Claimant v Kielty v Elephant’s Don’t Forget Ltd — 2021

The claimant was employed from 9 October 2017 until 24 October 2018 and brought a narrow claim under section 13 of the Employment Rights Act 1996 for non-payment of a contractual bonus/commission said to be due under his written contract. The contract provided that commissions were payable at the company’s sole discretion, but Schedule 1 also set out the commission scheme, including 20% of licence fee income and set-up fee income up to a sales target of £100,000, and 10% above that target. The tribunal found that the claimant had secured three deals, described as Irish Life, Al Ryan and Welsh Development Bank, and that there was no dispute over the calculation of the amount claimed.

The respondent argued that the claimant had not done enough to assist with implementation and that it was entitled to withhold payment because the deals were not “good” deals and because of poor performance. The tribunal found there was no real cogent evidence of poor performance beyond the oral evidence of Mr Harvey and Mr Gray. It found that no written note had been handed to the claimant at the 24 September 2020 meeting as alleged, and preferred the claimant’s account that the note had not been given to him. Applying the discretion clause, the tribunal held that the respondent’s purported exercise of discretion under clause 7.4 was perverse and that no reasonable employer would have refused to make the payment in those circumstances.

The respondent’s alternative reliance on Schedule 1 paragraph 2 also failed. The tribunal held that the claimant was not serving notice of termination when the bonus became payable; he had been dismissed and remained employed until his last day on 24 October 2018. The tribunal therefore held that he was employed in accordance with the contract at the time payment fell due. It concluded that the failure to pay the bonus amounted to an unlawful deduction of wages and declared that the claimant was entitled to the sum claimed.

The tribunal awarded the claimant £8,760 gross without deductions. It also considered, but declined to make, a financial penalty under section 12A of the Employment Tribunals Act 1996. In that context it said the dismissal and 24 September meeting were fabricated or trumped up to avoid payment, but concluded that the threshold for a penalty had not quite been crossed, taking into account the size of the business and its lack of HR resources.