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Ben Jones
Ben Jones, UK Lawyer
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I work for a global business operating a nationwide business

Resolved Question:

I work for a global business operating a nationwide business I the uk. Our terms of remuneration include significant bonus and commission packages. The national business is split into two areas which are headed up by two regional directors. The supposedly nationwide bonus and commission scheme which on paper is a nationwide scheme is applied differently between the two regions with additional qualifying criteria and clawback clauses applied by one regional director and not the other. Does this not infringe a right to equal pay?
Submitted: 1 year ago.
Category: Law
Expert:  Ben Jones replied 1 year ago.

Hello, my name is***** am a qualified lawyer and it is my pleasure to assist you with your question today.

Customer: replied 1 year ago.
Ok
Expert:  Ben Jones replied 1 year ago.

What reason has the employer provided in relation to the discrepancy?

Customer: replied 1 year ago.
The two regional directors supposedly retain the right to set their own criteria although this has not been put in writing via a policy or documented operating norm
Customer: replied 1 year ago.
They are also shifting targets without providing any written notice
Expert:  Ben Jones replied 1 year ago.

OK, thank you for your response. I will review the relevant information and laws and will get back to you in a short while. There is no need to wait here as you will receive an email when I have responded. Also, please do not responded to this message as it will just push your questions to the back of the queue and you may experience unnecessary delays. Thank you.

Expert:  Ben Jones replied 1 year ago.

Many thanks for your patience. This will not be an equal pay matter. The law on equal pay is actually frequently misunderstood. Many workers believe that there is a right to equal pay across the workforce, especially for workers that perform the same or similar jobs.

However, the reality is that employers are free to pay their employees whatever they want, inclusive of bonuses or commission, as long as it is above the current National Minimum Wage and in accordance with the employee's contract of employment. It is not generally unlawful to pay employees doing the same or similar jobs different rates. The only time this would be an issue is if the reasons for the difference in pay is discriminatory, due to a difference in gender. The relevant law was originally brought in to deal with the fact that many women were being paid less than their male colleagues for doing the same job.

Whilst this protection still applies, to be successful in a claim you must show that the reason for being paid less is actually gender-related. It is no good claiming that you are being paid less than someone else, unless it can be shown that the reasons for this difference in pay is due to gender.

Even if there was evidence that the reasons for the difference in pay may be gender-related, the employer could still try and rely on the 'genuine material factor' defence to defend any equal pay claim. This would occur where the employer can show that the difference in pay is due to:

· Past performance

· Seniority or length of service

· Different hours of work

· Geographical differences

· Different skills, qualifications and experience

· Pay protection following job re-grading

So unless there were discriminatory reasons for the difference in pay, there is nothing illegal in paying different rates even if the workers are performing the same job. I agree that is appears unfair and morally wrong, but unfortunately it is not illegal.

Instead, this would be a potential breach of contract matter. If your contract specifies the remuneration entitlement you get and how the bonus/commission is to be calculated and the employer does not follow these policies, then that could amount to a breach of contract. However, if the rules are not that specific and left for the employer to interpret and apply, then it would be more difficult to argue.

This is your basic legal position. I have more detailed advice for you in terms of the options you have should there be a breach of contract issue, 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

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Expert:  Ben Jones replied 1 year ago.

Thank you. so as mentioned the only potential comeback here is if the employer had not applied the bonus clause in way it was written, in other words if for example you had a specific way of calculating your entitlement but that was not actually applied in practice, resulting in less pay.

In that event it is a potential breach of contract and/or unlawful deduction of wages. 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.