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Alex J.
Alex J., Solicitor
Category: Law
Satisfied Customers: 3496
Experience:  Solicitors 2 years plus PQE
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i have been with my current employers for 6 years, in november

Customer Question

i have been with my current employers for 6 years, in november 2013 i stepped down from a managment position to be a sales consultant, as i had no pipeline i was offered a gaurantee of commision for the 6 months which ended in july. i have now been offered another job and wish to leave however my employer states they want the 6k back. can they legally recover this money from me?
Submitted: 2 years ago.
Category: Law
Expert:  Alex J. replied 2 years ago.
Hi,

Thank you for your question and welcome.

My name is AJ and I will assist you.

Your employer can only claw back the commission if there is an express contractual provision allowing them to do this.

Has the advance commission period now ended? Did you sign anything when you accepted it?

Kind regards

AJ
Customer: replied 2 years ago.

yes i signed a new contract which confirmed a lower salary and new commision rates etc. this said that i would receive 1,000pm for 6 months and then my new sales commision would over ride the guarantee. the thing is every year i have worked here i have made a substantial profit for the business and even i i walk away now i would have made them circa 30,000 in the first 6 months and will be leaving a 40,000 pipeline behind me, i just cant run the risk of them taking me to court for 6k..

Expert:  Alex J. replied 2 years ago.
Hi,

Thank you.

Unfortunately whether they take you to court or not is entirely their prerogative - even if it is unfounded and the claim has no merit.

Ultimately if your contract has no provision that allows them to claw back a commission then they cannot claw it back.

Did the commission have any caveats or conditions attached to it?

Kind regards

AJ
Customer: replied 2 years ago.


the contract had a 1 line statement saying that if i left the company within 12 months then the gaurantee would be repayable, and was no more specific then that. i understand they could probably withhold my final pay cheque once i hand my notice in but i simply cannot afford to pay the full 6,000.

Expert:  Alex J. replied 2 years ago.
Hi,

Thank you.

Can you send me the exact wording of that one line?

Kind regards

AJ
Customer: replied 2 years ago.


with effect from january 2014 untill 30 june 2014 you will be eligible to receive an initial funding payment to top up your personal commision earnings so that you will not be paid less than £916.67 per month. if your personal commision exceed this figure then you will be paid the personal commision without any initial fuding. following this period you will be paid in line with the 2014 mortgage consultant remuneration structure.


 


should you leave countrywide principle services with 12 months of receipt of the final initial funding you will be liable to reimburse the full value of all initial funding paid to you by the company. Should the above become applicable, reimbursement will in the first instance recoverable from any salary payment due to you. Any balance to be paid to the company within 30 days of leaving the company. By signing this document you are providing your agreement for such a sum to be deducted from your salary payment, should this clause be applicable.


 


 


the above is verbatum from the contract.

Expert:  Alex J. replied 2 years ago.
Hi

Thank you.

In the six month period in how many of those months did you earn more in personal commission?

Kind regards

AJ
Customer: replied 2 years ago.

one

Customer: replied 2 years ago.


3 of the 6 months i earned personal commision so the value of the guarantee was reduced.

Expert:  Alex J. replied 2 years ago.
Hi,

Thank you.

Just to confirm I have understood the arrangement correctly.

If in any of those six months you earned in personal commission more than the guarantee, you would be paid that figure?

So in effect there were only 3 months when you were paid the guarantee?

Kind regards

AJ
Customer: replied 2 years ago.


correct.

Expert:  Alex J. replied 2 years ago.
Hi,

Thank you.

I think based on reading this your employer does have a right of claw back save for the following:

1. The claw back should only apply to the guarantee payments - where your commission was paid in excess of this, then I do not think it can be intended that you should repay commission lawfully earned - quite simply because you have not actually been paid the so called "initial funding" if you have earned it.

2. If you look at the wording "initial funding payment to top up your personal commission earnings so that you will not be paid less than £916.67 per month" - to me this guarantee suggests that it is a top up as the wording is used. In my mind you only have an obligation to repay the initial funding which is the amount you are paid to top your earnings in the other three months to take your earnings to £916.67 - can you work this figure out? The other crucial point is it says you have to repay "the full value of all initial funding paid to you by the company" - on this basis say in one month you only earn £700, then the initial funding in that month will only by £216 - correct?

If that is how you interpret it as well I would use this as the basis of a negotiation to pay a vastly reduced figure from the £6k?

I look forward to hearing from you.

Kind regards

AJ

Customer: replied 2 years ago.


thanks alex,


 


i have checked my paylips from feb to july and they only paid £2206. am i safe to assume now that as my last months wage will be more than this amount then they dont have a leg to stand on in terms of asking for full amount of gurantee to be repaid as i never actually received that much anyway ?

Expert:  Alex J. replied 2 years ago.
Hi,

Thank you.

So actually the evidence on your pay slip shows that they never actually paid the guarantee?

This figure of £2,206 does this relate to commission you actually earned?

If they did not actually pay out on the guarantee then yes you have a strong defense that you should not have to repay it.

Kind regards

AJ

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