Commission on Partial furlough

Salfy1962

What are the rules on Commission payment when on Partial Furlough, I was furloughed for April, May and June and received commission payment based on an average of the previous year, From July 1st I am partially (40%) furloughed, and expected full commission to be received but my company are still only paying an average of the previous year - this amounted to a loss of £450 commission for July alone, I am being told this is HMRC guidance but cannot find this anywhere, I feel aggrieved as I feel I should receive my contractual (Normal %) commission on sales achieved?? is their a firm rule on this during partial furlough??

Jeremy535897

What commission you are due to be paid in respect of working hours in flexible furlough will be stated in your employment contract. Your reference salary for furlough is based on your pay for the last pay date before 20 March 2020 if you are a fixed rate employee, or the higher of your average wage for 2019/20 up to furlough, and the wage for the equivalent calendar period last year, taking into account that you are only 40% furloughed.

Salfy1962

Jeremy - there is no reference in contract of employment to "Furlough" or "Partial Furlough",
are you able to clarify any further what the "taking into account you are only 40% furloughed" line means - should i receive say 60% of contractual commission, (either based on current month as it is with salary pay, the 19/20 average, or the 2019 corresponding month) with the 40% coming from furlough pay - albeit 80%??
by virtue of receiving flexible commission payments at a guaranteed % rate, do I assume i do not fall into the "fixed rate employee" bracket? thank you, i really want to get a better understanding of this

Jeremy535897

Your contract of employment presumably sets out the basis on which you are paid salary and commission, including how it is calculated? Is the commission linked in any way to the hours you work, or the results of the business?

Suppose your contract before coronavirus said you were paid monthly, £10 an hour for a 40 hour week. No overtime pay, but commission based on the turnover of the business in the previous month, paid monthly in arrears. You are furloughed on 1 April on what your employer can claim under CJRS, say 80% of your salary and commission paid on 28 February 2020 (your wages for February and your commission for January), assuming you are a fixed rate employee. Let us say that was £1,600 wage and £650 commission, so your furlough pay for a month (broadly speaking) is £2,250 x 80% = £1,800. On 31 March 2020 you should have been paid March's wage plus February's commission, say £1,750 wage and £700 commission = £2,450. On 30 April 2020, 31 May 2020 and 30 June 2020 you should have received roughly £1,800 per month. On 30 April 2020 I believe you should also have received March's commission, say £500.

For July, you would expect to receive about £720 (4/10 of £1,800) furlough pay, plus 60% of your normal wage (60% of £1,750). This is £1,770. There would be no commission (apart from the element in furlough), because you didn't earn any in June. However, this presupposes you received March's commission in April. It also assumes that your contract of employment provides that your commission is dependent on the hours you worked. That is why you need to understand how your commission is calculated, and whether this was varied by any furlough agreement or otherwise.

Salfy1962

Jeremy - To clarify my original post - yes July commission is payable in August and this is the month I refer too! but i also wanted to clarify the precedent going forward, I.E - in my September pay (August Commission) I have received no commission except the furloughed element, the commission is not based on hours worked but based solely on sales achieved, which is why I believe commission should be paid  (even if on a 60/40 basis) 

Jeremy535897

If you are only working 60% of your hours, you would expect (over time) to earn about 60% of your commission. From what you say, your furlough should be as I described. The fact that the calculation of furlough includes an element for a historic amount of commission is a red herring, unless your contract of employment has been amended to say that any future entitlement to commission is reduced by the element of furlough pay that relates to commission. You have previously said that your contract of employment is silent on this point. Consequently you should receive the commission you have earned in your 60% of hours worked. If it turns out you actually manage to earn as much commission working 60% of hours as you did working 100% of hours, you should still receive that commission, notwithstanding there is an element in your furlough. Equally, if you only earned 20% of the commission in 60% of your hours that you used to earn in 100% of your hours, that 20% is what you should be paid (plus the furlough element).