Commission cut in half

[mark1979]

My employer has just handed me a letter that cuts my commission in half. The letter is dated 25th June and says that this change is effective from 1st July. They sent it recorded delivery but my flat is very difficult to find and I’m not there from about 730am until around 7pm. This change is a result of a meeting I had with them sometime in June, obviously I opposed this change and it was left that we would discuss again once my immediate manager was back from holiday. There has been no second meeting, nor has anyone even mentioned this to me at all.

What can can I do? Was I formally notified in June or today? If today can they retrospectively lower is for sales already made? I don’t get paid until the customer takes delivery, these will be in September.

[ULA]

Effectively your company will argue that it gave you notice in advance of implementing a change to the commission scheme, both in terms of the meeting with you and the letter. Even if your flat was difficult to find one of two things would have happened if the post-person could not find the flat the letter would have been returned to the company as undelivered and for which they would know you had not received it and secondly if you were out when the post-person attempted to deliver the letter they would have left a card for you to collect it.

In terms of your commission scheme is it detailed as a term/clause of your contract of employment or does the scheme documentation sit alongside your contract and is non-contractual which gives the company the right, given adequate notice, to change the structure of the scheme? This is an important question to get an answer to in terms of the guidance I can give you.

[mark1979]

Ula thanks for your reply. I have now read my contract, pay plan and company handbook and have made the following observations:

The writing on the envelope suggests it was attempted to be delivered to me and subsequently not collected from the post office before being returned to sender. There was no card through my door as I don’t have a postbox. The usual postman delivers my mail to the pub beneath my flat and I collect it from there on my way home each night. Most delivery drivers cannot find me at all. Not the company’s problem I know but before sending this letter why not speak to me? Or email it to me as well as posting it? Especially given that the previous meeting ended with a decision that we would meet again to discuss this further. The letter is dated just a few days after that original meeting.

As a quick bit of background, my pay plan is based on me selling 125 units for the year and has an OTE of £50,000. There is a volume bonus payable for selling 150 units. I have currently sold 159 units. The next best performer is on 95 units.

1. The pay plan says “this scheme is discretionary and runs from 1st January to 31st December 2019 only. The company reserves the right to alter the rules of this bonus scheme at any time.”
2. The handbook says “the company has a policy of excellence in all areas. Our aim is to promote outstanding performance through objective-setting, regular reviews, training and encouragement.” And goes on to say “the group undertakes to review salaries and wage rates on an annual basis. Any awards made are at the complete discretion of the company. The company is also committed to ensuring that we provide outstanding rewards for outstanding performance.”
3. The contract says “you may be entitled to benefit from a bonus/commission scheme as advised by your manager. Any such scheme is at the complete discretion of the company and the company reserves the right to alter the rules of such schemes at any time.”
4. The contract says “ the company reserves the right to make reasonable changes any of your terms and conditions of employment and you will be notified of any minor changes by way of a general notice to all employees and any such changes will take effect from the date of the notice. You will be given not less than one months written notice of any significant changes which may be given by way of an individual notice or a general notice to all employees.”

Nobody else is having their rate of commission cut. I now feel like I am being punished for doing my job well. The fact that I am being singled out does feel like I am being bullied. All I have done is been incredibly proactive in bringing in new business rather than just waiting for people to contact us or walk through our doors. The general sales manager said a number of times in our previous meeting “you are earning more than me”. Is this a personal vendetta by him? He says this directive has come from “above” but hasn’t said who from. Can I make any sort of SAR whereby I could request everything they have about me? Would this include every single email with my name in it? Would it even make any difference?

Additionally, my pay plan breaks down how my OTE is made up, it includes, salary, chassis commission, F&I commission etc etc. One thing that I have noticed today is that the figures used for chassis and F&I cannot be achieved by hitting target in my role. I no longer sell retail and employee, from February I only sell to employees of the manufacturer. So my chassis commission is listed as £19000 but that works out to £152 per unit (based on my target of 125 units) I get £125 per unit. F&I is listed at £7500 which averages out to £60 per unit but the most I can earn is £45 per unit. This is because retail sales can earn more per car and more per F&I than on employee sales.

Finally I now have a question about holidays and holiday pay. I get 23 days plus statuary bank holidays (of which there are 8) we are closed on 4 of these bank holidays but I work the other 4 and get a days holiday in return. For holiday pay, in addition to basic salary, we get £100 per day but those with more than 12 months service get a daily rate based on their average daily commission for the previous rolling 12 months. Mine is circa £130 per day on top of my salary. Would I earn that for all 31 days, just the 23 days holiday or 27 days as we are closed on 4 of the bank holidays? The pay plan lists holiday pay as included in the OTE at £2500 which implies 25 days @ £100 per day.

[ULA]

Thank you for the further details which are very helpful.

In regard to the documents you have now read through I have the following thoughts in order:

The pay plan - this is clearly a document that has a valid period which is for the calendar year 2019 in regard to the terms of the scheme. It is also very clear that it is discretionary and can be changed. Arguably this gives the company the ability to pay under the terms of the plan at its discretion and to change the scheme if it wants to.

The handbook - encouraging words around promoting and rewarding performance but again at its discretion.

The contract - this confirms what is set out in the pay plan about discretion and ability to change the rules of the scheme.

The contract further clause - allows for making changes to terms and conditions, however on this my view is that this is a significant change, not a minor one, as it affects your pay and therefore you should have been given not less than one month's notice. You had one meeting in June that was clearly meant to have a follow-up and then a letter dated 25 June does not provide for the relevant notice given implementation was 1 July, despite all the issues with the delivery of the letter.

Is the pay plan you are referring to where you have noticed the figures cannot be achieved your new pay plan i.e. the one that is supposed to be effective from 1 July?

My suggestion would be is that you arrange to have the meeting with your immediate manager that should have happened following their return from holiday. The two main issues you want to raise is the time given to notify of the changes is not in accordance with their contract terms since you believe this to be a significant change and secondly, if the pay plan you mention is the revised one then to be able to have it explained to you and put forward any arguments you may have about the achievability of targets once it is fully explained.

I am suggesting this as an approach in the first instance to see if it changes anything. Sometimes having the discussion and pointing these things out in a constructive manner can lead to there being a resolution. If not, then you can go on to consider more formal action such as grievances and SARs but doing so knowing you have tried the constructive approach first.

On the holiday pay question since you regularly get paid commission these payments must be included in at least 4 weeks of your paid holiday. So long as they are included in at least 4 weeks then are they meeting the statutory requirements, however they do have discretion to enhance this if they wish. Again I would suggest at the meeting you get clarification on how many days holiday you would get that rate.

[mark1979]

Ula

i have requested a meeting with both managers and HR for next week.

The unachievable target is on the original pay plan from
January. I have only noticed it now as I am number crunching.

If if a bank holiday falls on my usual
day off, Xmas day and Boxing Day this year for example are my usual days off, am I still entitled to those two days off at another time? Both days are bank holidays and we are closed.