Employee agreed to certain level of sales commission when hired but no written contract was provided
An Ontario worker is entitled to the greater benefit of a commission agreed to verbally as compensation when she was hired, rather than just the minimum wage, the Ontario Labour Relations Board has ruled.
In July 2012, Starr Smith responded to an advertisement placed in the newspaper with the heading “Cash paid daily” and stating that the job — involving telephone sales — would provide “$300 – $500 per day in advertising sales.” The position was with a numbered corporation operating as a specialty advertising company. The company provided promotional materials such as pens and coffee mugs with customized logos and names for clients.
The company hired Smith and she was told she would receive a 30 per cent commission on all telephones sales she could generate. However, no terms of her employment were provided in writing.
Smith worked for eight days between July 16 and 25, 2012. She worked between four and 8.75 hours each day, for a total of 61.5 hours, and generated a total of $3,160 in sales. Rather than paying Smith in cash — as the job advertisement had indicated — the company gave her three cheques on July 20, 27, and Aug. 10. Each cheque was for $189.77, for a total of $569.31 — significantly less than 30 per cent of her sales, which would be $948. The company told Smith that her largest single sale of $1,200 could end up being for less than that, but there was no verification for a lesser amount.
Smith’s employment was terminated on July 25, after which she received her second cheque. The third came after she filed a claim with the Ontario Ministry of Labour, which contacted the company regarding Smith's complaint.
The Ontario Labour Relations Board noted that the Ontario Employment Standards Act, 2000, stipulated that “if one or more provisions in an employment contract or in another act that directly relate to the same subject matter as an employment standard provide a greater benefit to an employee than the employment standard, the provision or provisions in the contract or the act apply and the employment standard does not apply.” In Smith’s case, her position included an entitlement to a 30 per cent commission of the sales she generated on the telephone, to which she and the company agreed verbally when she was hired. Ontario’s minimum wage at the time was $10.25, which would have entitled Smith to $630.37 in wages under legislative minimums. However, her commission as agreed upon when she was hired was greater than those minimums, so she was entitled to that amount, said the board.
