ADJUDICATION OFFICER DECISION

Adjudication Reference: ADJ-00012462

Parties:

	Complainant	Respondent
Anonymised Parties	Sales Representative	Technology Company

Representatives

Solicitors

Complaints:

Act	Complaint/Dispute Reference No.	Date of Receipt
Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991	CA-00016355-001	16/12/2017
Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991	CA-00016355-003	16/12/2017

Date of Adjudication Hearing: 13/03/2018

Workplace Relations Commission Adjudication Officer: Rosaleen Glackin

Procedure:

In accordance with Section 41 of the Workplace Relations Act, and following the referral of the complaints to me by the Director General, I inquired into the complaints and gave the parties an opportunity to be heard by me and to present to me any evidence relevant to the complaints.

Background:

The Complainant was employed from 1st February 2016 until the employment terminated on 17th November 2017. The Complainant was paid €4042.00 gross per month and he worked 37.5 hours per week. The Complainant referred a complaint to the Workplace Relations Commission on 16th December 2017 under the Payment of Wages Act, 1991 alleging an unlawful deduction of £3550 from his wages on 24th November 2017.

Summary of Complainant’s Case:

The Complainant stated he had been employed with the Respondent Company on 1st February 2016 and he tendered his resignation effective from 17th November 2017. He was paid €46,200 gross per annum and he worked 37.5 hours per week. He stated he was issued with a written statement, signed and dated by both Parties on 14th January 2016. He was also paid commission on a monthly basis and there was a Commission Scheme in place. The Company financial year runs from April – March. The Company decided to make a number of changes to the commission structure and the targets placed on sales people that it would pay a “draw” for 6 months from May to November 2017 @ 75% of monthly commission. This was never communicated to the sales team in writing nor was there any clause concerning a clawback. The Complainant stated that his Contract makes no reference to a clawback. This clawback was only made known to him following his exit interview held on 9th November 201 and he only received confirmation in writing of money he allegedly owed on 16th November 2017, the day before he was to exit the Company. He stated he was not afforded any opportunity to query the Company figures especially in the context of “deals” that had not been allocated to him against his target. He stated that as he was leaving the Company on 17th November 2017, he did not have access to Company accounts and he stated this was deliberate on the part of the Company. He also stated that at his exit interview on 9th November 2017 the named HR employee confirmed to him that his contract did not include a clawback Clause. The Company have also not provided him with any breakdown as to how they arrived at their calculations. He stated that in April 2017 he was informed of the accounts he would have access to and that he would be paid commission on all these deals that the Company closed within these accounts. He stated this was not complied with by the Company and deals worth €341,000 were closed on these accounts and reallocated to others within the Company who did receive Commission.

The Complainant stated that he received his final wages dated 24th November 2017 from which tuition fees of €1800.00 was deducted and which is not in dispute but that there was a deduction of €3550.00 being commission he allegedly owed to the Respondent. He received wages of €15.35 on that date.

The Complainant provided a list of named Companies which he alleged he had completed totalling €642,677.00. On that list he also identified 6 named Companies which he alleged had been allocated to other employees who had been paid the Commission in June and July 2017, even though he had completed them.

The Complainant confirmed he had been paid Commission of €10,884.45 May to October 2017, based on 75% of monthly commission due. The Complainant is alleging that the deduction of €3550.00 made from his wages on 24th November 2017 is an unlawful deduction.

Summary of Respondent’s Case:

The Complainant was employed from 1st February 2016 until 17th November 2017. He was provided with a Contract of Employment – copy provided with a gross base salary of €42,000. During the course of his employment he was advised of the Company annual Sales Compensation Plan and the Respondent Company provided a copy of the FY 18 Plan General Terms and Conditions effective from 1st April 2017. The Complainant was given a copy of the Plan and he accepted it – evidence of his acceptance provided to the Hearing.

In order to incentivise staff to reach their respective annual sales targets, the plan provides for the set level of commission in advance at the outset of each year. The Plan expressly states that failure to meet targets will enable the Respondent to “recover all advances against Compensation that are not offset against Commissions or Bonuses. Upon termination of employment or transfer to a position not compensated under this Plan, negative compensation balances are due and payable immediately, subject to law”. The Plan also provides as follows – “ (named) reserves the right to take credit against any compensation otherwise owed, including, but not limited to, base salary, incentive payments, any outstanding Recoverable Draw payments or other advances against Compensable Bookings Credit, payment in lieu of notice on termination of employment and severance pay”.

The Respondent confirmed to the Complainant, in writing, on 15th November 2017 that he would not receive his final salary – copy provided. There were outstanding monies owed to the Respondent in relation to tuition fees and overpayment of commission to him. The amount owed by the Complainant was communicated to him in writing on 16th November 2017. He allegedly owed €10,884.45 and he was notified that the sum of €3550.00 would be deducted from his final salary. He was also informed that he would then owe the Respondent the sum of €3520.54, net and this is still owed by the Complainant.

The Respondent then referenced Section 5 of the Payment of Wages Act and stated as follows – (a) the Complainant was verbally advised by Management at the outset and during his employment of the Respondent’s right to recover commission advances in the event of termination of the employment (b) the Complainant was provided with a copy of the Plan and he confirmed his acceptance which did include the Respondent’s right to recover commission advances via deductions from salary (c) The Complainant confirmed his acceptance of the Plan (d) he was reminded of the applicable provisions of the Plan in advance of the deduction being made from his wages in November 2017.

The Respondent was requested to provide evidence of their calculations which were not made available at the Hearing and this was done on 9th April 2018. In this, which was copied to the Complainant, the Respondent confirmed that of the 33 Customers identified at the Hearing as having been allocated to the Complainant the Respondent stated in this correspondence that 17 had only been allocated to the Complainant and that he had been paid commission on these but that a further 16 had been allocated to other employees who had been paid Commission.

Findings and Conclusions:

On the basis of the evidence, written submissions, correspondence from the Respondent dated 9th April 2017, an email from the Complainant dated 8th April 2018 and response email dated 11th April from the Complainant I find as follows –

Both Parties confirmed that the Complainant had been provided with a written statement of his Terms and Conditions of Employment – his Contract of Employment – signed and dated by both Parties on 14th January 2016. Both Parties also confirmed that this Contract provides for a Basic Salary of €46,200.00 per annum and not €42,000 as stated by the Respondent in their submission to the Hearing.

Both Parties also confirmed that this Contract of Employment did have a provision for participation by the Complainant in a Commission Scheme. However both Parties confirmed that the Contract of Employment does not have a provision for a clawback, a deduction, on termination of the employment. The Respondent argued that the Complainant was informed verbally (my emphasis) of the right of the Respondent to make a deduction from the wages of the employee on termination of the employment. This is disputed by the Complainant.

Both Parties confirmed that the Complainant was informed of the deduction verbally on 9th November 2017 and then in writing on 16th November 2017, and that he left the employment on 17th November 2017. Both Parties agreed that the sum of €3550.00 was deducted from the Complainant’s final salary paid to him on 24th November 2017.

The Complainant did provide a list of his Customers and the value of each customer sale in the value of €642,677.00 to the Hearing. The Respondent was unable to provide this at the Hearing and by agreement at the Hearing this information was to be forwarded within 4 weeks. This was provided to the WRC on 9th April 2017. The Complainant responded on 11th April 2018 disputing the Respondent’s submission. The Respondent stated that of 33 Customers identified by the Complainant at the Hearing on 13th March 2018 he had been paid commission for 16 allocated to him while the Respondent stated that a further 16 had been allocated to other employees and they had been paid commission. The Complainant had identified this as an issue at the Hearing where he had identified 6 named customers of his where other employees had been paid commission on these in June and July 2017. Also the Complainant had stated that he was not provided with any opportunity by the Respondent between receipt of an email at 3.58pm on November 16th 2017 and the last day of his employment on 17th November 2017 to discuss the allocation and payment of commission and any issues in dispute and he had not received this until he received the letter dated 9th April 2018 from the Respondent sent to the WRC.

Section 5(1) of the Payment of Wages Act, 1991 – 2015 provides as follows – (1) An employer shall not make a deduction from the wages of an employee…unless – (a) the deduction…is required or authorised to be made by virtue of any statute or any instrument made under statute, (b) the deduction…is required or authorised to be made by virtue of a term of the employee’s contract of employment included in the contract before, and in force at the time of, the deduction…or (c) in the case of a deduction, the employee has given his prior consent in writing to it”.

Section 5(1)(a) is not applicable to this complaint. Section 5(1)(b) and (c) are as both Parties confirmed at the Hearing that the Complainant’s Contract of Employment did not provide for a deduction in relation to the Commission Scheme. Both Parties also confirmed to me at the Hearing that the Complainant did not give his prior consent in writing to the deduction.

I find the Respondent is in breach of Section 5(1)(b) and (c) of the Payment of Wages Act, 1991 – 2015.

Decision:

Section 41 of the Workplace Relations Act 2015 requires that I make a decision in relation to the complaint in accordance with the relevant redress provisions under Schedule 6 of that Act.

In accordance with Section 41(5) of the Workplace Relations Act, 2015 and on the basis of my findings above I declare the Complainant is well founded. The Respondent has breached Section 5 (1)(b) and (c) of the Payment of Wages Act, 1991-2015. I direct the Respondent to pay the Complainant the sum of €3550.00, subject to any lawful deductions, within 42 days of the date of this Decision.

Dated:

Workplace Relations Commission Adjudication Officer: Rosaleen Glackin

Key Words: 13.06.2018

Payment of Wages Act – Section 5 – breach of Section 5(1)(b) and (c) – Directed to pay the Complainant €3550.00 within 42 days