# Legal Position on Commission and/or Bonus Payments - is it Officially part of "Pay"



## Keltic (30 Mar 2011)

Hi,

I am finding it difficult to determine whether or not the commission and Bonus payments in my contract of employment can/are considered as "pay" under Irish employment law - specifically for the purpose of defending them from unauthorised deductions by my employer and/or downward renegotiation.

Background is that I have been successful in achieving and exceeding my sales targets since joining my current employer in June '08. recently my line manager was changed and he is trying to "renegotiate" my "compensation package". Recently he deducted company incurred shipping costs (without proof of costs) from my sales figures to ensure a reduced payment on my commission (loss of E700). When I disagreed, he said that it was their right to amend the conditions of payment of commission without requiring my agreement. As this cost had heretofore been included in the sale price, I was not given the opportunity to pass it on in the sale. I suggested that if it was now to be deducted, that I would add it onto the cost of the product to my distributor network, whereupon he insisted that the pricing structure was set by the company, not me.....?

Definitive help on this would be beneficial before I go running to the Rights Commissioner or demanding payment under the Payment of Wages Acts etc.


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## Purple (30 Mar 2011)

He needs to provide proof that he can change the conditions of payment of your commission. You don't have to prove he can't.


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## ajapale (30 Mar 2011)

Hi Keltic,

Welcome to AAM.

Are you in a trade union? Are trade unions organised in your industry?

What does your contract of employment say about commission? bonus payments?

aj


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## Keltic (30 Mar 2011)

*Purple* - can you define what you consider to be "Proof of ability to change conditions of commission"?
Personally, I see the only way to defend this is by proving that Commission _is_ part of "pay" under a definition that could be taken to a commission or court. Either by specific reference, inference in legislation OR by law of the land approach.

*ajaple* - As a professional, I have never been in a union. Honestly speaking, I have never had the desire to become part of a union movement, preferring to use my own ability to stand up and speak for myself than allowing someone else to do it for me.

My contract of employment states that commission is separate to pay, however I would seek to discover/prove that commission is not separable from pay, legally. 

Under Irish Legislation about holiday pay, commission is referred to in the same context as overtime, requiring holiday pay to be based on the variable amount from the prior 13-weeks. However, it is difficult to find a direct reference elsewhere that confirms fully that "performance related pay" can be considered part of salary entitlement and not just an arbitrary additional amount which is removable at the whim of the employer (assuming conditions for reward have been met - in the interest of fairness).

I believe I have some ground to stand on as, in the initial period of employment (first 6-months), I was given an additional sum to supplement my "basic" pay which was the equivalent of achieving the proposed sales target each and every month of that period. Also, I have been paid a commission on sales until this recent "deduction" and request that we "review" my "compensation package" in light of additional duties that I am undertaking.

However all inferences by him is that the commission structure would be reviewed (downward) and the Salary "package" adjusted (no indication on the likely movement on this - though no increase or review has yet taken place in 3-years of employment).


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## Art (31 Mar 2011)

The Rights Commissioner will take a holistic view of it. If for example you received on average 20k in commission over the last three years and this was stopped or reduced in the current year despite similar sales figures being made, the average of 20k would be assumed to be part of your terms and conditions and he would find in your favour. You should get a claim in quickly as you can only make a claim within six months of the deduction being made.


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