At the Tribunal | |
On 7 March 2003 | |
Before
MR RECORDER HAND QC
MR B GIBBS
MRS M McARTHUR
APPELLANT | |
RESPONDENT |
Transcript of Proceedings
JUDGMENT
Revised
For the Appellant | MR DAVID BROOK (of Counsel) Instructed By: Messrs Mundays Solicitors Crown House Church Road Claygate Esher Surrey KT10 0LB |
For the Respondent |
MR DANIEL TATTON-BROWN (of Counsel) Instructed By: Messrs Beetenson & Gibbon Solicitors Lauriston House Town Hall Square Grimsby DN31 1JB |
MR RECORDER HAND QC:
"Incentive Payments
Commission bonus or other incentive payments may be paid by the company subject to such conditions and at such times as the company shall notify you in writing from time to time. The entitlement to such payments may be revised or withdrawn at any time at the company's discretion".
"Dear Graham
I write to clarify a few points regarding your transfer from Bromsgrove to Leicester for the avoidance of any doubt, we agreed the following:
….
C) You will receive commission paid on the Ikon National Pay Plan….
I trust the above covers all areas discussed, however if I have omitted any detail, please let me know.
I must however at this point record my disappointment that such an experienced player as yourself has not yet registered a sale at this branch. Though your forecasts for business have been optimistic, I trust as Leicester's most experienced and highly paid sales person this position will be rectified in August. As you are aware, the pay plan does not reward failure".
"As a rule of construction ambiguity in contractual terms is resolved against the person who is seeking to rely upon the term in question".
We characterise that remark as cryptic because, having had the advantage of being able to read the full transcript of the decision in Chequepoint, it does not seem to us immediately apparent that the "rule"quoted above has any connection with that authority.
"We have considered the construction of the Clause headed "Incentive Payments" in the applicant's contract of employment with Erskine. The employer agreed that it would notify employees in writing of the conditions subject to which the commission would be paid. The pay plan of which the applicant had had written notification was the Old Plan. Under that plan "costs" to be deducted from gross commission had not included salary. Having been so notified the applicant was contractually entitled to rely on the terms of the Old Plan until such time as the respondent notified him in writing of the change in the conditions. We find on the balance of probability that it did not do so. The applicant was more than aware of the terms of the Ikon Pay Plan not least because of the effect on his wage packet but that does not mean that he had been notified in writing of the conditions of that plan. The respondent's attempt to impose the Ikon Pay Plan upon him was an attempt to unilaterally vary his contract of employment to which he did not consent. He remained in employment but under protest. He did not therefore affirm the contract; nor was there any compromise and accord so far as the basis upon which the calculation of commission was to be made, only in relation to certain deals where the entitlement of the applicant's commission was disputed. Had the respondent wanted to vary the conditions to which the payment of commission was subject (which it could have done at any time) all it had to do was notify the employee in writing and ensure that it was able adequately to prove that it had done so."
"In any event, the Applicant had notice of the Ikon pay Plan because of the express reference to that Plan in Mr Wadd's letter to him dated 31 July 1997 or by regular mailing".
"Having been so notified the applicant was contractually entitled to rely on the terms of the Old Plan until such time as the respondent notified him in writing of the change in the conditions. We find on the balance of probability that it did not do so. The applicant was more than aware of the terms of the Ikon Pay Plan not least because of the effect on his wage packet but that does not mean that he had been notified in writing of the conditions of that plan. … Had the respondent wanted to vary the conditions to which the payment of commission was subject (which it could have done at any time) all it had to do was notify the employee in writing and ensure that it was able adequately to prove that it had done so."
"The employee's basic salary will be £……. per year. In addition the company may, at its absolute discretion, pay to all or any of its employees an annual bonus….the terms and conditions of any such bonus scheme to be notified to employees from time to time".
In 1992 the employee had been written to in terms that notified him as to the detail of a new bonus structure. Not only the fact that there was to be a new bonus structure was brought to his attention but also some detail as to how it was to be calculated. As we understand it Mr Brook relied on paragraph 15 of the Judgment of May LJ, which is in the following terms:-
"In my judgment, the respondent's submission correctly construes clause 18 of the contract and correctly applies the facts established by the evidence to it. The appellants had a discretion as to the payment of bonus and had agreed that from time to time they would notify the terms of any bonus scheme. The letter constituted notification within clause 18. Once such a scheme was notified, be it individual or referable to a group, the respondent was entitled to the bonus until, in their discretion, the employer notified a change in the scheme or its withdrawal. It is unnecessary in this appeal to determine what would have constituted appropriate notice since no notice of any kind was established by the evidence. That construction, in my view, accords with the terms of the clause, but it also accords with common sense. If you tell an employee that he is going to get bonus payments on certain terms, you are or ought to be obliged to pay bonus in accordance with those terms until the terms are altered and notice of the alteration is given".
(italics added)
"It was not credible that the applicant did not receive any subsequent pay plan in the 3½ years he worked for the respondent."
We think that there was an ample evidential basis for them doing so and that the decision was not perverse.