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Ben Jones
Ben Jones, UK Lawyer
Category: Law
Satisfied Customers: 46773
Experience:  Qualified Solicitor - Please start your question with 'For Ben Jones'
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I am a sales person paid a basic and commission. My company

Customer Question

Hi. I am a sales person paid a basic and commission. My company have recently put into our sales rules, not a document that we sign, a clause stating that if a customer leaves within 5 months of purchasing they are able to claw back the commission payment. They are enforcing this on one of my deals where a customer has left within the 5 months but due to no fault of mine. I actively tried to save the deal but to no avail. Is this lawful? Thank you
Submitted: 11 months ago.
Category: Law
Expert:  Ben Jones replied 11 months ago.

Hello, my name is***** am a qualified lawyer and it is my pleasure to assist you with your question today. How do they claw back the payment, is it done by deducting it from your pay? Also how long have you worked there for?

Please note I am going offline shortly so will likely have to reply in the morning, thanks

Customer: replied 11 months ago.
Hi its from my next commission. I have worked there for 2 years. Thanks
Customer: replied 11 months ago.
Hi. I was wondering if you are back online. Thanks
Expert:  Ben Jones replied 11 months ago.

Good morning and thanks for your patience. Deducting the pay from your future commission will amount to a deduction of wages because your commission will make up part of your wages.

Unless the employer has satisfied certain criteria, doing this will potentially amount to an unlawful deduction from wages, which is made illegal under the Employment Rights Act 1996.

Under law, an employer can only make deductions from, or withhold an employee’s wages in the following circumstances:

· If it is legally allowed (e.g. to deduct tax);

· If it is to recover an earlier overpayment of wages made by the employer;

· If their contract specifically allows for the deductions to be made; or

· If the employee has given their explicit written agreement for the deductions to be made.

If none of the above exemptions apply, the deductions will most likely be unlawful. So really they would need to have a specific clause in your contract allowing that, or if it is a separate document – one which is accepted and signed by you to provide your consent for this to happen.

This is your basic legal position. I have more detailed advice for you in terms of the steps you need to follow should they make the deductions in the absence of a relevant clause allowing them to do so, which I wish to discuss so please take a second to leave a positive rating for the service so far (by selecting 3, 4 or 5 stars) and I can continue with that and answer any further questions you may have. Don’t worry, there is no extra cost and leaving a rating will not close the question and we can continue this discussion. Thank you

Ben Jones, UK Lawyer
Category: Law
Satisfied Customers: 46773
Experience: Qualified Solicitor - Please start your question with 'For Ben Jones'
Ben Jones and other Law Specialists are ready to help you
Customer: replied 11 months ago.
Thanks for this. So even though they have introduced an amendment to the sales rules which I have not signed this document and the way it was explained is not the way it is being used. I would like to know further information thanks. I will rate the service.
Expert:  Ben Jones replied 11 months ago.

Thank you. Your rights really will come into play once the deductions have been made without the relevant provision being in place. In order to try and resolve this, the employer should be contacted in writing, advised that this is being treated as unlawful deduction of wages and ask them to pay back the money within 7 days. Advise them that if they fail to pay the money that is owed, legal proceedings could follow.

If the employer does not return the money as requested, the following options are available:

1. Employment Tribunal - the time limit to claim is only 3 months from the date the deductions were made. To make the claim, form ET1 needs to be completed and submitted - you can find it here: https://www.employmenttribunals.service.gov.uk/employment-tribunals

2. County Court – this is an alternative way to claim and the advantage is that the time limit is a much longer 6 years and is usually used if you are out of time to claim in the Tribunal. The claim can be made online by going to: www.moneyclaim.gov.uk.

Hopefully by warning the employer you are aware of your rights and are not going to hesitate taking further action they will be prompted to reconsider their position and work towards resolving this.

Customer: replied 11 months ago.
Thanks. Can I therefore clarify that putting a clause into an unsigned sales rule document does not give them the right to claw back commissions?
Expert:  Ben Jones replied 11 months ago.

That's correct because under law they can only make the deductions under the provisions mentioned above

Customer: replied 11 months ago.
Hi, Can I also clarify what happens with commissions yet to be paid. So we are paid an initial part of our commission then 4 months later a second stage. In our signed commission document which is part of our contract it details that we will be paid the full amount on installation in 1 sum. I take it therefore that legally they have to pay us both sets of commission even if the customer were to leave within the 4 month period as this is our signed agreement. Again the unsigned sales rules details the staged payment but this is not referred to in our contracts and is just meant to be a guidance document.
Thanks
Expert:  Ben Jones replied 11 months ago.

normally the contract would take precedence because that is the official contractually binding document. A guidance can be referred to on the side but if it is not part of the contract it would be just guidance, it would not have binding effect so in that case the contractual policy should be referred to first

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