End of Employment - Commission payment owed by employer

HondaCB1000r

After some advice on where I stand with commission payments during my notice period.

I am due to end my current employment tomorrow and have asked my employer to provide information on commission owed against sales I have continued to make during my notice period.

I have made a large sale during my notice period which is a substantial amount of commission and the employer has stated that I will not be paid the commission due to the money not being paid by the client prior to my leaving date, the client has confirmed payment will be made a couple of days after I have left the employment of the company. The order has been received and invoiced by my employer.

I have received the below information from my employer as to why I will not be paid the commission:

The process that we’ve followed is to assess your sales and the commission due against the terms of the scheme.

The scheme states: 

“Commission will accrue upon a sales invoice being raised and will be paid monthly in arrears, in the payroll the month following that in which the invoice payment is received by the Company.”

In order for you to receive payment you were expecting, we would have needed to have received payment from them by 31st March 2024.  This did not happen and in fact, we have still not received payment.  Therefore, you are not eligible for commission on the sales that do not qualify.

Additionally, your employment contract states:

“On termination of your employment howsoever arising you shall not be entitled to any compensation for the loss of any rights or benefits under any share option, bonus, long-term incentive plan or other profit sharing scheme operated by the Company in which you may participate.”

Any advice would be greatly appreciated with regards to if this could be challenged further.

Hoenir

HondaCB1000r said:

the client has confirmed payment will be made a couple of days after I have left the employment of the company. 

Confirmed to you? 

HondaCB1000r

Yes - confirmed to myself on email

Marcon

HondaCB1000r said:

After some advice on where I stand with commission payments during my notice period.

I am due to end my current employment tomorrow and have asked my employer to provide information on commission owed against sales I have continued to make during my notice period.

I have made a large sale during my notice period which is a substantial amount of commission and the employer has stated that I will not be paid the commission due to the money not being paid by the client prior to my leaving date, the client has confirmed payment will be made a couple of days after I have left the employment of the company. The order has been received and invoiced by my employer.

I have received the below information from my employer as to why I will not be paid the commission:

The process that we’ve followed is to assess your sales and the commission due against the terms of the scheme.

The scheme states: 

“Commission will accrue upon a sales invoice being raised and will be paid monthly in arrears, in the payroll the month following that in which the invoice payment is received by the Company.”

In order for you to receive payment you were expecting, we would have needed to have received payment from them by 31st March 2024.  This did not happen and in fact, we have still not received payment.  Therefore, you are not eligible for commission on the sales that do not qualify.

Additionally, your employment contract states:

“On termination of your employment howsoever arising you shall not be entitled to any compensation for the loss of any rights or benefits under any share option, bonus, long-term incentive plan or other profit sharing scheme operated by the Company in which you may participate.”

Any advice would be greatly appreciated with regards to if this could be challenged further.

Certainly badly worded. Arguably commission isn't included in their list 'any share option, bonus, long-term incentive plan or other profit sharing scheme'.

If someone goes on making sales during a notice period, and makes a sale the day before they leave, by definition the client isn't going to have paid up before they go. 

I'd go back and challenge.

pinkshoes

I'd be challenging this, as otherwise no one would make any effort to sell anything whilst working their notice period!

If you get on well with the client you made the sale to, I'd be tempted to let them know of this dirty tactic the company have pulled and see if they'll support you e.g. they can offer £XXXX less (equal to the commission) given they are now aware that no commission is being paid, or pull out of the deal altogether. 

TELLIT01

Rights to many discretionary payments such as commission often cease once a person has handed in their notice.  It would seem that is the situation the OP is in.

Undervalued

pinkshoes said:

I'd be challenging this, as otherwise no one would make any effort to sell anything whilst working their notice period!

If you get on well with the client you made the sale to, I'd be tempted to let them know of this dirty tactic the company have pulled and see if they'll support you e.g. they can offer £XXXX less (equal to the commission) given they are now aware that no commission is being paid, or pull out of the deal altogether. 

Which would be gross misconduct!

If the OP were to do that and the client pulled out of the deal the firm could potentially sue the OP for the lost revenue!

Either the OP has a contractual right to the commission or he doesn't. Without studying the whole of his terms of employment we don't know. IF he has a right to the commission then if necessary he can take action against the employer after he leaves. If he doesn't then the lesson is to have a better understanding of his terms of employment in the future. As has been said it is not uncommon for discretionary bonuses etc to cease the moment an employee gives notice to resign. The devil is in the detail.

Marcon

pinkshoes said:

I'd be challenging this, as otherwise no one would make any effort to sell anything whilst working their notice period!

If you get on well with the client you made the sale to, I'd be tempted to let them know of this dirty tactic the company have pulled and see if they'll support you e.g. they can offer £XXXX less (equal to the commission) given they are now aware that no commission is being paid, or pull out of the deal altogether. 

Sometimes you get truly awful advice on a public forum. A long time since I've seen anything quite so foolish suggested.

I imagine the client would be appalled if OP tried to drag them into this - and rightly so.

MattMattMattUK

Commission is almost always discretionary and as such can be terminated at any point. Even contractual commission often has similar terms to those you mention.