“The rules were changed retrospectively to avoid paying me the sales commission I’d earned.” Which case won?
Employee earns sales commission under employer’s sales program
Between May 2005 and November 2013, the employee was employed as a sales representative selling large scale printing solutions to corporate and government clients.
Her employment contract stipulated that she would be paid a base salary and could also earn commissions through the employer’s sales program.
During a six-month period between 1 November 2009 and 30 April 2010 (the “measure period”), the employee exceeded her sales quotas to such an extent that for that period she was 500% over budget.
As a result of this achievement, she calculated that for the measure period, she was entitled to $446,250.39 in commission.
Employer reviews employee’s sale plan, capping commission payable
The employer’s sales program provided that when a salesperson reached an identified performance threshold, a management review would occur. As a result of the review, management could adjust various components of the employee’s sales plan.
The employee had reached this performance threshold and so her sales plan was subject to review.
In May 2010, the employer conducted the review and placed a cap on the employee’s commission payment. This was done retrospectively, after the measure period.
Consequently, the employer paid the employee just $136,500 of the $446,250.39 commission to which she had calculated she was entitled.
Employee successfully sues employer for full payment and employer appeals
Three years after leaving her employment, the employee commenced a claim against the employer in the ACT Supreme Court for $309,750.39, the amount by which she claimed to have been underpaid, plus interest.
The employee’s claim was successful, and the employer appealed to the Supreme Court’s Court of Appeal.