Generally bonuses and commission payments arise from a contract of employment. Accordingly, if bonuses or commissions remain due an employee has a right under their contract to recover these amounts.
Further, section 323 of the Fair Work Act 2009 (Cth) applies to ‘incentive-based payments and bonuses’ meaning there may also be a breach of the Fair Work Act 2009.
A commission payment is an amount paid to an employee based on revenue, generally sales. Ordinarily, the commission payment is calculated as a fee based on a sale or percentage of the revenue and is considered part of the employee’s normal remuneration.
In certain occupations, such as real estate agents and sales representatives, work is performed which entitles an employee to commissions, which do not fall due until after the cessation of employment.
Bonuses, unlike commissions, generally do not refer to revenue achieved by an employee but rather the completion of milestones sometimes by reference to a complication formula. In many cases the payment of a bonus is discretionary and your employer may retain the right to not pay you a bonus notwithstanding that targets have been met.
Although the contract of employment will cease at the time of termination it may be a term of the agreement that bonuses or commissions remain payable to an employee. Where the contract is unclear as to the effect of termination on bonus or commission payments there may be a dispute which results in litigation.
It is important to have a careful read of your employment contract, modern award or enterprise bargaining agreement to see if there is a clause pertaining to bonus and commission payments and if your employer is in breach of those terms.
If you are a high income earner and you feel that your employer has breached the terms of your employment, please do not hesitate to contact our lawyers at McDonald Murholme.