Commissions and furlough

Melly1970

I’m employed.  The contract I have states commissions are discretionary. A discretionary commission  is exactly what it says, discretionary. This commission is made solely at the discretion of the employer. The requirements and amounts for the  commission are not given to the employee ahead of time. Discretionary commissions are usually paid for services performed. For the bonus to be thought of as discretionary, there cannot be any contract or agreement made ahead of time for the bonus to paid.

A non-discretionary commission is the complete opposite of a discretionary . A non-discretionary commission is paid because of a contract or agreement that has been made between the employer and employee ahead of time. The agreement is usually associated with production, quality, attendance or another form of performance. A non-discretionary commission is that the employee is expected to be paid and it is usually given at the same time, either monthly, quarterly or annually. Because these commissions are agreed upon ahead of time they must be included. 

Looking how commissions have been paid by my employer from I started my employment with them some years ago, Commissions are confirmed both verbally and in writing  in advance. So contradicting what a discretionary payment is when you look at the contract. I know in advance what my targets are and what monetary value this equates too. So I believe my commissions can be described as non-discretionary. I do understand in my contract commissions can be withdrawn at any stage however up to and including the day we were furloughed commissions were not removed. 

My employer furloughed  half of the team that I would work with and the remaining team  are still continuing to have commissions paid. So in that case I believe when on furlough our employee terms and conditions remain the same. So if this is the case why are we not able to have an average of our commissions paid. To give parity between furloughed and non furloughed staff. 

Any help would be great

 

daKlone

As you might have noticed by the sheer number of questions about this and similar problems, this area is highly debated and quite unclear.

Martin did get a written statement from HMRC about this recently which might help you persuade your employer that they can reclaim these payments using CJRS:

“Payments the employer is obliged to make to the employee should be included in the reference salary. Variable payments that are specified in a contract and are always paid in reality, can be included within the reference salary.

“The percentage does not have to be in the contract. The written terms of the employment contract are the starting point for assessing whether earnings paid by an employer are discretionary or not. Where the pay arrangements in practice clearly differ to those specified in the contract, the employer should consider the reality of the employment arrangements."

https://www.moneysavingexpert.com/news/2020/04/employed-help-coronavirus-furlough/#chink