ADJUDICATION OFFICER DECISION
Adjudication Reference: ADJ-00010061
A Business Development Manager
A Services Company
O'Malley Sexton Solicitors
Peninsula Group Limited
Complaint/Dispute Reference No.
Date of Receipt
Complaint seeking adjudication by the Workplace Relations Commission under section 77 of the Employment Equality Act, 1998
Complaint seeking adjudication by the Workplace Relations Commission under section 6 of the Payment of Wages Act, 1991
Date of Adjudication Hearing: 18/06/2018
Workplace Relations Commission Adjudication Officer: Peter O'Brien
In accordance with Section 41 of the Workplace Relations Act, 2015 and Section 79 of the Employment Equality Acts, 1998 – 2015 following the referral of the complaint(s)/dispute(s) to me by the Director General, I inquired into the complaint(s)/dispute(s) and gave the parties an opportunity to be heard by me and to present to me any evidence relevant to the complaint(s)/dispute(s).
The Complainant lodged a claim for alleged discrimination and for non payment of commission. Initial oral and written submissions were made at the Hearing and the parties agreed to allow further written submissions after the Hearing which took a period of approximately three months to conclude. In some sections of this decision the Company name of quoted cases has been deleted to protect the identify of the parties.
Summary of Complainant’s Case:
The Complainant commenced employment on August 8th 2016 and was his employment was terminated on June 16th 2017. He was employed as a Sales Development Manager.
The Complainants case under the Payment of Wages Act 1991 is that his letter of offer stated he would be paid commission of “up to 10% of the value of all new business secured” and this would be paid monthly providing the employer has received 25% of the fee from the Customer.
The offer letter does not refer to Sales, Commission and Bonus Scheme rules but says “they are issued separately and are enclosed”. However, they were not included in the letter of offer and the Complainant did not receive a copy.
The Complainant received five other policies but not the Sales, Commission and Bonus Scheme rules and he signed and returned all five.
In June 2017 the Complainant was due commission payments of 35,592.55 Euros.
The Complainant was the subject of a disciplinary process which concluded with him being dismissed in June 2017. He was never told he would lose his commission payments and was told on his dismissal that the Company were invoking the rules of the scheme which meant her did not receive this commission.
The Complainant is relying on sub section 5 of the Payment of Wages Act 1991 which states that the deduction must be authorised by statue, a term of the contract of employment or a person has given their prior consent. None of these situations apply to the Complainant.
The Respondent is relying on Section 5 (b) and (c) to justify the non-payment of the Complainants commission. In relation to sub section b the Respondent appears to be relying on a document which was never given to the Complainant. To date the Respondent has not produced any evidence that it was provided to the Complainant, by email or otherwise. The Complainant did not agree to the deduction and seeks payment of 35,592.55 Euros
With regard to the claim under the Employment Equality Act 1998 the Complainant made a verbal submission in addition to his claim form and he advised he suffered from depression and he was discriminated against due to this condition.
Summary of Respondent’s Case:
The Respondent denies all allegations of discrimination and that the Complainant is due any payment under the Payment of Wages Act 1991. It should be noted that the Respondent made a substantial and legal submission to the Adjudicator on both claims and it is not possible to summarise all the points made by the Respondent in this summary.
On June 14th 2016 the Complainant was issued with an employment offer letter stating “this offer is also conditional upon your acceptance of our Sales, Commission and Bonus Scheme rules as discussed at interview; a copy of which is attached”. The correspondence was signed by the Complainant on June 26th 2016. Under the heading Commission the contract expressly states that such payment are “Subject to the full details contained in the attached Sales, Commission and Bonus Scheme Rules”.
It is accepted that the Respondent does not have a signed copy of this document on the Complainants file , nonetheless, the Complainant signed his acceptance letter of this document on to occasions i.e. the offer letter and the contract of employment.
Furthermore the Respondent submits that every starter pack issued to new Business Development Managers contain a copy of these rules and it is noted that 27 of the 28 Business development Managers hired by the company signed the rules with the Complainant being the exception.
The Claimant has taken a claim that he there has been an “unlawful deduction” from his wages. This claim is based on Section 5 of the Payment of Wages Act, 1991, which concerns the “regulation of certain deductions made and payments received by employers.”
However, it is submitted that there has been no “deduction” from the Claimant’s wages for the purposes of the Payment of Wages Act, 1991 as the monies in dispute are not “wages” that were “properly payable” to him. Accordingly, the Claimant cannot pursue this claim under the Payment of Wages Act, 1991.
As per the Respondent’s Sales, Commission & Bonus Scheme Rules, there are specific rules that govern commission payments in the Respondent company:
“All commission in relation to new and renewal business or consultancy work is all paid at the end of the calendar month following that in which the business was conducted, but only if the company has received a minimum percentage of the fee from the client. This is 25% of the contract value for all new business, except those of five years in duration where 15% of the fee needs to have been secured. If the minimum percentage fee has not been received at the time, commission will only be paid on the due pay date at the end of the calendar month, following the calendar month in which the minimum percentage of the fee has been received…
If the contract of employment is terminated either by the company through dismissal or by the Business Development Executive through resignation, then special rules apply in relation to commission and any bonus or incentive payments that might otherwise have been payable.
Commission payments on new and renewal business are only paid if the Business Development Executive is in the employment of the company at the end of the calendar month when the commission payment would normally become payable…” (Page 95)
Furthermore the Sales, Commission & Bonus Scheme Rules specify that it was an express written term of the Claimant’s employment that he has
“no claim whatsoever on any commission payments that would otherwise have been generated and paid, if they are not in employment on the date when they would normally have been paid” and that “such payments of commission and bonuses are express contractual terms and therefore are not sums 'properly payable' under the contract and therefore are not deductions from pay in relation to Section 5(6) of the Payment of Wages Act 1991.” (Page 96)
It is therefore clear that in order for the commission monies to become payable as wages that certain conditions had to be satisfied. Firstly, the Respondent must have “received a minimum percentage of the fee from the client”. Secondly, the Claimant must have been “in the employment of the company at the end of the calendar month when the commission payment would normally become payable.”
If you consider the first condition alone, namely that a minimum percentage of the fee must be received, it is submitted that the Sales, Commission, and Bonus Scheme Rules and the Claimant’s letter of offer of employment and the Claimant’s contract of employment all state that commission is only payable once 15% of the contractual fee has been received from those clients with 5 year contracts, and 25% of the contractual fee has been received from clients with contracts of less than 5 years’ duration.
In this respect it is noted that of the 61 contracts signed by the Claimant in his employment with the Respondent, at the date of his dismissal the Respondent had only received the appropriate fee percentage from 25 of those clients. Accordingly, the Claimant has no entitlement to the commission monies in respect of the remaining 36 contracts by virtue of the first condition alone and his claim fails on that basis that the commission monies in question were not “wages that are properly payable” by virtue of the fact that the Respondent had not “received a minimum percentage of the fee from the client” and therefore the claim is debarred in respect of those specific sums by virtue of section 1 and section 5(6) of the Payment of Wages Act, 1991.
Indeed, the Claimant is seeking to claim for commission that may never have become payable to him even had he remained in employment as payment of commission only occurred where “the minimum percentage of the fee has been received” by the Respondent from the client in question and some of the clients that the Claimant signed have never paid the Respondent or are significantly in arrears to date in terms of contract fees to be paid.
In any event, the Respondent submits that the Claimant has no entitlement to claim any of the commission monies in question as they cannot be deemed “wages that are properly payable” by virtue of the second condition and the fact that the Claimant was not employed at the end of each relevant month. Therefore, the entire claim is debarred by virtue of section 1 and section 5(6) of the Payment of Wages Act, 1991.
The second condition requires Claimant to be employed at date on which the payments in dispute may have become payable to him. It is submitted he has not satisfied the contractual conditions surrounding the payment of such monies and, accordingly, the monies were not “payable under his contract of employment or otherwise”.
The Respondent would refer to the Labour Court decision in Bord Gáis Energy Ltd. -v- Thomas (PWD1729), the facts of which are remarkably similar to the current proceedings. That case concerned “a Performance Related Award (PRA) scheme and any payments arising from that scheme are normally paid in the February following the year under assessment. One of the requirements of the scheme is that in order to receive an award you must still be in employment on the date that payment is to be made.”
The Claimant in that case was arguing that he was entitled to be paid the PRA for 2016 as he had worked the full year. However, his employment had ended in January 2017 whereas the PRA payment fell due to be paid in February 2017. The Labour Court concluded as follows:
“The question that arises is whether, or not the PRA payment was properly payable to the complainant. In considering that question the Court places considerable weight on the fact that the complainant’s contract sets out the eligibility requirements for payment of the PRA… In all the circumstances of this case and on the evidence before it the Court is satisfied that the Complainant did not meet the criteria to be eligible for a payment under the scheme. Therefore, the bonus arising from the PRA scheme was not “properly payable” and no contravention of the Act occurred.”
The Respondent would also refer to the UK EAT decision in X Ltd (Name deleted) -v- Sweeney  IRLR 49, the facts of which also concerned a claim from a former sales employee of the Respondent’s UK operation for payment of commission following the termination of the employment relationship. The UK EAT considered the relevant legislation, that being, section 13 of the Employment Rights Act, 1996, in the context of the same Commission Rules and concluded that such commission monies did not amount to wages “properly payable” under section 13(3) of the Employment Rights Act. It is respectfully submitted that a similar interpretation must apply in the present proceedings given the strikingly similar wording found in section 5(6) of the Payment of Wages Act 1991 and the following from section 13(3) of the Employment Rights Act:
“Where the total amount of wages paid on any occasion by an employer to a worker employed by him is less that the total amount of the wages properly payable by him to the worker on that occasion (after deductions), the amount of the deficiency shall be treated for the purposes of this Part as a deduction made by the employer from the worker's wages on that occasion.”
Notably, the case of X (Name deleted) Ltd. -v- Sweeney  IRLR 49 was cited by the England and Wales Court of Appeal in Commerzbank Ag -v- Keen  EWCA Civ 1536 which concerned a discretionary bonus arrangement in place at the bank which provided that no bonus would be paid if, at the relevant payment date, the employee was not employed by the bank or was under notice. Mummery LJ of the Court of Appeal concluded that the employee was not entitled to the bonus, determining as follows:
“Morrison J [of the High Court] concluded that it was arguable that the decision not to pay Mr Keen any bonus for the work performed by him in 2005 was an irrational exercise of the discretion as to the timing of the bonus award (paragraph 29). The Bank had enjoyed the benefit of his work at the Desk until it closed it down mid-year. It had not paid him for it. He must have been working on the assumption and in the expectation that he would receive a bonus for the work he did.
The serious difficulty in the way of this argument is that, as a matter of construction, it is clear that Mr Keen is not entitled to a bonus if, on the date of payment, he is not employed by the Bank. He was not employed by the Bank in March 2006 when the bonuses were paid. There was nothing unusual in the bonus payments being made in the March of the following year. In the case of the 2003 and 2004 bonus payments were made in March in respect of the past year…
I agree that, for these reasons, the Bank was under no obligation to pay Mr Keen a bonus for the year 2005 or for part of the year. There is no real prospect of success in establishing a breach of contract by the Bank in respect of the decision not to pay him a bonus for the year 2005.”
Accordingly, in accordance with it is submitted that the Claimant has no entitlement to claim the monies in question as the monies in question are not “wages that are properly payable” by virtue of the fact that he was not employed at the end of each relevant month and therefore the claim is debarred by virtue of section 1 and section 5(6) of the Payment of Wages Act, 1991.
Notwithstanding the foregoing preliminary point, should the Adjudicator determine that the monies were wages properly payable under section 5(6) then it is submitted by the Respondent such monies were lawfully deducted by virtue of sections 5(1)(b) and 5(1)(c) of the 1991 Act. The Claimant has alleged that he was is entitled to unpaid wages to the value of €38,592.55. In the complaint papers the Claimant states “I had built up a sizeable €25,294.15 in commission owing due to be paid commencing 30th June 2017. If I account for June sales also completed this added a further €13,298.40 onto my commission pipeline, bringing it to €38,592.55 in commission”.
Section 5(1) of the Payment of Wages Act 1991 provides as follows (emphasis added):
“An employer shall not make a deduction from the wages of an employee (or receive any payment from an employee) unless—
(a) the deduction (or payment) is required or authorised to be made by virtue of any statute or any instrument made under statute,
(b) the deduction (or payment) 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 payment, or
(c)in the case of a deduction, the employee has given his prior consent in writing to it.”
It is submitted that the non-payment of the monies in question amounted to a lawful deduction under the Payment of Wages Act by virtue of the Section 5(1)(b) and/or Section 5(1)(c), as detailed above. Specifically, it is submitted by the Respondent that the Sales, Commission & Bonus Scheme Rules, and the aforementioned conditions contained therein, in operation within the Respondent’s business formed part of the Claimant’s contract of employment [section 5(1)(b)] and the Claimant gave his prior written consent to the deduction through signing his contract of employment and through signing his letter of offer of employment [section 5(1)(c)].
It is submitted that the Claimant’s contractual entitlements must be construed in accordance with the Sales, Commission & Bonus Scheme Rules, given the express reference to those Rules in the Claimant’s contract of employment, in accordance with the well-established principles of construction.
In this respect, the Respondent would refer to the High Court decision in Earagail Eisc Teoranta -v- Doherty & ors  IEHC 347. That case concerned a point of law appeal from the EAT to the High Court in respect of a Payment of Wages claim. In this case, employees’ terms and conditions were governed by both a contract of employment and another document, namely the employer’s company handbook. In finding that the EAT had erred in law in assessing whether or not there had been an unlawful deduction, the High Court stated as follows.
“There is a written contract of employment and a company handbook which details further terms and conditions… It is not clear how the Tribunal arrived at the determinations it did and there is not as much as a fleeting reference to vital matters such as the ‘reduction or deduction’ argument or why section 8.2 of the company handbook is not applicable… The Tribunal was also required to interpret the provisions of the contract of employment and terms and conditions as set out in the handbook… there is no engagement with the provisions of the handbook… In this regard, I am satisfied that the Tribunal erred in failing to apply well established principles of construction to the provisions of the handbook…”
The Claimant in his complaint papers seems to be asserting that the Respondent’s Sales, Commission & Bonus Scheme Rules did not form part of his terms and conditions of employment given that he states in his complaint papers that he “was furnished with a number of documents including a Sales Commission Rules which stated that upon my termination of employment or resignation, that any commission owing would no longer be paid and the company would be eligible to withhold the monies… The Sales Commission Rules were not part of the documentation that I was sent.”
In this respect it is noteworthy that the Claimant in his complaint papers states that “commission was to be paid 9 months in arrears as is the case with all BDMs”. This arrears policy “is the case with all BDMs” as all BDMs are subject to the same set of Commission Rules, including the Claimant.
The Respondent submits that the Sales, Commission & Bonus Scheme Rules did form part of the Claimant’s terms and conditions of employment, as it does all other BDMs, and this is clearly borne out from the letter of offer of employment which the Claimant signed and received and also from the contract of employment which the Claimant signed and received.
The Respondent would refer to the letter offering employment, dated 14th June 2016, which states as follows:
Under the heading “Commission Payments” that commission payments are “subject to the conditions set out in the Sales, Commission and Bonus Scheme Rules” and also that “full details of the operation of the commission scheme, including the offset of ‘bad debts and telesales appointments’, are set out in the Sales, Commission and Bonus Scheme Rules, which are issued separately, and are enclosed.”
Under the heading “Contractual Terms”, the letter goes on to specify that “this offer is also conditional upon your acceptance of our Sales, Commission & Bonus Scheme Rules as discussed at interview”.
Finally, the Claimant signed this letter of offer, thus indicating his acceptance to its terms. Notably, this document clearly states right above the Claimant’s signature as follows: “I accept this offer of employment in accordance with the provisions set out above and in the attached Sales, Commission and Bonus Scheme Rules”.
The Respondent would refer to the Claimant’s contract of employment, signed by the Claimant on 26th June 2016, which states as follows:
(a) Under the heading “Commission” that the payment of commission is “subject to the full details contained in the attached Sales, Commission and Bonus Scheme Rules”.
The Respondent submits that these Rules form part of the standard pack of documentation that a new BDM would receive as part of the Recruitment process. Accordingly it is submitted that the Claimant did receive these Rules when he commenced employment and, in this respect, it is noted that both the contract of employment and the letter of offer refer to the Sales, Commission and Bonus Scheme Rules as being either “enclosed” or “attached”.
It is again submitted that the Respondent can evidence that the 27 other BDMs hired in 2016, two of which were in ROI/NI, have signed the Commission Rules document in question. In these circumstances, the Respondent would submit that it is quite incredible of the Claimant to suggest that he wasn’t aware of Sales, Commission and Bonus Scheme Rules.
Whilst the Claimant may not have signed a copy of the Sales, Commission and Bonus Scheme Rules, he did sign a letter of offer and a contract of employment both of which clearly expressed that commission payments were subject to the Sales, Commission and Bonus Scheme Rules.
The Respondent would refer to the Curriculum Vitae submitted by the Claimant when he applied for a position with the Respondent. In this document:
The Claimant refers to himself as a “sales rep and account manager with over 9 years’ experience” with a “strong background in both field sales and account management”.
The document refers to the Claimant as having “international sales training” and “account management experience with global corporations”.
The document goes on to detail the Claimant’s extensive experience in positions such as “Field Sales Representative”, “Business Consultant”, “SalesRepresentative”,
“Corporate Account Manager”, and “Sales and Marketing Representative”. (Page 15)
It is submitted that the Claimant has clearly got significant experience in business sales, negotiating business contracts, and managing business accounts. It is therefore submitted that it is extremely unlikely that such an individual would accept a commission-based sales position without apprising himself as to the rules surrounding commission payments.
It is also submitted that such an individual would clearly be aware of the significance of signing a contract of employment and letter of offer where both documents clearly state that they are subject to the Sales, Commission and Bonus Scheme Rules.
The Respondent would again refer to the UK EAT decision in X Ltd (Name deleted) . -v- Sweeney  IRLR 49 where it was held as follows:
“There was nothing tricky about the commission rules which Mr Sweeney signed. They spelt the post-employment position out clearly and unambiguously to anyone who could be bothered to read them. It appears that Mr Sweeney did not trouble to read them as carefully as he should, but he nevertheless signed them; and by his signature he 'signified in writing' his agreement to the making of the deductions for the purposes of s.13(1)(b). The tribunal's suggestion that such a signed writing will only work for the purposes of s.13(1)(b) if the employer can also prove that, when the employee signed, he had actual knowledge of the full effect of precisely what he was signing would appear to us to add an unwarranted, and commercially unacceptable, gloss to the statutory words. The adding of such a gloss would be a recipe for uncertainty and dispute, whereas the point of s.13(1)(b) is to enable a signed consent from the employee to speak for itself and to remove the scope for such uncertainty and dispute.”
For the foregoing reasons, it is submitted that the Sales, Commission and Bonus Scheme Rules clearly formed an express part of the Claimant’s terms and conditions of employment.
Furthermore, the Respondent would submit that the Claimant cannot argue a contractual entitlement to commission based on the content of his contract of employment whilst concurrently denying that the Sales, Commission and Bonus Scheme Rules formed part of the same contract of employment despite those Rules being clearly referenced therein.
It is submitted that the Claimant in doing so is seeking to approbate and reprobate and in that respect the Respondent would refer to the following excerpt from the Labour Court in Department of Education and Skills -v- O’Loughlin (PWD1725):
“In Superwood Holdings plc v Sun Alliance & London Insurance plc  3 I.R. 303 Blayney J quoted with approval the following passage from the decision of Budd J. in Coen v Employer's Liability Assurance Corporation  I.R. 314: -
“….the repudiating party cannot be allowed to approbate and reprobate. He cannot thus be allowed to say: ‘I deny the existence of the contract which you say exists between us, but I also rely on a term of that contract ….”
A similar position was adopted by McMahon J in Manor Park Homebuilders Limited v AIG Europe (Ireland) Limited  1 ILRM 190.”
In addition, notwithstanding, the foregoing position that the Sales, Commission and Bonus Scheme Rules forms an express part of the Claimant’s terms and conditions employment, the Respondent submits that the circumstances satisfy the implied terms test set out in O'Reilly -v- The Irish Press, Ltd.  71 I.L.T.R 194 in that the policy is “so notorious, well known and acquiesced in that in the absence of agreement in writing it is to be taken as one of the terms of the contract between the parties”.
As previously stated, it is noteworthy that the Claimant in his complaint papers states that “[c]ommission was to be paid 9 months in arrears as is the case with all BDMs”. This arrears policy “is the case with all BDMs” as all BDMs are subject to the same set of Commission Rules, including the rules surrounding employees leaving the company.
The implied terms test is satisfied by virtue of the fact that these rules apply to every Business Development Manager and Executive in the Respondent’s organisation throughout Ireland and the UK. These rules are cited in every letter of offer and in every contract of employment. The Respondent can evidence signed versions of these rules by virtually every BDM in the organisation. Furthermore, the Respondent submits that this rule has been applied uniformly to every BDM who has departed the business without exception.
It is also noted that the claimant in his “factors affecting result to date” document, submitted at the disciplinary hearing on 12th June 2017, highlights that he discussed these rules with other BDMs prior to the disciplinary hearing taking place (second paragraph of page 2) highlighting the fact that they are “notorious, well known and acquiesced in”.
Indeed, these rules have been in place in Ireland since the Respondent commenced operations in this jurisdiction just over 20 years ago. Furthermore these rules have been in operation for significantly longer in the UK and the application of this rule led to a similar claim being taken by a former employee of the Respondent in the UK X (Name deleted) Ltd. -v- Sweeney  IRLR 49. That case evidences the lengthy period of time that these rules have been in operation in the Respondent company as it summarises the facts as follows:
“On 19 October 1998, the appellants' managing director wrote to Mr Sweeney offering him employment as a sales executive. The letter contained details of hours of work and basic salary. It also explained that he would be entitled to commission… The letter did not set out when the commission would be payable but stated that full details of the commission scheme were set out in a separate document. The letter made clear that the offer was conditional upon Mr Sweeney entering into the company's standard contractual terms, including the commission scheme rules…
However, section B, which was headed “Employees leaving the company”, provided that such commission was only payable if the salesman was still in the company's employment at the end of that calendar month, and that it was an express contractual term that an employee had no claim whatsoever to any commission payments that would otherwise have been generated and paid if he was not in employment at the date when they would normally have been paid. It further stipulated that: “Such non-payments of commission and bonuses are contractual terms and therefore sums not 'properly payable' under the contract and therefore are not unlawful deductions from pay in relation to s.13 of the Employment Rights Act”.”
Accordingly, in addition to the express reference to these rules in the Claimant’s terms and conditions of employment, it is entirely evident that the Sales, Commission and Bonus Scheme Rules are “so notorious, well known and acquiesced in that in the absence of agreement in writing it is to be taken as one of the terms of the contract between the parties”.
As previously stated, the Respondent’s Sales, Commission and Bonus Scheme Rules contains a section on the first page entitled “Employees Leaving the Company” which regulates this precise scenario.
The Claimant is seeking payment of “commission owing due to be paid commencing 30th June 2017”. It is submitted that the Claimant has no entitlement to same for the following reasons:
As per the Claimant’s own complaint to the WRC, the Claimant’s employment with the Respondent ended on 23rd June 2017.
As per the Sales, Commission and Bonus Scheme Rules, “Commission payments on new and renewal business are only paid if the Business Development Executive is in the employment of the company at the end of the calendar month when the commission payment would normally become payable… It is therefore an express contractual condition that an employee has no claim whatsoever on any commission payments that would otherwise have been generated and paid, if they are not in employment on the date when they would normally have been paid…”
The Sales, Commission and Bonus Scheme Rules either (a) formed an express part of the Claimant’s terms and conditions of employment, as per the Claimant’s signed letter of offer and signed contract of employment, and/or (b) formed an implied term of the Claimant’s employment for the reasons already stated.
As per Section 5(1) of the Payment of Wages Act, a deduction is lawful if “(b) it 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 payment, or (c) in the case of a deduction, the employee has given his prior consent in writing to it.”
The Respondent would again refer to Bord Gáis Energy Ltd. -v- Thomas (PWD1729), the facts of which are remarkably similar to the current proceedings, and those proceedings before the UK EAT in X (name deleted) Ltd. -v- Sweeney  IRLR 49 where the non-payment of such monies did not amount to an unlawful deduction as the monies were not wages “properly payable”.
It is submitted that the wording of section 13 of the Employment Rights Act, 1996, is strikingly similar to that contained in section 5 of the Payment of Wages Act, 1991 and that the same conclusions ought to be reached as that of the UK Employment Appeals Tribunal in X (name deleted) Ltd. -v- Sweeney  IRLR 49.
Finally, the Respondent would refer to the Claimant’s complaint papers where he refers to the non-payment of the commission monies as follows: “my commission payments would mean my family and I would be more comfortable for the future. This was taken from me and as a result has taken a huge toll on both my physical and mental wellbeing”.
Firstly, the Respondent would submit that such non-payment of these monies ought not to have had a toll on the Claimant’s wellbeing as he was aware from commencement of employment that such monies were not payable in these circumstances. However, secondly, and most importantly, the Claimant has failed to mention in his complaint that he was in receipt of a significantly higher basic salary for the duration of his employment. The Respondent would refer to those terms and conditions which specified that: “Your basic salary will be €50,000 per annum for the first 12 months. Thereafter, your basic salary will reduce to €36,000 per annum…” Accordingly, the Claimant’s basic was 38.8% higher for the first 12 months of his employment than is normally the case. The purpose of the increased salary in the first 12 months is due to the fact that:
For the first 6 months a BDM operates off a lower sales target as they familiarise themselves with the role and develop their network. This is clearly outlined in the Claimant’s letter of offer which states “You will, however, have reduced targets for the first two quarters of your employment moving up to the standard sales targets by the time you have completed two full quarters’ service”.
The Respondent operates a 9 month pipeline system in respect of commission payments. Accordingly, for the duration of his employment the Claimant was in receipt of a significantly higher basic salary (that being €14,000 per annum) to offset any impact of a 9 month commission pipeline.
What the Claimant is now seeking to claim is that he should have the benefit of both the increased salary, the purpose of which was to benefit the Claimant prior to his pipeline taking effect, and to also claim an entitlement to the commission monies that were in his pipeline as well.
According to data from the Central Statistics Office, the Average Weekly Earnings (Euro) by Private or Public Sector for Q2 of 2017 was €722.65 per week which equates to €37,577.80 per annum. If you focus only on the private sector then the average wage is €660.99 per week, or €34,371.48 per annum. The Claimant’s basic weekly pay equated to €961.53 per week which equates to €50,000 per annum which is 25% higher than the average wage throughout Ireland and 31% higher than the average wage in the private sector.
Accordingly, whilst the Claimant seeks to paint a picture that the Respondent deprived him of a large sum of commission which in turn impacted his health and his family’s financial security, he singularly fails to mention that the Respondent provided him with a substantially larger basic salary throughout his employment, that being a period where he consistently failed to perform in his sales role.
In these circumstances, it is submitted that the non-payment of commission upon termination of employment “is of an amount that is fair and reasonable having regard to all the circumstances” in accordance with section 5(2) of the 1991 Act when you consider the higher salary earned by the Claimant from commencement of employment (equivalent to €1166.66 additional basic per month, or €14,000 additional per annum, or a 38.8% increase).
For the foregoing reasons, it is submitted that the complaint under the Payment of Wages Act must fail.
The Claimant has failed to establish a prima facie case of family status discrimination in accordance with section 85A(1) of the Employment Equality Acts (as amended) and therefore the burden of proof does not switch to the Respondent.
Notwithstanding the submission that the Claimant has failed to satisfy section 85A(1) of the Employment Equality Acts, the Respondent can rebut any presumption of discrimination on the grounds of family status by virtue of the fact that comparators with the same family status and comparators without family status have been treated in the same or similar fashion.
Notwithstanding the submission that the Claimant has failed to satisfy section 85A(1) of the Employment Equality Acts, the Respondent can rebut any presumption of discrimination on the grounds of family status by virtue of the fact that:
the Claimant was being performance managed due to poor sales performance during the previous quarter, January to March, that being a quarter in which the Claimant did not take a period of paternity leave. When you factor absence due to paternity leave and reduce the Claimant’s sales target accordingly on a pro rata basis that his sales performance was still nowhere near the required levels and he would have been dismissed anyway.
Had the claimant not taken paternity leave and took an additional period of annual leave that he would have similarly been dismissed for poor performance.
The Claimant has failed to establish a prima facie case of disability discrimination in accordance with section 85A(1) of the Employment Equality Acts (as amended) and therefore the burden of proof does not switch to the Respondent.
Notwithstanding the submission that the Claimant has failed to satisfy section 85A(1) of the Employment Equality Acts, the Respondent can rebut any presumption of discrimination on the grounds of disability status by virtue of the fact that:
the Respondent addressed the Claimant’s poor performance prior to the Respondent ever becoming aware that the Claimant had a possible disability, both in March 2017 and in June 2017.
the Claimant’s poor performance is unconnected to any disability. Specifically, the Claimant had a poor sales performance, and was being performance managed due to said poor sales performance, during the previous quarter, January to March, and received a letter of concern in respect of same (13th March), that being a full month before any possible disability issues arose (16th April when he attended University Hospital Limerick).
the Claimant’s poor performance is unconnected to any disability. Specifically, the Claimant is seeking to assert that he suffered from stress and depression for two consecutive quarters but at no stage did he notify the Respondent of same and only vexatiously sought to raise same when he felt that he may be dismissed for poor performance.
Notwithstanding the submission that the Claimant has failed to satisfy section 85A(1) of the Employment Equality Acts, and the submission that the dismissal and performance issues were entirely unconnected to the disability, the Respondent submits that at all times it sought to reasonably accommodate the Claimant. This extends to offering additional support throughout employment, including the Health Questionnaire and Letter of Concern, but also the Claimant being specifically asked by Wendy Moore if the Claimant was enjoying the role and the Claimant affirming that he “really really” was and that he was supported by his manager and could pick up the phone at any time to his manager which was “brilliant”.
In light of the foregoing, the Respondent respectfully submits that the Claimant’s applications under the Employment Equality Acts must fail.
Section 41 of the Workplace Relations Act 2015 requires that I make a decision in relation to the complaint(s)/dispute(s) in accordance with the relevant redress provisions under Schedule 6 of that Act.
Section 79 of the Employment Equality Acts, 1998 – 2015 requires that I make a decision in relation to the complaint in accordance with the relevant redress provisions under section 82 of the Act.
The Complainant submitted two claim against the Respondent.
Firstly under the Employment Equality Act 1998 (CA-00013126-001) the Complainants case was that he was discriminated against on family grounds , because of his disability, that he was victimised, , that he was not given reasonable accommodation because of his disability and that the Respondent acted unlawfully by dismissing him for discriminatory reasons. With regard to the claim for discrimination the Complainant stated that he suffered from depression in or around October and November 2016 and that he was discriminated against compared to other staff who also did not hit their sales targets and that he was discriminated against because of his depression and the fact that he took paternity leave. The Complainant, despite been given adequate time at the Hearing, did not clearly set out a case for discrimination. The Adjudicator allowed further time for submission of evidence of the discrimination and the complainant submitted a further documents on July 27th and August 28th 2018 with the Respondent submitting their final submission on September 25th 2018.. The Adjudicator has taken considerable time to try identify the basis of the claim and the Respondents position is that they were not made aware of any disability by the Complainant until he knew he was well into a dismissal process and that he was not discriminated or dismissed due to his depression. In the Complainants claim he identified two members within the Respondents group as Comparators. In both cases the Comparators were not employed by the direct Respondent. Leaving aside this issue both comparators were male and had different family status to the Complainant. In one case the Comparator had achieved over twice the revenue of the Complainant and in the other he had a long history of achieving (or close to) targets and his overall continued employment was never in question due to any short term personal issues affecting his performance. In comparison the Complainant was not any where near achieving his sales target. It is stated evidence that the Complainant was given a verbal warning in May 2017 and that his own Doctor certified him “currently fit to work on full duties” on June 14th 2017 therefore on the date of dismissal the Complainants disability was not a factor. Also on June 1st 2017 the Complainant in his response to the issue of the verbal warning made no mention of his disability and stated “I hope to improve my results significantly”. There is no doubt from the evidence that the Complainant was in a disciplinary process and he was spoken to on March 10th 2017, and on April 25th 2017 (after failing to attend two disciplinary meetings) and on June 9th 2017. In the meeting dated June 12th 2017 (but may have been June 9th 2017) the Complainant stated in a written statement “ I am not disputing that I am not where I should be figure wise , however it is not down to my work ethic or capability to do the job. “ and that he already had an “already tightly wound persona” but that he had mental health issues. There was a period where the Complainant took time off for his honeymoon and paternity leave and this had to be reduced, by a limited amount, due to company policy that no more than two weeks should be taken at the one time. While the Complainant may well have had a disability within the meaning of the Act there is not sufficient evidence to show that he made the company aware of it in a meaning full manner and that it was “cloaked” in a work related stress condition for both personal and work reasons. No request for any accommodation was made by the Complainant regarding his specific disability other than, possibly, a deferment of a disciplinary hearing by a couple of weeks to allow him complete a quarter sales period. Section 85.A.1 of the Act provides that the burden of proof is on a Complainant who alleges discriminatory treatment contrary to the Act must establish the facts of this discrimination prior to the burden shifting to a Respondent. The Labour Court in Southern Health Board v Mitchell (DEE011) considered the extent of the evidential burden imposed on a Complainant by Section 85A and held that a Complainant “must establish facts which it may be presumed that the principle of equal treatment has not been applied to them. This indicates that a claimant must prove, on the balance of probabilities, the primary facts on which they rely in seeking a presumption of unlawful discrimination. It is only when these primary facts are established to the satisfaction of the Court, and they are regarded by the Court as being of sufficient significance to raise a presumption of discrimination that the onus shifts to the Respondent to prove that here is no infringement of the principle of equal treatment”. To quote from the same judgement “Is it well settled law that mere assertion cannot be elevated to the status of evidence”. Overall the Complainant has failed to establish any facts that establish that discrimination or victimisation had taken place due to family grounds or his disability or that his dismissal was the result of his disability and therefore I find the claim not well founded and it fails accordingly. (CA-00013126-001)
The Second claim was referred under the Payment of Wages Act 1991 (CA-00013126-002). The Complainants core argument in the case is that he did not receive the terms and conditions of the Commission Scheme and therefore the parties are not bound by them and that the commission payments he is claiming due are properly payable under the Payment of Wages Act 1991. The Respondent core argument is that, while they could not provide written signed evidence that the Complainant received the terms of the Commission Scheme, that under its contact of employment with the Complainant the rules regarding Commission payments on new and renewal business are “only paid if the Business Development Executive is in the employment of the company at the end of the calendar month when the commission payment would normally become payable”. Its other core argument is that the Complainant signed his contract of employment which states “I accept this offer of employment in accordance with the provisions set out above and in the attached Sales, Commission and Bonus Scheme Rules”. In order for the Complainant to succeed in his claim he must show that the monies he is claiming are “properly payable” to him. Legally, the Complainant accepted to be bound by the terms of the Bonus and Commission Scheme when he signed his contract in June 2016. The fact that he states he did not receive the plan is only partially relevant. If he had received the plan, which is in dispute, he would be bound by the term that states he would not be entitled to commission unless he was in employment at the end of the calendar month which it became due. Therefore, either way whether he did or did not receive the Sales Commission Plan, the Complainant was not entitled to the commission by virtue of the contractual terms. The terms of the scheme state that commissions due cease on the date the employment ends. Even if the Complainant did not receive the Sales Commission Scheme details with his contract due to a Company administrative error, which he alleged is the case, he signed that he did receive them and therefore the onus was on him and not the Company to follow up with the Company to get a copy of such a key document. It is not logical that such an important income document to the Complainant was not requested or asked for, if it was absent from the new hire pack of documents, by a Sales Manager with the Complainants experience. The Claim under the Payment of Wages Act 1991 is therefore not well founded as the monies sought were not properly payable to the Complainant as per Section 5.1. (b) 1” the deduction (or payment) 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 payment, or of the Act” and the claim fails accordingly.
Dated: 22 November 2018
Workplace Relations Commission Adjudication Officer: Peter O'Brien