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Company withholding commission due to a delayed Budget!


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Hello everyone, I've read through a lot of the posts regarding withholding pay on this site, but I can't see anyone who has been in a similar position.

 

Myself and my other sales colleagues were informed on Thursday evening that we would not be paid commission on the sales we had made in the last month because the company management had not yet decided a budget for this year.

 

The budget should have been in place at the year-end in June, and our commission rates are based on whether we hit budgetted targets or not. We have been advised that our commission would be paid to us once the budgets have been published, but we don't know when that will be.

 

It seems unfair to stop commission payments to us altogether due to something which is entirely in our managements hands. It looks like the company may in breach of the Employment Rights Act 1996 (c. 18 ) Section 13 but I'm no expert on the intricacies of this rule, especially as it is not my pay, but only my commission that they are withholding.

 

What are your thoughts? And if they are in breach, what would be a good course of action from here? We were paid on Friday without our commission.

 

Thanks in advance.

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Unless you signed an agreement to the deduction, I think you are correct in that your employer is in breach of ERA section 13.

 

In the supplementary section at the end of part II:

27 Meaning of “wages” etc

(1) In this Part “wages”, in relation to a worker, means any sums payable to the worker in connection with his employment, including—

(a) any fee, bonus, commission, holiday pay or other emolument referable to his employment, whether payable under his contract or otherwise,

 

You could copy and paste the relevant sections into a letter informing your employer that you believe that, by withholding your commission from your pay in August, they are in breach of the Employment Rights Act 1996.

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Thanks for the response. I thought as much regarding withholding commission. However, thinking about the company response to that, as my commission is based on the budget (which doesn't exist for this year until they create it), they could say that there is no commission to pay until they know what the budget is, hence why they are withholding it.

 

Does this argument hold any water? Speaking with my colleagues, it seems that the sensible thing to have done was to pay the commission at last years rate and adjust it later if it is lower or higher, rather than just stop payment completely.

 

Thanks.

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You should check your contract of employment, company handbook, commission scheme rules etc. for language regarding commission payments.

Sometimes commission scheme rules can be pretty flexible, to the employer's benefit, and if you signed agreement to non-specific terms your rights could diminish as a result.

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