Redundancy and Sales Commission

[prettybird]

My company was recently taken over by a much larger company. I (and the entire sales team) have just been put under 90 days consultation of redundancy. This would take me up until beginning of February (if our Employee Forum don't accept a shortened consultation period as the rest of the company has already been under consultation for 30 days and they seem to want to accelrate the porcess so that "we kow before Christmans" ).

My questaion is about commission payments due. I am paid on BILLED revenue and I have a mssive deal due to invoice mid Febarary, ie once we have finsihed the commisioning process which is currently underway.

Our financial year (and therefore my targets) are April to March. Without this deal I am way unnder target - with this deal, I am waaaay over. It is worth a lot of money (so much that in fact it will be capped under the "single deal" limit).

Can they change the commision scheme at the end of December and effectively remove my opportunity to receive that commission? I am prepared to challenge it if they do.

Our staff representative seems to think that they can do this as the commission scheme states that "if you leave by reason of dismissal" then yuo get paid according to what you have invoiced to date, but have to carry the entire year's target.

My argument would be that redundancy is not the same as dismissal.

If I am lucky enough to get one of the jobs transferring inot the parent company (my whole section is being transferred- but we know there aren't enough positions), again: can I epxect to get the commission due to me or do I have to accpet transferring onto thier commission scheme - givent hat they also have the same financial year and it would be really difficult to set up targets for less than three months of the financial year and that anything due in that time frame would already have to be in the system.

SO in theory, they could really abuse the process by giving me a "new" target, based on thier commission schem which I am going to meet precisely - and not give me the chance to get the commission for the overpeferomance that I am currently expecting.

Bump.

I know it was a long and complicated OP but essentially I woant to find out if:

a) "redundancy" is the same as "dismissal"

and b) if they can change the scheme over 3/4 of the way through the year in a way that emans that they don't need to pay me that bonus that they know is coming.

It's a reasonable amount of money (not a city type bonus though!) - and as my dh is 49 and has been out of the job market for about 6 years and I am 47 and there anrent' many jobs in my sector up in Scoltand, iot would be a reaonable enough sum to act as a cusion while we try to work out what to do next, if the worst came to the worst and I were made redundant

I'm assuming this is urgent from the bump. Apologies but I'm not going to have time to look at it until later this afternoon. Hopefully someone else is about who might know.

Flowery will be back soon with much better answer but in meantime:-

A) Redundancy IS a 'type' of dismissal, but IMO a tribunal would rule that the reasonable assumption is that the term dismissal is used in this instance to refer to a dismissal for reasons relating to inability to perform and the like, so there would be enough greyness here to argue that you should be entitled to commission anyway.

B) Because company has been taken over your current contract and rights are protected by TUPE law, so - although they will have to harmonise the various policies eventually - your employers cannot impose new terms that place you in a worse position than your old terms -your contract must continue as it was.

C) Because it is a TUPE situation they have to work much harder to 'justify' the redundancies - they will probably be relying on what they call 'economic' reasons. Which is OK but means I think (Flowery will confirm) they need to tread v carefully which strengthens your position

D) They CAN reduce the consultation period (not good form though) but if they do so they need to add on the reduction to the notice period (ie if they call consultation short after 70 days you are entitled to extra 20 days pay on top of normal notice period)

So, I'm not a practicing lawyer but I reckon that you have a fairly strong case. I reckon you should just talk to your firm as if you simply assume that they are going to pay you this and then challenge if they say otherwise - you may be surprised and find that they intend to pay you this anyway if you are selected..

Is your commission scheme clear that commission is only due when deals are invoiced? Sounds as though it is. I'm not clear why - should you be made redundant effective beginning of February - they would need to change the commission scheme in order not to pay you commission which won't be owed to you until mid February. Perhaps I am not understanding correctly, but it sounds as though the scheme already provides that if you are not in employment when a deal is invoiced, you are not due that commission.

In terms of whether redundancy is the same as dismissal, redundancy would be the reason for your dismissal, so yes it is a form of dismissal, although I agree with squiffy that you could argue that the intention of that particular clause in the scheme is to highlight dismissals for behaviour/other similar negative reasons rather than redundancy. But that clause doesn't make sense either anyway. Does that mean that if you leave employment by reason of your own resignation as opposed to being dismissed you will receive commission payments for deals you have worked on but don't invoice until after you have left? Surely not?

Apologies if I am not understanding correctly, perhaps you need to explain further, but at the moment I can't see how, should they want to deny you commission for a deal invoiced after you leave employment, they would have to change anything to do so.

It's not THAT urgent - I was wanting to get my own thinking clearer prior to going to an "employee consultation" meeting - to know waht questions to ask.

My concner is that they are trying to bounce us into making decisions within just over a month of the time that we in Sales came into consultation - and only two months since the rest of the company started.

They want us to have interviews with our mananger w/c 1 december, be told whether we have been job matched (or are in the intgration team or not) w/c 8 december and then, if you are going and/or on the integration tema (ie extended notcie of rednundancy - not an option for my function), to have signed the compromise agreement w/c 15 December.

I'll print off my Commission scheme and try to answer some of Flowery's specific questions.

We've been told that TUPE doesn't apply becaseu the "old" company still exists and is/will be a wholly owned subsidiary of the company that took us over. So, for those people (approx a third) that stay in roles in the "old" compnay, they stay on the same Ts &Cs.

But a third of the company is transferring to the parent company (and it has already been stated that my bit of Sales is transferring - at the moment we just don't know how many of us will have jobs), it's not clear what that means for our Ts &Cs - and for those of us in Sales, our commission paymnets.

If I am lucky enough to be job matched or whatever, I would have left the "old" company - but I would actually have left. And if I am made redundnat, do I not accpet the 3 months "Pay in Lieu of Notice", to make sure that I am stil in post when the big job is completed and therefore invoiced? (I'll be manually invoicing it just to make sure! - there are actually justified reasons for doing so, not least of which it is such a large amount of money, the company doesn't want to wait for the enxt bill run for it to go out!)

If you stay in employment, either with the parent company or the old company, your t&cs will still apply, and can't be changed without your consent. So they can't just change the commission scheme. I don't think whether TUPE technically applies matters much. TUPE is to protect your terms and conditions should your employment be transferred to a different company, so if it does apply, your t&cs are protected. If it doesn't apply, that means you are still employed by the same company, and they can't just change your t&cs either. So either way, nobody can make changes without them being agreed.

If you are redundant, then yes your best bet is to make sure you are still around to invoice that deal.

Put pressure on the employee forum not to agree to a shortened consultation period. They are supposed to be representing your views and those of your colleagues, so it's fine to make sure those views are heard and taken into account.

I agree with Flowery. I am afraid that this doesn't sound to me like a question of changing terms (or TUPE being particularly relevant to this part of the question). Either you will be in employment on the relevant date under the scheme or you won't.

"If you leave by reason of dismissal" is odd wording. You say that the representative thinks this is the reason they can do this. I presume you have actually looked at the wording yourself and checked that this is exactly what it says? I am afraid that, on balance, I think a tribunal would say that, as redundancy is a type of dismissal, you are not entitled to argue that that rule of the scheme does not apply.

Finally, you cannot 'refuse' a payment in lieu of notice as such.If there is a clause entitling the company to choose whether to pay in lieu, they can do so. Whether that payment includes commission that would have accrued during that time is based on the exact wording of the clause - let us know what your contract says. If there is no clause, you still cannot refuse the PILON, but it might be part of your contractual damages if not included. This gets very complicated, so I would see a solicitor.

Finally, your reps are there to negotiate stuff for you. Why aren't they going in and saying things like "We might agree certain consultation, but we have concerns that some people might just miss out on commission payment and part of our agreeing to shortened commission would be you guaranteeing those people would be protected" or some such..

Sorry, we might agree to shortened

The relevant clause is "If at any point a Participant should no longer be entitled to participate in the ?Billed Plan? whether this is by resignation from [the company], dismissal or moving internally outwith Sales, payment of any Billed Plan Commission to them is normally calculated with reference to all Individual Billed Revenue and Billed Team Revenue up until the end of the month before the Participant leaves the Scheme. "

The PILON is a strange one - the custom and practice in our company has been to leave immediately and get PILON (but not necessarily the case in the team I work for) - but the custom in the new parent company has been to make people work thier notice. In my case, that would be 3 months. The employee representatives have agreed a compromise whereby those that leave before April get PILON, those that leave after April must work thier notice.

The reps have asked before about sales commission but got told that as we weren't under consultation, it wasn't an issue. But now we are under consultation, so we need an answer......

I have formally asked the question about commissions due for services that will be delivered in Jan/Feb/Mar next year and we'll see what the response is.

The irony is that unusally for a sales person, I am not normally motivated by money (drives my big boss mad as he doesn't understand it) but in these uncertain times, the £70k would keep us going a loooong time. And I worked bloody hard to close the deal back in July and have been thorugh hell and high water over the past four weeks to keep it alive - not for me monetarily, but for my professional integrity and the benefit of the company and my customer (complicated reasons to do with the current global financial situation)

Ah, that deals with Flowery's point about resignation. I think that, when you read the whole clause, it is designed to cover any termination. It specifically says resignation (you terminate) and dismissal (they terminate). If it did not apply on redundancy, etc, I would expect there to be a carve out.

On the PILON point, I take your point about the practice in the company, but what do your actual contracts say? Do they specifically give the company the option to make a PILON? That is quite important to your position about including lost commission in your payment in lieu.

Get your reps back on the case ASAP. Hound them till they deal with it.

£70k is your commission? If there's that much at stake, my strong advice would be to spend the money and spend an hour or two with an employment lawyer to get this clear. Especially on the contractual stuff I have mentioned. It will be worth the investment!

Yes - £70k is the commission I wil be due on this one deal (in fact, in practice probably more than that, as without out I "underpferom" to such an extent that even my normal bonus wouldn't get paid). It was a biiiig dela those I closed - that not only means that we invoice a huge amoutn to the customer, but on the back of it, my company also gets benefit beyond the value of this particualr deal (can't really be specific without giving away details)

So yes, I will be getting formal legal advice for something worth this much! ... and not just using the "independent legal advice" that the parent company is paying for to advise us on the compromise agreements they expect us to sign in order to get the enhanced redundancy terms on offer (2 weeks for every year - but as 8 of my 11 years are at 1.5 weeks already as I will 48 at "finish date", it doesn't give me that much benefit).

There are to be no voluntary rednundancies - although the latest is that we "can express a preference".

The problem is we just don't have the infomration on which to make decisions

Prettybird - the independent legal advice WILL be truly indpendent. The solicitor has, by law, to sign a certificate to say that they are giving independent advice and would be struck off for not doing so.

However, I agree that that type of advice can be a bit of a production line and, if there is a small budget per person, you might well be told that they can't get into it within the budget and you would need to pay extra. I agree you might want to find someone separate and sooner.

Also, on the redundancy, a week's pay under statutory redundancy is capped at £330 per week. Not sure how much you earn, but given the commission you just referenced, I am guessing more than that. If the company is taking off the cap as well as changing the multiplier (i.e. you get 11 x full pay, not 8 x £495 plus 3 x £330), you may be getting more benefit there than you realise.

Thanks Ribena. I'll double check my contract: I beleive it is basically the statutory week per year and week and a half over forty - but without the statutory cap.

I know that the company selected is reputable (two companies pitched - both "known" names) and that they do need to give independent advice. But as they are only allocating 30 or 45 minutes (there seemed to be confusion at yesterdays staff meeting) per person, there isn't really that much time beyond telling yuo what rights you are signing away.

We've just been told by our Manager that next week the managers will be briefed on the selection process, the week after (w/c 1 december)we will have 1:1s with our senior manager ( 'cos he is a bully and we don't respect him) and the week after that (w/c 8 december) we will have individual certainty on what our future is (ie whether we have a job). The week after that, we get to see the lawyers.

The good news is that I have now started the process of formally getting legal advice.

The bad news is that my friend (a property lawyer, so no help herslef) works for a practice that already does work for the parent company - and her first thoughts for recommnedations work for the practice that does work for my own company. She is going to ask around the office today to see if her collegaues can recommend someone in a practice where there is not a conflict of interest.

My bonus isn't normally anywhere near that size - this was a "once in a lifetime" deal that I worked bloody hard for.

I am probably going to be made redundant at the beginning of December; we are currently in a 90 day consultation period and am currently on maternity leave. The info coming through from our HR department is very sparce & i am due to try and meet up with them next week.
If I don't take my redundancy in Dec but wait til my maternity leave finishes next June assuming there is still no suitable role for me to go back to will I still be intitled to my maternity pay or would I miss out? If I wait in theory I will benefit from being paid 5 bank holidays and would build up more of my own annual holiday - so this is worth a few hundred pounds to me and worth considering if I can actually do that.

Any info would be great, many thanks BecsP

I don't know about your answers re redundancy pay and holiday pay, but flowerybeanbag has said before that, contrary to normal expectations, if you are on manternity leave, it is the one time that there is BY LAW positive discrimination, in that if there is a suitable altrnative role that they can "place" you into, then they have to do so - and you do not have to compete withothers for that role.