Mr Mark Taylor v Redcentric Solutions Limited — 2023

Mr Taylor was employed as Sales Director from 23 August 2022. His offer letter and contract provided for commission of £90,000 on target and a six-month probationary period, with the contract stating that performance would be reviewed after six months and that, upon successful completion of probation, employment would be confirmed as permanent. The respondent later circulated a commission plan in October 2022 covering the period 1 September 2022 to 31 March 2023. The tribunal found that the plan provided for commission calculated by reference to team performance against TCCM targets, with limited express grounds for withholding payment, including where the salesperson was under a sales improvement plan, under disciplinary sanction, or serving notice.

The tribunal accepted that no commission was paid in the February, March and April 2023 payroll runs. It found that February had been withheld because the respondent had identified possible overpayments under a revised calculation method, while March and April were withheld because of the claimant’s sickness absence. It rejected the respondent’s reliance on the claimant’s individual performance as a basis for withholding commission, because that factor was not an express term of the plan for managerial sales staff and the claimant had not been placed on a sales improvement plan or subject to disciplinary sanction. The tribunal also found that the commission scheme did not contain terms permitting non-payment because of sickness absence.

Applying section 13 ERA 1996, the tribunal held that the commission for February, March and April 2023 was properly payable and that the respondent’s decision to withhold it was outside the terms of the plan. It held that, even if the respondent relied on discretion, that discretion could not be exercised by taking account of irrelevant factors such as sickness absence or individual performance in the circumstances found. The tribunal therefore upheld the unauthorised deduction from wages complaint, but directed that the amount due would be determined at a separate remedy hearing.

On wrongful dismissal, the tribunal construed the probation and notice clauses together and held that the phrase "successful completion of your probationary period" meant more than simply the passage of six months. In the tribunal’s view, the contract contemplated a formal review after six months and a positive step confirming permanent employment. Because that had not happened by 28 April 2023, the claimant remained in his probationary period and was only entitled to one week’s notice. The wrongful dismissal claim for additional notice pay was therefore dismissed.