Leave - Sales agents working on commission only

[Mary-Anne]

I would like to know if a agent only working on commission how the leave work?

Thanks

Mary-Annne

[Dave A]

I would like to know if a agent only working on commission how the leave work?

As in paid leave?

[Mary-Anne]

Yes as paid leave?

[Dave A]

Obviously there is no financial effect as we are talking commission only remuneration. Thinking about a call centre environment, I can see that attendance might be an issue in its own right though.

All seems a little meaningless in a commission only deal, but for what it might be worth -
The Basic Conditions of Employment Act provides for 1 shift paid leave for every 17 shifts worked, or 3 weeks paid leave for every completed year.

Provided the BCEA is applicable, of course.

[Justloadit]

I heard on the radio recently, that commission based earnings attract an average of the commission as the reference for leave pay as the reference figure.

[sterne.law@gmail.com]

Take the last 13 weeks of earnings and obtain an average.
Multiple by the relevant leave quota.

[BusFact]

My thoughts were always that a commission only agent is exactly that - commission only. However a few weeks ago my accountant enlightened me on a different point of view. He pretty much said that a commission only employee is entitled to receive an average commission payment during their annual leave.

I thought he was smoking his socks and promptly forgot about his point of view. However Dave's example of a call centre operator does have an inkling of logic behind it. In that scenario the employee is expected to be at the office like a regular employee. In that case I understand that they get all the perks of being an employee and the commission is simply used as a means to calculate a salary value.

Take however the example where one would have sales "agents", such as work from home moms. These types of agents do not having working ours dictated and are pretty independent from the commission payer. Surely this type of agent is not entitled to paid leave?

Does this then become a decision around whether the person is an employee or an independent contractor (or whatever the term is they use now)?

If I have got the above sort of correct, then from the OP:

1) If the "agent" is a genuine employee who has to work certain hours and follow employee type rules, then they are entitled to leave and leave pay calculated as per Anthony and Victor's posts above.
2) If the "agent" is a genuine independent agent who works on their own terms and times and receives only commission payments (no basic) then I would deduce that no leave is due, or leave pay calculated.

What say you guys?

[Dave A]

What say you guys?

I think we're certainly getting closer to something that makes sense.

[sterne.law@gmail.com]

You should refer to the code that speaks to who is an independent contractor.
This determines if a person is an employee or independent. The name the contractor is not important, it's the content.

[BusFact]

You should refer to the code that speaks to who is an independent contractor.
This determines if a person is an employee or independent. The name the contractor is not important, it's the content.

Then are you saying my view is correct? If so, regarding the OP, the first thing to do is determine if the "agent" is an employee or an independent contractor.

Only once its confirmed they are indeed an employee, should leave commission be calculated as per earlier posts.

I'm probably being a bit pedantic here, but the term "agent" would normally indicate to me an independent person, not an employee. Although this does not have to be the case of course.

[sterne.law@gmail.com]

The use of a word or a title of contract may not be the real truth.
Example, a sale agreement may be worded as a lease (for tax purposes) but the content is a sale.
Or, an employee is called a contractor, has a contract that says independent contractor or agent. Similarly, an employee may sign a settlement agreement, but the true substance is no more than a termination.
The content of the contract and actual relationship is what matters (substance over form). One of the leading cases in this regard was that of an estate agent. The court found that the agent was an employee