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UKSolicitorJA
UKSolicitorJA, Solicitor
Category: UK Employment Law
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Experience:  solicitor
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I am about to accept an offer of employment as a VP Sales EMEA.

Resolved Question:

I am about to accept an offer of employment as a VP Sales EMEA. My remuneration is made up of a basic annual salary and commissions and bonuses. I am concerned about two areas of the contract they have provided
1. They have a PILON clause. I plan to ask them to remove it for obvious reasons. If they won't, is there an alternative form of words that will give them the protections they want but leave the door open for all payments at termination to be made tax free (within the limit of course)
2. The contract seems a little one sided on the subject of commissions and bonuses for the following reasons
a. They state that bonuses and commissions do not accrue during a notice period (three months in my case). Is that normal and can I reasonably refuse the clause.
b. Does the offer letter form a part of the contract because the OTE bonus is identified there but not in the contract itself
c. They reserve the right to determine the terms, the amount of commission payable, and the intervals of payment. They also reserve the right to discontinue and amend it (including retrospectively). They also nominate the Senior line manager as the sole arbiter in the event of dispute. It seems draconian. Is it normal or should I refuse the clauses associated with it?

Thanks in advance

Perry
Submitted: 11 months ago.
Category: UK Employment Law
Expert:  Ben Jones replied 11 months ago.

Ben Jones : Hello, my name is XXXXX XXXXX it is my pleasure to assist you with your question today. Want is it that you would like to achieve here please?
Customer :

I'm not sure what additional information you require beside my brief. I'm looking to amend their contract to deal with my questions based upon some expert advice.

Customer :

Please indicate when I can get an answer please. The question is urgent

Expert:  UKSolicitorJA replied 11 months ago.
Hello,

To answer your queries:

1) without a PILON clause, your employer would not be able to hold you to any post termination restrictions in the contract e.g. confidentiality, competition, non solicitation etc. if they dismissed you without notice and paid you compensation in lieu of notice. I am afraid your contract either has a PILON clause (and you face the risk of having to pay tax on any termination payments) or not.

2) a) you may negotiate with your employer, it depends from employer to employer, and is not a question of being normal or not;

b) yes, you may rely on the letter of offer where the contract is silent about OTE definitions, however, you should ask for it to be incorporated into your contract;

c) this is again a point of negotiation I am afraid. It varies from employer to employer.

Hope this clarifies. Please leave feedback

UKSolicitorJA, Solicitor
Satisfied Customers: 3528
Experience: solicitor
UKSolicitorJA and 4 other UK Employment Law Specialists are ready to help you
Customer: replied 11 months ago.

If I was to provide you with the text of the offending clauses, would you be able to suggest a form of words or changes that I should propose?

Expert:  UKSolicitorJA replied 11 months ago.
I could try but please leave feedback for the previous answer.
Customer: replied 11 months ago.

But the question is not concluded

Expert:  UKSolicitorJA replied 11 months ago.
It does not matter, I will try and assist for free as long as you leave feedback first.
Customer: replied 11 months ago.

So can we move this forward now that I have left you feedback?

Customer: replied 11 months ago.

I have left feedback and based on your previous reply had expected further discussion. Will you be assisting me further?

Expert:  UKSolicitorJA replied 11 months ago.
Hello,

I am online now. How may I assist further?
Customer: replied 11 months ago.

If I was to provide you with the text of the offending clauses, would you be able to suggest a form of words or changes that I should propose?


 


 


 


Expert:  UKSolicitorJA replied 11 months ago.
Yes, please post the wording.
Customer: replied 11 months ago.

Hi


 


The offending wording is attached below.


 


In addition, the Employee shall be entitled to participate in a commission plan for VP Sales to be notified to the Employee as being applicable to the Employee from time to time and, subject to the terms of the commission plan. The Employer may in its absolute discretion determine the terms of the commission plan, the amount of commission payable and the intervals at which commission shall be paid.
The Employee's entitlement under any commission plan applicable to Employee is subject to the following rules:
(a) the plan may be discontinued or amended (retrospectively or otherwise) at any time by the Employer. Participation in any commission plan in any year does not oblige the Employer to extend or repeat that participation thereafter. In the event of discontinuance there will be no obligation on the Employer to provide a replacement plan;
(b) if Employee is under notice of termination (whether given by the Employee or Employer), the Employee will lose his/her entitlement to receive any further commission award or payment under the scheme; and
(c) any disputes concerning the scheme will be resolved by the SVP Global Sales (or acting), whose decision shall be final and binding.


 


I need to explicitly include the offer letter as a referral in the contract to ensure that the commission package is clear.


 


I also need to establish that commission under the agreed plan is regarded as an integral part of my remuneration package and therefore should be treated the same way. i.e. it cannot be discontinued or amended; that they have an obligation to provide an acceptable plan; that it is payable (accruable) during any termination period.


 


Any amendments have to be agreed between the parties and in the event of a disagreement the SVP Sales cannot be the sole arbiter.


 


I would be grateful if you could suggest a form of words, modifications or deletions to the above that I can propose to them that achieve the above.


 


Many thanks


 


Perry

Expert:  UKSolicitorJA replied 11 months ago.

Hello Perry,

Thank you.

I suggest that you ask for the entire wording of the commission plan to be included in your contract or a sentence be included that “The Employee shall be entitled to participate in a commission plan for VP Sales on the terms and conditions appearing in the Employee’s letter of offer dated >>>>>>>”.

As for the amendments which you are proposing, I am afraid the commission plan as worded in your letter of offer is discretionary and your Employer has reserved the right to amend or set its terms from time to time.

If you want it to be contractual and not discretionary, you need to ask your Employer to confirm that this will indeed be the case in which case the entire wording will need amending so that the commission plan is not discretionary but is contractual. Even if discretionary, it may be implied by the courts/tribunal as contractual depending on many factors. See here for an article dealing with bonuses, the same principles would apply to you: http://www.hrmagazine.co.uk/hro/opinion/1017259/how-employers-withhold-bonus-payments-staff

Hope this helps

Customer: replied 11 months ago.

I had really already understood everything contained in your answer. What I was after as I said was


 


"I would be grateful if you could suggest a form of words, modifications or deletions to the above that I can propose to them that achieve the above."


 


Can you look again at my question please.

Expert:  UKSolicitorJA replied 11 months ago.
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Customer: replied 11 months ago.

Great. Thank you.


 


Do I need to rate your service again?

Expert:  UKSolicitorJA replied 11 months ago.
Welcome.

It is up to you to rate again, but if you do so, you will pay again.

All the best
Customer: replied 11 months ago.

That's frustrating as I obviously don't want to pay again, but would like to increase my rating to excellent!


 


Thanks for your help

Expert:  UKSolicitorJA replied 11 months ago.
You may send a request to customer service.

Thank you for the feedback.
Customer: replied 11 months ago.

I'll do that!

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