Homeworkers: Could your contract cost you commission?

Homeworkers: Could your contract cost you commission?

It took former cruise ship entertainer Jacqui Ridler a year to find a job as a travel agent.

Her excitement at securing a job at The Co-operative Travel Group’s Future Travel, now The Co-operative Personal Travel Advisors, in 2006 meant she didn’t really worry about the small print in her contract. 

Ridler went from earning £21 in her first pay packet to becoming a top-selling cruise specialist with an annual turnover of £1 million.

However, the small print in her contract came back to haunt Ridler when she decided to leave.

Her contract stated that on leaving the business, self-employed homeworkers would forfeit commission on forward bookings. In Ridler’s case, this amounted to a loss of nearly £6,000 on bookings up until April next year.

Her husband is having to pay the mortgage until she is paid by her new employers, The Luxury Cruise Company, and re-establishes similar booking levels.  The Co-operative Travel Group declined to comment.

The issue raised is a sticky one.
In December last year five homeworkers won the right to claim thousands of pounds in commission after taking their former employer Holidays First to a tribunal.

Each had lost £4,000 after they left Holidays First, a Freedom Travel Group member. The agency later went into liquidation, but the name was bought by Kwik Travel.

The homeworkers successfully argued that despite being deemed self-employed in their contracts, they were in fact employed as workers of the company – and therefore entitled to the commission – based on the fact they were under pressure to reach certain targets, with commission cuts if these were not reached.

One of the homeworkers, Jane Taylor, who now works for Travel Counsellors, said: “Every situation is different and we won because we were classed more as workers.”

Taylor not only kept evidence of set targets and commission cuts but, critically, never signed a contract with her employer. “I was not happy about that part of the contract [on losing forward commissions] and never signed it. It was left. This went in my favour at the tribunal.”

Taylor feels the conditions on leaving a job are not only unfair but can also create an unsuccessful workforce. She added: “Do employers really want people working for them who are not happy?”

Travel Counsellors chairman David Speakman says employers need to “start treating people properly”, adding: “The only reason employees should stay with you is because you provide a service they cannot get anywhere else.”

For homeworkers like Ridler, recouping forward commissions on bookings will depend on whether they are considered self-employed or employed by the company, and the conditions in their contract.

Also central to this issue is whether the bookings are driven by company marketing or the homeworker’s own sales leads.

As the case of the Holiday First homeworkers shows, there are times when self-employed homeworkers have a right to reclaim commissions earned.

Ridler remains hopeful that by speaking openly about her case she can draw attention to the issue and help pave the way for others. “Hopefully this might spark some changes for other homeworkers,” she said.

What the law says

Travlaw associate Charlotte Black explains

Under the Commercial Agent Regulations 1993, self-employed homeworkers appointed as commercial agents are entitled to commission on:

  • Commercial transactions concluded during the period covered by the agency contract
  • Bookings by repeat customers for a similar holiday to one they have already taken

A commercial agent is entitled to commission on transactions concluded after the contract is terminated if:

  • The transaction is mainly attributable to his/her efforts during the period covered by the contract
  • The booking is concluded within a reasonable period after the contract is terminated

This first of these criteria is, however, open for interpretation. Was the booking made due to the company’s marketing or as a result of the agent’s marketing efforts? Does the commission pertain to bookings in 2012-13, for example? What if the customer cancels? Did the agent secure a client but not conclude the transaction?

What do you think? Email juliet.dennis@travelweekly.co.uk


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