Commission disputes and team input clarified by the EAT
The Employment Appeal Tribunal has provided clarity on how commission schemes operate, highlighting the importance of well-drafted commission clauses and clear rules on apportioning team effort.
Background
In the case of Saul & Co v Rashbrook, a newly qualified solicitor at a City firm claimed unlawful deductions from wages when he was told no commission was due for his first commission year. His contract promised 20% commission on profit costs above a threshold set at three times salary, but only “in respect of the work carried out by the employee whilst acting as a solicitor to the company.” The firm said that much of the billed work on his files had been carried out by supervising partners, other fee earners and trainees, and that apportionment meant he had not crossed the threshold. The Tribunal disagreed, finding that commission was due on the amounts he had invoiced once the threshold was crossed, without apportioning for others' work.
What the EAT decided
On appeal, the EAT held the Tribunal had misinterpreted the contract. Commission was payable only on profit costs referable to the employee’s own work. That wording had to be given effect, and it made commercial sense in a team environment where multiple people contribute to a matter. The EAT also found it was perverse to say there was “no evidence” of records for apportionment when there was material identifying who else had worked on the files and explaining the approach taken. Applying the principle that an appeal court can substitute its own decision where only one outcome is realistically open, the EAT concluded that a first-year solicitor, working under supervision with support from others, could not have generated enough of his own profit costs to exceed the threshold. The appeal was allowed and the claim was dismissed without sending the case back to the Tribunal.
Why this matters for employers
Although the case arose in a law firm, the principles are relevant well beyond the legal sector. With more flexible and collaborative models of working, and commission or incentive schemes often forming part of reward structures, clear drafting and transparent record-keeping are essential in managing team-based contributions.
Where a commission scheme ties payment to the employee’s own work, employers are entitled to apportion fees to reflect team contributions and assess whether the individual’s attributable profit costs exceed any threshold. It is sensible to ensure the contract states this plainly, including how apportionment will work, and to keep workable records that show who contributed to a file.
Communicating the methodology during the year, and issuing the statements your contract promises, will help manage expectations and reduce the risk of disputes. Thresholds should be realistic for junior roles; but where the scheme is clear and the attribution is supported by records, the Tribunal should respect the agreed mechanism. Employers who use introducer-style uplift for work brought in by an employee should also make that distinct from commission on personal work, as this contract did.