How much commission was payable when some of the employee’s billed work was performed by third parties? | The Indicator Podcast

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In this case, an employee brought an unlawful deduction from wages claim against his employer in relation to commission payments. The employee was paid commission on billing over a set amount and argued that the amount was payable on his total billing, not only on the portion of any bills relating to work he had personally carried out. Listen along to find out what happened!

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Transcription

Speaker #0
Today, in the Lefebvre HR and Employment Law podcast, we're discussing the judgment in the case of Raymond Saul and Company LLP and Rashbrook, in which the Employment Appeal Tribunal was asked to consider an unlawful deduction from wages claim brought in relation to unpaid commission payments. In this case, a junior solicitor worked for a solicitor's firm and his remuneration was split into basic pay and commission. In addition to his basic salary, if the solicitor invoiced and recovered payment from clients in excess of three times his salary, he would also receive 20% commission on that excess. A dispute arose between the parties about the amount of commission due under the contract, and the solicitor succeeded in a claim for unlawful deduction of wages, with the tribunal finding that there was no term in the solicitor's contract permitting the employer to apportion profit costs billed to and paid by clients to its other lawyers for the purposes of calculating the solicitor's commission. The Employment Tribunal awarded the solicitor almost £8,000 in unpaid commission and the employer appealed to the Employment Appeal Tribunal. The key issue before the Employment Appeal Tribunal was the construction of the commission provisions of the solicitor's contract. The Employment Appeal Tribunal held that the Tribunal had erred in interpreting the contract terms because it had overlooked the express words of the contract that meant commission was only payable on amounts in respect of the work carried out by the employee whilst acting as a solicitor to the company. The correct interpretation of this term was that commission was only payable on work the solicitor himself performed. It was not payable in relation to any work carried out by third parties on client files opened and later invoiced in the solicitor's name. Further, the Employment Appeal Tribunal found that the tribunal's finding that there was no evidence of the employer keeping the necessary records for fee apportionment between its lawyers was incorrect considering the employer's evidence about its time recording records, which detailed and recorded the time of other solicitors and trainees who had worked on the solicitor's files, for example, which recorded the work of senior lawyers supervising his work and trainee solicitors undertaking tasks on those files. Based on the correct interpretation of the contractual terms, there was only one correct answer on the facts open to a reasonable tribunal and the Employment Appeal Tribunal overturned the tribunal's decision and dismissed the solicitor's claim. This case is a reminder that many disputes of this nature can be averted by clear contractual drafting. Had the contract terms expressly made it clear that the invoices on client files would be fairly and proportionately apportioned between all of the lawyers who had worked on a particular file, this dispute would almost certainly have been avoided entirely because the solicitor would have been clear about how his commission was due to be calculated. Look out for further episodes in this series to stay up to date on all things HR and employment law related.

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Visit www.lefebvre-uk.co.uk to explore our product range, or connect with us on social media:

Hosted on Ausha. See ausha.co/privacy-policy for more information.

Transcription

Speaker #0
Today, in the Lefebvre HR and Employment Law podcast, we're discussing the judgment in the case of Raymond Saul and Company LLP and Rashbrook, in which the Employment Appeal Tribunal was asked to consider an unlawful deduction from wages claim brought in relation to unpaid commission payments. In this case, a junior solicitor worked for a solicitor's firm and his remuneration was split into basic pay and commission. In addition to his basic salary, if the solicitor invoiced and recovered payment from clients in excess of three times his salary, he would also receive 20% commission on that excess. A dispute arose between the parties about the amount of commission due under the contract, and the solicitor succeeded in a claim for unlawful deduction of wages, with the tribunal finding that there was no term in the solicitor's contract permitting the employer to apportion profit costs billed to and paid by clients to its other lawyers for the purposes of calculating the solicitor's commission. The Employment Tribunal awarded the solicitor almost £8,000 in unpaid commission and the employer appealed to the Employment Appeal Tribunal. The key issue before the Employment Appeal Tribunal was the construction of the commission provisions of the solicitor's contract. The Employment Appeal Tribunal held that the Tribunal had erred in interpreting the contract terms because it had overlooked the express words of the contract that meant commission was only payable on amounts in respect of the work carried out by the employee whilst acting as a solicitor to the company. The correct interpretation of this term was that commission was only payable on work the solicitor himself performed. It was not payable in relation to any work carried out by third parties on client files opened and later invoiced in the solicitor's name. Further, the Employment Appeal Tribunal found that the tribunal's finding that there was no evidence of the employer keeping the necessary records for fee apportionment between its lawyers was incorrect considering the employer's evidence about its time recording records, which detailed and recorded the time of other solicitors and trainees who had worked on the solicitor's files, for example, which recorded the work of senior lawyers supervising his work and trainee solicitors undertaking tasks on those files. Based on the correct interpretation of the contractual terms, there was only one correct answer on the facts open to a reasonable tribunal and the Employment Appeal Tribunal overturned the tribunal's decision and dismissed the solicitor's claim. This case is a reminder that many disputes of this nature can be averted by clear contractual drafting. Had the contract terms expressly made it clear that the invoices on client files would be fairly and proportionately apportioned between all of the lawyers who had worked on a particular file, this dispute would almost certainly have been avoided entirely because the solicitor would have been clear about how his commission was due to be calculated. Look out for further episodes in this series to stay up to date on all things HR and employment law related.

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