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Employment Rights Act 1996 sec 13

Employment and Discrimination Law

Employment Rights Act 1996 sec 13

Postby diy » Tue Jun 06, 2017 9:23 am

An Employee has a variable element of his income "commission". Historically this has been a %age of the value of a sale, depending on the product being sold. For example he gets more commision selling iphones than samsungs for the same sale amount. Qualification for payment was: current employee, customer sale allocated to him, customer pays. All standard stuff for 90% of the population on sales contracts ( I would guess).

The employer would like to review the individuals effort on each sale and apply an after the fact decelerator which would reduce the commission rate if the employee at the discretion of management had not met certain soft measures (e.g. the sale only took 5 minutes as the customer said I want an iphone 7+ please). The criteria for these soft measures, is broad and no guidelines have been published giving examples of when the decelerator can be applied other than it can be from 0 - 100% of the value.

To be lawful according to Employment Rights Act 1996 Sec 13. 1(b)the worker has previously signified in writing his agreement or consent to the making of the deduction.

For this to be held, surely the worker must have specific details of the application of the decelerator prior to a sale, so that he know before completing the sale that the sale is likely to be impacted. Would the employer not need to give very clear guidelines setting out the policy to avoid claims that the deduction is an arbitrary deduction of wages?

What if the employee when accepting the new terms for commission payment followed up with an email to his manager saying:
Acceptance of these terms and conditions does not constitute agreement in writing to consent to deductions in accordance with Section 13, 1b of Employment Rights Act 1996

or similar?
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Re: Employment Rights Act 1996 sec 13

Postby atticus » Tue Jun 06, 2017 9:34 am

I do not think that this is about deduction from wages. It appears to be about the manner in which commissions payable are determined.
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Re: Employment Rights Act 1996 sec 13

Postby Hairyloon » Tue Jun 06, 2017 9:39 am

diy wrote:For example he gets more commision selling iphones than samsungs for the same sale amount.


Is that true, or just a f'rinstance?
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Re: Employment Rights Act 1996 sec 13

Postby atticus » Tue Jun 06, 2017 9:54 am

The OP used the technical legal expression "for example". But does it matter for the purposes of legal discussion?
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Re: Employment Rights Act 1996 sec 13

Postby Hairyloon » Tue Jun 06, 2017 10:09 am

Probably not for this particular legal discussion: I ask as a point of interest. It is a straightforward question seeking only a simple answer: it ought not derail the thread.
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Re: Employment Rights Act 1996 sec 13

Postby diy » Tue Jun 06, 2017 2:20 pm

I've no clue it was to avoid mentioning the actual products.

It seems a little odd that the employer can make an arbitrary deduction after the event - these are not discretionary bonuses by part of the employees variable income.
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Re: Employment Rights Act 1996 sec 13

Postby atticus » Tue Jun 06, 2017 2:47 pm

My question was if this is a deduction from pay, or a new scheme for calculating commissions.
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Re: Employment Rights Act 1996 sec 13

Postby diy » Tue Jun 06, 2017 9:12 pm

Is commission not part of pay then?
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Re: Employment Rights Act 1996 sec 13

Postby atticus » Tue Jun 06, 2017 9:22 pm

One of us is getting the wrong end of the stick.

Which is it:

1. Commission is earned, calculated, but, having been calculated, before it is paid some deduction is made?

2. Commission is calculated by a formula which adds some things, but deducts others, in order to produce the figure of commission earned?

If there is a change in the formula, i.e. Scenario 2, then the final figure, after applying all the adjustments, is the commission (pay) earned. If that sum is what is paid, it is paid without deduction.

This is why I have asked several times whether thiis a dase of a change in the method of calculating commission.
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Re: Employment Rights Act 1996 sec 13

Postby diy » Wed Jun 07, 2017 5:51 am

I think it's scenario 1, because it's new i'm not 100%. The process is applied post sale, is applied at management discretion after revenue recognised (the only previous requirement along with customer allocation). but before it's added to pay, though it could be done post pay and clawed back out of future commissions. It's clear that it's an after sale process and not something that can be determined by the employee at the point the customer pays.

i.e. old world. whoop whoop. i just sold an iphone 7+ for £800, that's £40 commission.
new world. I just sold an iphone 7+ i wonder if my boss will pay me.
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