I have a "clause" in my contract that says I earn a salary based on GP. How legal is that?The reason I am asking is because the company has not been able to pay our creditors so we have not been able to buy and sell products. Now I am not receiving a salary as the branch has not made any GP.
Welcome, thank you for the opportunity to address your question.I need a bit more information in order to provide you with a comprehensive answer:
I am a Branch manager - but I am also the only person working in this branch. The sales team was supposed to be the sales people at our other 3 branches
You will receive a basic salary of R 26 500-00 per month. (pro rata branch earnings minimum 140K GP). This basic amount will be increased at the following target points;
I have received a salary over past few months as follows:
Tricky one, I need a bit more information, please bear with me:
The company itself sells to the mining industry.
The clause was in my original contract, but at that stage I was earning only R7500 per month - but I received this salary even though we did not make GP.
The employer aims to limit any turnover risk due to fixed salary costs, but in a way as to initially create the false impression that there would be a basic or minimum salary. If the contractual terms are sufficiently clear and are in terms of the Basic Conditions of Employment Act and Labour Relations Act, then there is a good possibility that such terms would be upheld by the CCMA or Labour Court.
Your task would be to show why such terms are either not valid or unenforcible in terms of statutory and common law considerations and the following arguments are available to you:
The terms of the contract state a "basic salary" the general meaning of which is a base level or minimum salary level and this meaning was relied upon in agreement of the contract terms. Reliance can be made on the previous behavior of the employer where such stated "basic salary" or minimum salary level was paid irrespective of whether turnover was below any budgeted target. Furthermore the terms " (pro rata branch earnings minimum 140K GP)" are very vague and do not adequately convey that the employer intended to make deductions against the basic salary. It may be argued that in context, the terms are too vague and misleading to support deductions against the employees salary and hence not enforcible. The phrase "This basic amount will be increased at the following target points" creates the impression that remuneration will move up from the basic amount on a pro-rata basis, it does not clearly specify that the remuneration will decrease below the basic level.
Basic Conditions of Employment Act.
It can be argued that the variation of remuneration and the basis of remuneration calculations and any deductions based on turnover are not clearly stated in terms of the Section 29 requirements of the BCEA.
It also can be argued that there is no express agreement as to deductions based on gross profit being permitted against the basic salary and consequently the employer has violated section 34 (1) of the BCEA.
Labour Relations Act
The unfair terms being applied by the employer to the employee, coupled with the unilateral reductions in benefits, could give rise to a claim based on an unfair labour practice in terms of section 186 of the LRA.
What to do:
As all actions above are in pursuit of your rights under the LRA and BCEA, the employer may not in any manner take any action against you just because you sought to exercise your rights. It also means that any subsequent action of your employer would have to pass scrutiny that it is not a reprisal against you for taking action.
It could prove to be a substantial claim and there would be some legal intricacies and therefore it would be prudent to get the assistance of a labour lawyer to assist you.
I trust that the legal information provided is helpful in assessing your position going forward. I am always happy to clarify any aspect of the answer provided should you so require. Feedback and a rating of my answer will be greatly appreciated as experts are only paid on answers positively rated by our clients.
Could the company say that because I accepted the salary as it was - then I knew that basic salary was being based on gp?
I did originally question the structure and how they calculated - but at that stage I was at least earning over 10k - so i let it go?
I have several email correspondence where I have asked for the GP clause to be taken out - or even just a basic salary to be agreed to and then the additional salary to be based on GP - will this help me or will it be another "nail in m coffin" for accepting it?
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