Losing Commission when resigning?

[DarylB90]

Hi All,

A colleague of mine who has recently started working with me is being chased for some commission his previous employers say has been paid in error.
He was an estate agent and they want £650 back they paid him in commission in his last pay packet.
It's not a huge amount of money so he's thinking of offering to pay it back monthly because he doesn't want the hassle.
I don't think he should pay them anything though so thought I'd ask for peoples thoughts on here.
He earned the commission and the estate agent in question aren't arguing that but in his contract it stated that he would lose all commission owed if he ever resigned.
I'm not sure this is legal though and even though it is in his contract I'm not sure they can enforce it.
He has had threating legal letters to his mothers house so is getting a little concerned.
Anyone had any experience with this sort of thing?

[Jasandjules]

Lose all commission? What is the exact term in the contract?

[TooMany2cvs]

DarylB90 said:

they want £650 back they paid him in commission in his last pay packet.
in his contract it stated that he would lose all commission owed if he ever resigned.

But it wasn't owed, because they'd already paid it to him.

Unless some of it was paid in advance, in respect of expected future commission, with some kind of balancing payment at the end of the financial year?

[AyBee]

Jasandjules said:

Lose all commission? What is the exact term in the contract?

This It very much depends on the wording of the contract.

[DarylB90]

Thanks for the responses so far guys.
We are waiting for the contract to be sent over so i'll let you know the exact wording.
He got paid on the 27th May which included April's commission.
He handed his notice in on the 20th May when payroll had already been done.
He hasn't been paid May's commission.
It's April's commission that they are chasing.

[mr rusty]

If says lose commission owed, surely they haven't got a leg, as it's already commission paid. It will depend on the contract itself, but unless it has "repay commission" I doubt it will apply, particularly as it is April commission paid in May.

[nealeh1991]

Hi all,

i actually have been dealing with this for the last week,

they are a night mare to deal with!

it says this in the company handbook,

Commission Payments on Leaving
In the month of leaving the Company, you will receive basic salary only, paid on a pro rata basis for the number of days worked. In addition, you will not receive any commission payments (whether accrued or otherwise) and which have not been paid to you.
It is standard practice to audit all leavers' final commission payments. The Company shall withhold any commission payment where there are grounds to believe that an employee may have manipulated or falsified events or company records.


any thoughts?

Thanks,

Neale

[AyBee]

nealeh1991 said:

it says this in the company handbook,

Commission Payments on Leaving
In the month of leaving the Company, you will receive basic salary only, paid on a pro rata basis for the number of days worked. In addition, you will not receive any commission payments (whether accrued or otherwise) and which have not been paid to you.
It is standard practice to audit all leavers' final commission payments. The Company shall withhold any commission payment where there are grounds to believe that an employee may have manipulated or falsified events or company records.

I am not a lawyer, however the amounts have been paid to him so "and which have not been paid to you." does not apply here. The above also seems to refer to "In the month of leaving" rather than the month of resignation. Has he/you asked them under which clause of his contract they feel they are able to reclaim commission amounts paid to him?

[nealeh1991]

AyBee said:

I am not a lawyer, however the amounts have been paid to him so "and which have not been paid to you." does not apply here. The above also seems to refer to "In the month of leaving" rather than the month of resignation. Has he/you asked them under which clause of his contract they feel they are able to reclaim commission amounts paid to him?

i quoted what you said and they have replied this...

As commission is paid a month in arrears in your leaving month of May had you not been leaving you should have received your April commissions. As this was your leaving month you only receive basic pay and no commission is paid so this would mean in May you should not have received Aprils commissions.

I believe this is what the overpayment is in reference to.


Personally i think I am just going to set up a payment plan with them, very much doubt i am going to win..

[colinjy]

but did you get paid May's commission ?

[nealeh1991]

colinjy said:

but did you get paid May's commission ?

I didnt no, i would of got May's commission at the End of June,

What they are saying, I think, is because i left in May, i don't get April's commission,

if i would of left 1st/2nd day in June i would of lost May's commission, not Aprils,

[AyBee]

nealeh1991 said:

AyBee said:

I am not a lawyer, however the amounts have been paid to him so "and which have not been paid to you." does not apply here. The above also seems to refer to "In the month of leaving" rather than the month of resignation. Has he/you asked them under which clause of his contract they feel they are able to reclaim commission amounts paid to him?

i quoted what you said and they have replied this...

As commission is paid a month in arrears in your leaving month of May had you not been leaving you should have received your April commissions. As this was your leaving month you only receive basic pay and no commission is paid so this would mean in May you should not have received Aprils commissions.

I believe this is what the overpayment is in reference to.


Personally i think I am just going to set up a payment plan with them, very much doubt i am going to win..

I'd still fight it if I were you but it all depends on how much effort you want to put into it.

nealeh1991 said:

it says this in the company handbook,

Commission Payments on Leaving
In the month of leaving the Company, you will receive basic salary only, paid on a pro rata basis for the number of days worked. In addition, you will not receive any commission payments (whether accrued or otherwise) and which have not been paid to you.
It is standard practice to audit all leavers' final commission payments. The Company shall withhold any commission payment where there are grounds to believe that an employee may have manipulated or falsified events or company records.

The bit in bold above says that you will not receive any commission payments which have not been paid to you. April's commission payment has been paid to you and therefore does not apply in this case in my opinion, but like I say I am not a lawyer, this is just how I'd fight it.

[Pieman68]

Did you resign on the 20th of May with immediate effect was there a notice period? Surely if you resigned on the 20th with a months notice you would still be working for the company until June - were you put on gardening leave or allowed to use accrued holiday in lieu of notice?

[nealeh1991]

Pieman68 said:

Did you resign on the 20th of May with immediate effect was there a notice period? Surely if you resigned on the 20th with a months notice you would still be working for the company until June - were you put on gardening leave or allowed to use accrued holiday in lieu of notice?

I resigned on the 20th May, had to give 1 weeks notice,

A few weeks into June, i got paid holiday pay i hadn't taken,

[anonymous-user]

IANAL, however on first glance it looks fairly clear (although with some clumsy language). In the month you leave you will be paid your basic salary only. Any commission you've accrued from previous months that has not yet been paid will not be paid.

It looks like the OP might have been overpaid.

[AyBee]

janesmith1950 said:

IANAL, however on first glance it looks fairly clear (although with some clumsy language). In the month you leave you will be paid your basic salary only. Any commission you've accrued from previous months that has not yet been paid will not be paid.

It looks like the OP might have been overpaid.

How so? He has been paid April's commission, they want April's commission returned...nothing in the handbook says they can reclaim commission which has been paid. Looks like he's received what he should have received and they're trying to pull a fast one.

[anonymous-user]

By the facts in front of us the commission payment looks to have been made in error and the company are asking for it back.

I presume the subject of the OP was paid commission in arrears the month following the one in which it was accrued. This means the commission earned through April would be due in May's salary run. The Subject left the company in May, and the contract says only basic salary is paid in the month you leave and you will not be paid any accrued commission. If April's accrued commission was due to be paid in May, and the Subject left in May, and the contract says no commission, accrued or otherwise, will be paid in May, the month the Subject left, it looks like the Subject owes the ex-employer the commission they paid in error.

I could of course be reading it wrongly.

[AyBee]

I see where you're coming from, but it mentions nothing about paying in error, it says which have not been paid, the OP has been paid commission, therefore he's within the wording of the handbook and allowed to keep it IMO and I'd argue that very strongly if I wanted to keep the money. I think it's generally accepted that the company keeps commission for the month in which the employee leaves, I think it's fairly harsh on the employee to think that they can claim back commission for the month prior to the employee leaving.

Also, is a month a calendar month or a payment month (I don't know if your handbook defines months OP?), if it's the latter, then the paragraph from his handbook has been abided by...

[MagicalTrevor]

Surely the only thing he's not entitled to is commission from May (the month in which he left). The company is fighting over April's commission.

The person has worked most of May and earned commission during that period and I don't think they're expecting that. Even though the handbook is badly worded, that's surely the spirit of the policy, is it not?

[zollburgers]

If you hadn't received the commission would you have felt cheated or were you not expecting any in your last payment?

They do state "In the month of leaving the Company, you will receive basic salary only" and "you will not receive any commission payments (whether accrued or otherwise)". They obviously intended to "audit all leavers final commission payments" but made a mistake and yours slipped by.

I think they are taking the piss a bit with their terms but the spirit of the clause appears to be that you should have got no commission and only did so because of their mistake.