission owed

    Do you have 2 years' service (taking into account your notice period)? If not I don't fancy your chances of claiming for unfair dismissal if you did go to Tribunal, though you could try for the reason you explained.

    Your settlement proposal sounds reasonable to me.

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  12. #12
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    Default Re: Employer wants to pay 50% of contractual sales commission owed

    No I have 1.5 years service..

    Just a quick question.. I don't know if they plan to do this but could they close themselves down and start selling under another limited company?

    Is that something which could be done relatively easily hypothetically? They have been trading for a number of years.

    Thanks in advance.


  13. #13

    Default Re: Employer wants to pay 50% of contractual sales commission owed

    Your short service limits what a tribunal can do but that doesnt stop you from using the county courticon small claimsicon procedure to claim the monuies due to you under a contract.
    If they phoenix the company after you have started a claim then they are supposed to set aside the monies that are likely to be paid out in this manner. many companies dont but there is room within the Companies Act to claim from the newco or the directors individually


  14. #14

    Default Re: Employer wants to pay 50% of contractual sales commission owed

    Quote Originally Posted by chaoticj View Post
    Just a quick question.. I don't know if they plan to do this but could they close themselves down and start selling under another limited company?

    Is that something which could be done relatively easily hypothetically? They have been trading for a number of years.
    It could be done, but they then couldn't legally take assets out of the old company (e.g. office equipment) and move them over to the new company without paying new creditors, without engaging in a fraudulent transfer of assets triggering personal liability for the directors.

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  15. #15
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    Default Re: Employer wants to pay 50% of contractual sales commission owed

    I've been made a settlement offer via Acas which is substantially more - figure is similar to contractual sales commission owed less 8% (800).

    BUT I'm told it's to cover commission, 4 weeks notice, holiday pay etc. Apparently it can be paid gross as a severance payment? As compensation for the job loss.

    I usually get paid 2,120 a month after all deductions. I've had about 9 days off (3 national holidays - New Years Day, Good Friday, Easter Monday) and 6 of my choosing, I think I accumulated around 9.3 days? Contract says 24 days entitlement.

    Does this sound like a fair deal, bearing in mind I now have no job or income, is what they are suggesting a typical arrangement?

    Also my original contract includes post termination restrictions. Considering what has happened would these still apply, are they even enforceable or legal?

    My restrictive services are what I was employed to carry out at the company. Geographical restriction is 2.5 miles of place of work and that of suppliers/clients/customers.

    Period of 6 months after termination can't carry on a business similar or in competition, on my own or the behalf of others, directly or indirectly in competition with the company.

    - Represent myself as being connected with the company, acting for them or utilising their goodwill.
    - Use name, style, logo or image similar to the company or which has or is yet to be used.
    - Seek to procure business from or with any person, firm or company during 12 months from termination with whom I had material contact.
    - Same as above but 'seek do business' with.
    - Entice away any employee in a senior or similar capacity to me.

    Thanks in advance guys!


  16. #16

    Default Re: Employer wants to pay 50% of contractual sales commission owed

    the restrictive contract will still apply unless you can show that their behaviour was so awful no person could ever agree to the terms knowing what you now know.

    From what I can see they are saying you cant start your own company nor poach staff or customers.
    So far nothing unusual. geographical restrictions are normal for companies like hairdressers where clients are local to business.

    Now if you go and work for another company these restrictions cannot apply because you arent acting for yourself and again the local restriction would mean that you cnat work for a locl rival co (which is possibly reasonable but as they have fired you under dubious methods and reasons then it is unlikely that can be enforced. Poaching customers is harder to prove but basically you are banned from using their contarct book or even your own if it was built solely in their employ.


  17. #17

    Default Re: Employer wants to pay 50% of contractual sales commission owed

    I think getting paid for 4 weeks notice and holiday pay in full is non-negotiable. There is no excuse for an employer to fail to pay that.

    You can probably accept a reasonable discount on the commission given that your entitlement to that sounds more debatable.

    The restrictive covenants in your contract will continue to apply, unless they are waived in your settlement agreement. Personally I would not rock the boat on these unless they are actually going to cause you a problem for your next job. If the employer thinks you need them to waive the restrictive covenant as part of your settlement package it just gives them an extra negotiating chip. If they are going to cause you a problem for your next job them you should probably ask for a waiver in the settlement package, and it is your decision whether to raise that now or whether you raise it only after a number has been agreed.

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  18. #18
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    Default Re: Employer wants to pay 50% of contractual sales commission owed

    Hi ericsbrother,

    So creating a company that does what they do before 12 months is up would be a no no but afterward it's fair game?

    What about doing what I did for the company but on a freelance basis for others?

    Or, doing this for a company that supplied them with a service but are not a competitor?

    What do you think of the proposed settlement?

    Thanks!


  19. #19
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    Default Re: Employer wants to pay 50% of contractual sales commission owed

    I do have a potential job lined up but they are not a competitor. If I don't get this job or struggle to find one as well paid then I could potentially make freelance earnings if I'm allowed.

    I asked if the settlement figure had a breakdown but apparently it doesn't? Agree that notice and holiday should be paid in full. Maybe I should ask for further clarification on a breakdown?

    Thanks.


  20. #20

    Default Re: Employer wants to pay 50% of contractual sales commission owed

    Yes, ask for a breakdown.

    Or better yet - set out your proposed breakdown of what you think you are entitled to.

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