No bar to claiming unpaid commission if earning high income
Regardless of whether an employee is a high income earner, they are entitled to recover any amounts owed to them relating to their employment. A high income threshold only exists in relation to unfair dismissal applications.
Duty of employer to pay employee amounts payable
Section 323 of the Fair Work Act (2009) Cth provides that an employer must pay an employee amounts payable in relation to the performance of work in full and at least monthly.
Importantly this includes incentive-based payments and bonuses which may be payable pursuant to an employment contract, enterprise agreement or modern award.
Failure by Employer to keep records of commission earnt
In Murrihy v Betezy.com.au Pty Ltd (2013) FCA 908 the court held that an employer cannot claim that an employee cannot prove the amount owed to them because the employer themselves failed to keep records necessary to calculate commission earnt. The court considered this to be a breach by the employer of an implied duty to cooperate with the employee and to ensure the employee receives all the benefits of his or her employment contract.
It is however advised that an employee always seek from their employer, and retain copies of, payslips and records of any commission earnt to avoid ambiguity.
Recovering payable commissions
Contractual claim for commission owed
If the amount of a commission owed is referred to in a contract of employment, any non-payment of this amount is actionable by way of suing the employer for breach of contract. A court may award damages in the form of compensating the employee for monies owed.
Ordinarily breach of contract claims can be heard by the Magistrates’ Court, however if a claim is made for money owed exceeding $100,000 it must be heard by the County Court of Victoria.
Recovery through small claims process
Section 548 of the Fair Work Act 2009 (Cth) provides that a plaintiff may pursue claims of unpaid monies owed pursuant to a contract of employment or under the Fair Work Act 2009 (Cth) through the Federal Court Small Claims process. The claim must not be for an amount exceeding $20,000, so high earners should consider the amount of commission owed. The advantages of this process are that:
- the process is generally quite quick;
- court filing fees are significantly lower; and
- the normal rule of evidence do not apply and a less formal approach is taken in court proceedings.