Commission after Furlough ends

Roullier

My company have been paying their sales staff 80% of their average annual commissions whilst on Furlough for April and May. On returning to work they have now said that they will only pay commission going forward on orders taken from June 1st. Many of us have pipeline orders that aren’t due out until September that we will now not get paid on. Can they do this? 

Jeremy535897

If your furlough payments include commission, they would be paying you twice if they paid actual commission. You need to look at what your furlough agreement and/or amended contract of employment say.

sharpe106

As above surely you have already been paid an average of this. Maybe not quite the amount you would normal get.

Roullier

We get paid when we deliver something, not on orders. I can understand not being paid again for things that couldn’t be delivered during lockdown and are now being delivered in our return. But for future orders that we wouldn’t have normally been paid for until October (we get paid the month after delivery)?

mobilejo

So to be clear, in April & May, you would have got commission from sales you made in December & January? That has commission has been 'replaced' by what you received in furlough?

Sales you made in Feb & March you would have expected to be paid on in June & July, but they are now saying they're not paying that?

Roullier

Mobilejo - yes, that’s correct. Sometimes the order and delivery are in the same month and we get the commission paid the month after delivery. They are saying, in effect, that the slate has been wiped clean on paying commissions on any orders taken pre-June 1st (or whatever date you return to work), regardless of the fact that some of these orders have not yet been built and are not due to be delivered until September/October. As I said in my first post I get that this applies to the deliveries that were postponed due to lockdown and would have normally gone out in late March, April and May. 

mobilejo

Is your commission a contractual right, or is it discretionary?

Thrugelmir

Perhaps there's uncertainty as to what outstanding orders will be fulfilled/ paid for. Business may well not return to normal for some time if at all. 

Grumpy_chap

I read this totally differently and would say the employer has been generous.

• OP works in Sales, so typically a low basic salary plus commission on orders received (paid at dispatch / invoice date).
• There was a period when no sales were made because the OP was not working, but the company used the furlough scheme to support 80% wage.  This could have been interpreted as fixed rate employee, so 80% of the low basic salary only, or as variable rate where the commission can also be considered.
• Now the OP is back at work and can sell again, so will be paid on new orders received, when those orders are dispatched.  Depending on the industry, this may even be a back-log of orders to land in June if orders will have queued up awaiting the company being able to receive the orders.

Either way, sadly, for a Sales role, if you do no sales for 2 months that is going to be less commission somewhere along the line.  Also, those sales that have not been made won't generate turnover or profit for the company to fund the commission on the sales that were not made.

I can see that the OP has sales made in March for which commission has not yet been received from the company as the goods have not been dispatched and invoiced.  This may be something the OP could have a discussion about with the company, but if they say "no", it is probably tough luck.

The bright side for the OP is that the business survived and he has a rewarding job to go back to and the pain of this short period will hopefully pass soon.

mobilejo

Grumpy_chap said:

I read this totally differently and would say the employer has been generous.

• OP works in Sales, so typically a low basic salary plus commission on orders received (paid at dispatch / invoice date).
• There was a period when no sales were made because the OP was not working, but the company used the furlough scheme to support 80% wage.  This could have been interpreted as fixed rate employee, so 80% of the low basic salary only, or as variable rate where the commission can also be considered.
• Now the OP is back at work and can sell again, so will be paid on new orders received, when those orders are dispatched.  Depending on the industry, this may even be a back-log of orders to land in June if orders will have queued up awaiting the company being able to receive the orders.

Either way, sadly, for a Sales role, if you do no sales for 2 months that is going to be less commission somewhere along the line.  Also, those sales that have not been made won't generate turnover or profit for the company to fund the commission on the sales that were not made.

I can see that the OP has sales made in March for which commission has not yet been received from the company as the goods have not been dispatched and invoiced.  This may be something the OP could have a discussion about with the company, but if they say "no", it is probably tough luck.

The bright side for the OP is that the business survived and he has a rewarding job to go back to and the pain of this short period will hopefully pass soon.

If he has a contractual right to commission, he doesn't need to be grateful, he needs to get what he's owed.

Sure there will be a 2 month period with no commission (as no sales made because they were off work), and the period that he got 'furlough' commission will account for December & January sales, which would have been delivered in Apr/May if not for the closure - he can't be paid the commission on those when they do eventually get delivered.

However, it sounds like he made sales in Feb & March which they are simply planning on withholding the commission on. That could be a breach of contract, I would at least be exploring this. By the sounds of it, he will be seeing a period of 4 months with no commission, when there should only be 2.

Grumpy_chap

I agree, it sounds like 2 months with no commission.  However, depending on what the market is, the commission levels might then be reduced subsequently as things ramp back up.