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Thread: Legislation on Commission earned on sales

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    Legislation on Commission earned on sales

    Hey everyone,

    My fiance currently works for a company that pays her a basic and comm. She does sales for different companies and gets different comms for different companies that she sells to (or different items). Each month she sees how much she has sold and is quite shocked at how low it is relative to all the sales made. In a good sales month, she will make less than a "bad" (i.e. less sold) month. Her bosses don't want to divulge how they come up with this figure, and we would like to know the legislation with regards to commission earned. Does the company have to tell you exactly how they get to this figure (Is it a legal obligation)? I would imagine they need to give this information to employees so that they can track their Commissions every month.

    Any help / pointing in direction of legislation would be highly appreciated.


    Thanks,

    Craig

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    Hi Craig

    I haven't heard of any legislation that forces a company to explain how they derive the commission, but stand to be corrected. This would really have been something to have sorted out when signing the employment contract.

    It does however seem a very strange policy for the company to have. Commission is often used as a tool to motivate sales employees. It must be extremely demotivating to get lower commission on a good month than a bad month. Can't she just approach them and explain this dilemma and the effect it has on her motivation?

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    Dave A (06-May-11)

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    Site Caretaker Dave A's Avatar
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    All sorts of possible reasons why the comm doesn't follow the turnover - the cut-off date or the comm being based on gross profit comes to mind.

    I can't think of a good reason why the company would not want to be transparent about the issue, though.
    The trouble with opportunity is it normally comes dressed up as work.

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    Diamond Member Justloadit's Avatar
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    I reckon she is being shafted. The moment there is no transparency, is simply because they do not wish to pay the commission. I have seen this so often with the big companies who should be paying commission for sales. I do not want to mention names here,but they are more than household names. We all use their services daily.

    Maybe she should enter into a buy and sell arrangement. She buys the good from the company, and sells it with a profit to the customer.
    Victor - Knowledge is a blessing or a curse, your current circumstances make you decide!
    Solar and LED lighting solutions - www.microsolve.co.za

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    Platinum Member sterne.law@gmail.com's Avatar
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    The other reason sometimes, quite unfairly, is where the company does not consider a sale a sale, until the account is paid.
    I tend to support the thinking that the lack of transparency points to dodgy dealings.
    Anthony Sterne

    www.acumenholdings.co.za
    DISCLAIMER The above is merely a comment in discussion form and an open public arena. It does not constitute a legal opinion or professional advice in any manner or form.

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    Diamond Member Justloadit's Avatar
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    Quote Originally Posted by sterne.law@gmail.com View Post
    The other reason sometimes, quite unfairly, is where the company does not consider a sale a sale, until the account is paid.
    I fully accept that, and in the past when dealing with commission, always stated, that commission is only paid once the account is settled by the client. In this way the sales person also looks after the company interest, and on occasion, goes past the client to ensure a payment is forth coming.

    Transparancy under these conditions is paramount to ensure the sales person remains committed.
    Victor - Knowledge is a blessing or a curse, your current circumstances make you decide!
    Solar and LED lighting solutions - www.microsolve.co.za

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