Act

Complaint Reference No.

Date of Receipt

Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991

CA-00016635-001

04/01/2018

The complainant asserts that she is entitled to unpaid wages arising from commission; the respondent denies the claim.

The complainant was commercial manager for a named magazine published by the respondent. Her role related to online and offline sales. Commission was offered on all net sales and this later included cross-sales. She had raised an issue with expenses and they were paid in November 2017. Her initial six-month contract was extended by three months, but not extended thereafter.

There was dispute whether the complainant was entitled to commission in respect of two clients. The respondent said it would investigate this but had not paid this to the complainant by the 4th January 2018. She was owed commission for the last quarter of €1,384.60.

The complainant commented that the respondent’s correspondence distinguished between a “lead” and a “sale”. She said that PR companies would email the commercial director to offer stories and commercial options were passed to the complainant. She, for example, suggested doing a reader trial and digital marketing for one client. She was introduced to the second client and brainstormed with them about a product they were bringing out. She created a campaign and this amounted to a sale. A sale is recorded on a sales book which is used for invoicing the client and is a shared document. The first client was invoiced for €4,950 and the second for €4,000.

The complainant outlined that once she achieved sales of €15,000 in a month, commission was paid at 10% and anything over €20,000 was paid at 20%. This included direct sales, which were communicated to managers. There were cross-sales where she completed the sale but the client opted for another magazine in the group. There was nothing in writing what happened to cross-sales as before, sale managers did not cross-sell. The complainant said that she had not broken down the cross-selling element.

The complainant outlined that she only received the contract in October 2017. Sales of the July and August 2017 edition were poor as they had been in these months in previous years. She was given another three-month sales list and was told she would get access to all sales and that cross-selling would be allowed. Commission was payable when space was sold on her publication. The campaigns manager had said the complainant would get commission for a sale involving a high street clothes retailer. It was only in October that a named colleague became involved with the second client, which was a ‘hot lead’ the campaigns manager passed to the complainant. The complainant brought in a named pharmacy chain which cross-sold to other publications. The complainant was not paid commission for thisbut should also have received commission for other cross-sales. The complainant said that she has expected to have existing accounts allocated to her but this did not take place. The Commercial Director said the complainant would get commission a beauty products client and the complaint had closed off a watch account.

The respondent submitted that the complainant started on the 1st April and received a contract on that day. Her contract was renewed on the 1st October for three months. It submitted that the complainant had incorrectly added up her entitlement to commission. There was a quarterly target and not a monthly target. Achieving commission required meeting the quarterly target of €45,000. This was the figure to be used in assessing commission. This is fair on both sides as advertising is variable. On this basis, the complainant entitlement was reduced from €1,340 to €1,053.

The complainant’s first three-month period started on the 1st April and she had three reckonable periods. The complainant first worked on the June issue of a named publication. She has chosen to aggregate qualifying periods. She has not met any targets over the proper three-month periods and never hit the target of €45,000.

On the 14th December, the respondent queried 11 advertising campaigns, but the complainant only responded with regard to two clients. It submitted that the dispute was about more than these two campaigns. It submitted that the complainant was entitled to net sales, i.e. minus any commission owed to an advertising agency or the cost of placing the ad. The contract refers to “your sales” and the complainant was not entitled to the sales of other people. The Commercial Director told the complainant that it was the person who makes the sale that gets the benefit. The complainant never made a sale for the other magazines, so she had no entitlement to cross-selling commission.

The Commercial Director also explained that there were certain clients that she dealt with, irrespective of which magazine they advertised in. She dealt with them through one publication, but this applied to all magazines. They would be recorded on the sales sheets, but not on the commission sheets. The complainant was not entitled to commission for administrative work. It submitted that the complainant needed all the ads in the folder to meet any target.

The first client was dealt with by the campaigns manager and the email from the PR firm of the 2nd October 2017 reflects her personal intervention regarding the reader survey. The campaigns manager had replied that she did not do sponsored posts but proposed doing a magazine feature. She passed this on to the complainant to price, but this was the campaign manager’s sale. The campaigns manager was also entitled to the commission for the high street clothes retailer.

The Commercial Director outlined that she oversaw the whole company, including the main publication of the group and monitored the other magazines. She managed one deal with a food distributor with no involvement of the complainant. A cosmetics group were her longstanding client and she managed their bookings twice a year for the whole group. In respect of a watch manufacturer, the Commercial Director said that she had worked with this company for several years. She had extensive conversations with their marketing representative and spoke about a budget of €4,000. She brought the complainant along to meet the client. The meeting was between her and the company’s representative. The sale was already completed, and she let the complainant manage it. The email from the company asks that the respondent confirm €4,000 as the cost of the campaign. In respect of a travel agency, the Commercial Director said that this was their travel partner and she made this sale. There is no mention of the complainant on the email thread and this was done by the Commercial Director. A named department store client was a longstanding client and primarily a client of a named magazine.

The Commercial Director said she tried to get this client to advertise in the publication managed by the complainant. They agreed to this without reference to the complainant. The Commercial Director said that the contract with a named high street retailer came out of her contact with the client. The entire conversation was between this client and the Commercial Director, including the email of the 21st June 2017. Another account was a new market targeted at a younger audience. The Commercial Director saw the opportunity for a reader event and the emails were circulated to the distributor and the editor. The Commercial Director said that there was no policy on cross-selling, so where she sold space on a publication, the complaint would not get the benefit. The Commercial Director’s exclusive clients amounted to 5% of the potential business. She never tried to take over any ad campaign. Most of the above were primarily clients of one publication who extended sales to other publications. It was for the complainant to explore other opportunities. The complainant had no involvement in many of the campaigns she sought commission for. The complainant had not made a sale in respect of the nutrition client and only did administrative tasks.

The respondent submitted that the complainant has not taken a three-month average and also counted the wrong three months. If one added the correct three months and used the complainant’s figures, she does not qualify for commission. The October, November and December figures show that the sales were made by others. The Commercial Director did not say that the complainant would get commission and there was no custom and practice in this regard. The contract referred to “your sales”. Advertising revenue dropped up to October 2017, so the Commercial Director had to leverage advertising space from clients to bump up the sales figures for the complainant’s publication. This increased with sales figures for the October 2017 magazine.

The complainant was allocated commission from her predecessor and also benefitted from her contacts. The emails show that the Commercial Director became involved in the watch client a long time before November. The Commercial Director accepted that the complainant initiated the lead with the named pharmacy group. The complainant and the Commercial Director met this client. The complainant would have been involved in respect of her publication and it was a team effort for the group. The complainant was not denied her publication’s element of the sale.

The respondent submitted that while the complainant said that the client came to the campaigns manager asking for a “freebie”, it was clear from the email that the client would pay for it. It could not be a freebie.

The definition of “wages” in the Payment of Wages Act specifically includes “commission … payable under [a] contract of employment or otherwise.” It follows that any commission that ought to have been paid to the complainant is “properly payable” within the ambit of the Payment of Wages Act.

The first issue is the contractual terms on which the complainant was entitled to commission. The respondent’s email of the 23rd March 2017 refers to “Basic target: €15,000 per month / Commission: 10% on all net sales of €15,001 to €20,000 per month / 20% on all net sales over €20,000 per month / Bonus paid quarterly based on target being reached for that quarter.”

A confusing element in this case is that the parties exhibit different documents entitled “statement of main terms and conditions of employment”. The documents differ in respect of the calculation period for commission. The one submitted by the complainant was attached to the respondent email of the 8th October 2017 and states “Commission is based on net sales figures, after costs of inserts/onsets/agency commission are deducted and calculated on a bi-monthly average. You will be paid monthly on the last working day of reach month by bank transfer. Your salary and commission will be reviewed at the end of your contract.”

The document submitted by the respondent to the adjudication contains the same provision, except refers to “on a 3-month average” instead of “bi-monthly”. Neither document makes any reference to cross-selling, i.e. where a sales representative obtains a sale on another publication in the respondent group.

A further difficulty is that there is no central document that sets out what commission a respondent employee accrues as they achieve sales. There were sales sheets, but whether this accrued commission depended on whether it was a cross-sale (any such entitlement was disputed), the identity of the client (the Commercial Director asserted that she dealt exclusively with several clients) or who achieved the sale (as opposed to doing administrative work).

It is not ideal that the question of one’s entitlement to commission be so unclear. While both parties clearly set out their interpretation of what commission was payable in this instance, I assess this as the amount stated in paragraph 3.04 of the respondent submission. I, therefore, find that the complainant is owed €1,050 in unpaid commission.

CA-00016635-001

I find that the complaint pursuant to the Payment of Wages Act is, to an extent, well founded and the respondent shall pay to the complainant redress of €1,050.

Payment of Wages Act / commission