The claimant lodged a claim arguing that the respondent failed to pay her a sales commission bonus called “direct non specialist sales commission” to the approximate value of £4,000. The respondent disputed the structure and calculation of the commission and argued that it totalled a substantially lessor amount. It was agreed between the parties that there was no reference to the commission in the offer of employment letter. The claimant relied on an e-mail chain, which she argued evidenced the terms of the commission, although the respondent viewed these are amounting to mere discussions.

The tribunal concluded that the emails were inconclusive of confirming the structure of the commission. However, a “budget note” recorded at a meeting between the sides which made reference to £4,000 was cited by the tribunal and relied on as the only reliable documentary evidence. The claim was allowed.

Practical Lessons

When a dispute over a commission or a bonus payment arises, the first point of reference will be the contract of employment. Where this does not exist, the tribunal will consider whether it was in the ‘reasonable contemplation’ of both parties that the amount was payable (Kent Management Services Ltd v Butterfield [1992] IRLR 394).

Documentary evidence will obviously be crucial to this and the claimant here benefited from the respondent’s failure to properly keep records. Another interesting point is that the claimant originally claimed unlawful deduction of wages but was outside the statutory three-month time limit. However, the tribunal deemed that the claim also amounted to a breach of contract and the time limit was a period of three months afte the effective date of termination and this claim was within that time limit. Employers should therefore keep an eye out for the differing time limits when considering how to respond to a claim.

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