An Employer v A Worker

CourtLabour Court (Ireland)
Judgment Date31 July 2019
Judgment citation (vLex)[2019] 7 JIEC 3101
Date31 July 2019
Docket NumberADJ-00010061 CA-00013126-001,FULL RECOMMENDATION,DETERMINATION NO.PWD1921

Labour Court




ADJ-00010061 CA-00013126-001

An Employer
A Worker

Chairman: Mr Geraghty

Employer Member: Ms Doyle

Worker Member: Mr McCarthy



1. An Appeal Of an Adjudication Officer’s Decision No(s). ADJ-00010061 & CA-00013126-001


2. Background


This is an appeal by the Worker, ‘the Complainant’, against a decision by an Adjudication Officer, (AO) of the Workplace Relations Commission, (WRC) that the Company, ‘the Respondent’ had not made an unlawful deduction from his earnings, contrary to s. 5 of the Payment of Wages Act 1991, ‘the Act’.


The Complainant was employed from 8 August 2016 by the Respondent as a Business Development Manager, (BDM). The Complainant was notified of his dismissal on 16 June 2017. He appealed this decision and his appeal was heard on 26 June 2017. He was notified that his appeal was unsuccessful on 4 July 2017.


The Complainant was advised that commission payments earned by him, that he claimed to amount to €38,592.55, were not payable as it was provided in his contract that he would have to be serving in the employment on the date that they were due to be paid and, as he had been dismissed, he was not serving on that date.


The Complainant then brought a claim to the WRC under the Act. His claim was rejected by the AO.


He appealed to the Court.


In view of the nature of a disability claimed by the Complainant, the Court agreed to anonymise the names of the parties to these proceedings, in accordance with the Court powers under s. 44(7) of the Workplace Relations Act 2015.


A preliminary issue as to whether the appeal was received in time was dealt with in Determination No. EDA 1913, in which the Court accepted that the appeal should be heard.

Complainant’s Arguments

The Respondent argued that the Complainant was not entitled to be paid commission earned as it was a condition of the Respondent’s rules on commission that the Complainant be in the employment on the date that the commission was due to be paid. However, these rules were set out in a document called ‘Sales Commission and Bonus Scheme’, which was never given to the Complainant. These rules were not in the offer letter of employment, they were not set out in the main terms of the contract and they were not in the employee handbook.


The onus is on an employer to ensure that any such document is brought to the attention of an employee. The Respondent can show no proof that this document was received by the Complainant.


In Noreside Construction Limited v. Irish Asphalt Limited, (2014), the Supreme Court held that, ‘It is difficult to see how one could be bound by terms and conditions which are not contained in a signed contractual document…’ and in James Elliott Construction Limited v. Irish Asphalt Limited (2014), it was stated that ‘..the party, to be bound, must know what the terms and conditions are…’


The Complainant’s contract states that these terms were attached to the contract but, in fact, they were not.


The date on which the commission became payable in accordance with the Respondent’s rules was the last day of June 2017. The Complainant was notified on 4 July 2017 that his appeal was unsuccessful. In UPC Communications Ireland Ltd v Employment Appeals Tribunal, the High Court held that the effective date of dismissal was after a decision to dismiss is upheld on appeal.


The Complainant had generated €545,000 in sales for the Respondent. He earned his commission and was entitled to be paid.

Respondent’s Arguments

In March 2017, the Complainant received a letter of concern from the Respondent regarding his performance, in which he was advised that if he did not show a significant improvement then he could be liable for further action.


On 21 April 2017, the Respondent became aware that the Complainant had failed to attend two meetings arranged with potential clients. When this breach in procedure was discussed with him, the Complainant contacted his manager, Mr. K, to advise that he had ‘pains in his chest’. The Complainant received a verbal warning, which he did not appeal.


On 9 June 2017 the Complainant was invited to a disciplinary hearing because of his sales performance, having signed deals that represented 43% of his target.


Subsequent to this meeting, the Respondent received a medical certificate for the Complainant, which stated that he was suffering from ‘work related stress’ but went on to state that he was ‘currently fit to work on full duties’.


The Respondent notified the Complainant on 16 June 2017 of the decision to dismiss him and of his right to appeal. This appeal upheld the dismissal decision and the Complainant was notified on 4 July 2017.


There was no deduction from the wages of the Complainant contrary to s.5 of the Act as the money claimed was not ‘properly payable’ to him because they were not ‘payable under his contract of employment or otherwise’ as defined in s.1 of the Act. The Complainant’s contract states explicitly that the contract is ‘subject to the full details contained in the attached ‘Sales Commission and Bonus Scheme Rules’. The rules state that ‘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..’


The rules go on to provide 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’ and they provide also that ‘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 s. 5(6) of the Payment of Wages Act 1991’.


The rules provide for commission to become payable once 15% of the contractual fee has been received from clients with 5 year contracts and when 25% of the contractual fee has been received from clients with contracts of less than 5 years’ duration. Only some of the contracts signed by the Complainant had met these requirements, in any event.


The case of Bord Gais Energy v Thomas (PWD1729), involved a similar requirement that...

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