Jason Elliott was called to the Bar of Northern Ireland in 2013 and is the Associate Head of School of Law at Ulster University. As a practising barrister, he has developed a largely civil practice representing individuals, companies and public bodies in litigation. This covers a wide range of areas including personal injuries, wills and employment law. In terms of employment law, he has represented both applicants and respondents in the Industrial Tribunal. At Ulster University, Jason lectures extensively on the civil areas of practise such as Equity and Trusts and delivers employment law lectures for both undergraduate and postgraduate students.
Background:
The claimant was employed by the respondent from February 2018 until July 2022 as a Business Development manager. His main role was to source and secure new customers.
In addition to basic salary, the claimant also earned commission. The claimant alleged that from January 2020 to July 2021 he was underpaid £14,026.18.
There were two types of commission. The first was ‘monthlies’ relating to new clients secured by the claimant over a contracted period (usually one year or two). The second was ‘ad-hoc’ and related to one off sales.
The claimant contended that he was entitled to receive monthlies for 12 months following the sale of an IT Service Contract. This was based upon a verbal agreement between himself and the Managing Director. The respondent stated that they were only payable for the calendar year in which the sale was made. This is where the dispute arose.
Outcome:
The Tribunal found that the claimant was contractually entitled to receive commission on monthlies during the calendar year in which the contract with the new client was secured. Therefore, the commission was not carried over into the next calendar year; the monthlies reset to zero every January. This was clear through an email to the claimant sent in January 2018 and there was no evidence that it had been re-negotiated.
The claimant also challenged the ad hoc commission stating that delivery costs and labour costs should not be factored in to determine the commission payable. However, the Tribunal found that the commission was to be based upon net profit so it was appropriate that it would be taken into account. Therefore, the claimant’s claim was dismissed.
Practical Guidance for Employers:
Where payment is based upon commission, it is important that the exact amount of commission payable is set out clearly and in writing. This avoids confusion arising and should there be a case brought then the written provisions can be relied upon. This was the case here with the email from 2018 being relied upon to outline how ‘monthlies’ and ‘ad-hoc’ commission arose.
NI Tribunal decisions are available on the OITFET website:
http://www.employmenttribunalsni.co.uk/
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