EMPLOYMENT APPEALS TRIBUNAL
CASE NO.
PW246/2015
APPEAL(S) OF:
Meridian Motors Limited -appellant
against the recommendation of the Rights Commissioner in the case of:
Paul Kavanagh -respondent
under
PAYMENT OF WAGES ACT 1991
I certify that the Tribunal
(Division of Tribunal)
Chairman: Ms D. Donovan B.L.
Members: Mr J. Browne
Ms S. Kelly
heard this appeal at Carlow on 16th May 2016
Representation:
Appellant: A manager and a director from the company
Respondent: In person
Background:
This matter came before the Tribunal by way of an appeal by the appellant employer against the decision of the Rights Commissioner pursuant to the Payment of Wages Act 1991(reference: r-151591-pw-14/RG) in respect of an alleged failure to pay the respondent employee the correct rate of commission for the month of May 2014.
The contract of employment entered into between the parties provided for the payment of commission in accordance with a Sales Commission Model.
It was the appellant employer’s position that the relevant parts of this Model provided for payment of commission as follows:-
Commission at the rate of 7% for each unit in the monthly unit target which achieved a margin of €1,500 provided that the monthly unit target was achieved.
Where the monthly unit target was not achieved a bonnet fee of €75 for units 1 to 6 which achieved a margin of €500 and €90 for each other unit which achieved the €500 margin.
The appellant employer contended that because the 13th unit in the May figures had been sold to the respondent employee it was a trade car sold at cost price and was not entitled to be included in the monthly unit target for May. Therefore, it was submitted that the respondent employee did not achieve the monthly unit target for May and was entitled to commission on a bonnet fee basis only.
It was the respondent employee’s position that the commission of 7% should be paid provided that either the monthly unit target or number of retail unit sales had been reached. As his commission for April and May 2014 had been paid together he produced to the Tribunal two Sales Commission Claim Forms, one for April and one for May, in order to establish proof of the shortfall in commission payments. He had been paid €2,245 commission in respect of April and May 2014 but claims the correct figure was €3,397 which left a shortfall of €1,152.
Determination:
Having considered the evidence adduced at the hearing, the Tribunal finds that commission is wages for the purpose of the Payment of Wages Act 1991.
The Tribunal finds that where the monthly unit target figure was not achieved commission should be paid on a bonnet fee basis and where the monthly unit target figure was achieved commission was payable at the rate of 7% in respect of each unit which achieved a margin of €1,500 and a bonnet fee paid on those units which did not achieve the margin of €1,500 but which achieved a margin of €500. To hold otherwise would be an absurdity and would create a situation whereby an employee who had achieved the monthly target but only achieved the margin of €1,500 on a few of those units might be paid less commission than an employee who failed to achieve the monthly target.
The Tribunal finds that the respondent/employee reached his unit monthly target figure of 13 for the month of April 2014 and accordingly was entitled to be paid commission at the rate of 7% on each of the 8 units which achieved the margin of €1,500 or more and a bonnet fee of €75 per unit on units 1, 4 and 7. The commission accordingly amounts to a figure of €1,533.00 for the month of April 2014.
The Tribunal finds that the 13th vehicle purchased by respondent/employee should be counted in the monthly unit target figure. The clause in the contract of employment regarding commission and the Sales Commission Model make no reference to exclusion of units purchased by employees. If the appellant/employer wished to exclude this vehicle this should have been made clear to the respondent/employee prior to the purchase by him of the vehicle. Accordingly the Tribunal finds that the respondent/employee reached his unit monthly target figure of 13 for the month of May 2014 and was entitled to paid commission at the rate of 7% on each of the 9 units which achieved the margin of €1,500 or more and a bonnet fee of €75 on units 7 and 8. The commission accordingly amounts to a figure of €1,608.00 for the month of May 2014.
The combined total for commission for April and May 2014, therefore, amounts to €3,141.
The Tribunal notes that in the Sales Commission Claim Form for April 2014 a bonnet fee of €75 was claimed in respect of unit 2 although the €500 margin was not achieved and that an amount of €80 was claimed for unit 7 although the €1,500 margin was not achieved.
The Tribunal notes that in the Sales Commission Form for May 2014 bonnet fees of €75 per unit was claimed for units 2, 4 and 7 even though the target margin of €500 was not achieved and that commission of €101 was claimed for unit 8 even though it had not made the €1,500 margin and accordingly a bonnet fee of €75 should apply.
For the foregoing reasons the Tribunal finds that the claim under the Payment of Wages Act 1991 succeeds and the Tribunal awards the respondent/employee the amount of €896.00 being the difference between the amount due for April and May 2014 of €3,141 and the amount already paid of €2,245. Thus the Tribunal varies the Rights Commissioner Decision reference: r-151591-pw-14/RG.
Sealed with the Seal of the
Employment Appeals Tribunal
This ________________________
(Sgd.) ________________________
(CHAIRMAN)