You have legal rights if your employers do not honour their obligations to make contractual payments of salary, commissions, or bonuses.
Failures to pay salary or other employment contract entitlements will amount to breach of contract. We advise parties who have had their pay “stopped” or who have unexpectedly received shortfalls in the commissions or bonuses.
Failure to make payment is almost certainly a potential fundamental breach of contract. This is important because a fundamental breach of contract will generally give an innocent party the right to terminate the contract. In the employer/employee relationship this can mean, if the employee has been working for the employer for more than 2 years, the possibility to resign and claim constructive dismissal. An employee does not have to resign or terminate the contract to start a breach of contract claim.
FAILURES TO PAY THESE SUMS CAN OFTEN AMOUNT TO BREACHES OF CONTRACT
Wages are protected (in usual contexts the term “wages” can include commissions) in the Employment Rights Act and employers can only withhold wages in very limited circumstances.
Bonus and commission payment entitlements can be more legally complex. This is especially the case with bonuses, where the terms of the contract and the previous policy of the employer can be key. This is because many employment contracts have clauses that state that bonus entitlements are discretionary, both in terms of legal rights to receive any bonus and the amount. With disputes over bonuses, whilst the entitlement might be discretionary, if, in practice, the employee has always received a bonus and there has been a mechanism for assessing entitlement to a bonus, the employer may struggle to justify a very different approach for the current year or period. Sometimes, a dispute over a bonus may involve discrimination claims such as where men get bigger bonuses than women or based on race or age.
If you need specialist employment law advice on a bonus or commission dispute please contact our team.
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