Commission scheme change: constructive dismissal claim fails as non-contractual benefit
A Business Development Manager who resigned after his employer changed his commission scheme lost his unfair dismissal claim. The tribunal found the commission was never contractual and the employer acted reasonably.
1 min read · Last updated 19 May 2026
Case details
- #commission-scheme
- #non-contractual-benefit
- #constructive-dismissal
- #implied-term
- #trust-and-confidence
Key facts
- The claimant was employed as a Business Development Manager from 13 February 2017.
- A letter dated 13 March 2017 stated commission was non-contractual and subject to change.
- The claimant did not challenge the non-contractual nature of commission until his resignation in March 2023.
- The respondent changed the commission scheme in 2022 after the claimant's team grew.
- The claimant resigned on 6 March 2023, citing breach of contract over commission changes.
Timeline
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Interview with Gordon McDonald
Claimant interviewed for BDM role; commission discussed but contractual basis not specified.
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Offer letter sent
Offer letter sent to claimant; silent on commission but mentions discretionary bonus.
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Employment commenced
Claimant started work as BDM for Instrumentation Division.
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Commission confirmation letter
Letter confirmed 1% commission on turnover, stating it was non-contractual and subject to change.
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Moved to 2020 commission scheme
Claimant moved to BDM commission scheme; again stated non-contractual.
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Promoted to National Account Manager
Claimant promoted; commission scheme remained non-contractual.
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Consultation on new commission scheme
David Garden began consulting claimant on a new scheme due to team growth.
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Adjusted commission scheme offered
Respondent offered a short-term adjusted scheme to boost department performance.
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Claimant resigned
Claimant resigned citing breach of contract over commission changes.
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Employment terminated
Claimant's notice period ended; employment terminated.
The legal issue
The tribunal had to decide whether the claimant had a contractual right to a 1% commission on turnover, and if not, whether the respondent's changes to the commission scheme amounted to a repudiatory breach or breach of trust and confidence.
The outcome
The tribunal dismissed all claims, including unfair dismissal, unauthorised deduction from wages, and breach of contract.
The key reason was that the commission was clearly stated as non-contractual and subject to change from the outset, and the claimant had accepted this for six years without challenge. The employer's consultation and adjustment of the scheme were reasonable in the circumstances.
No compensation was awarded as the claims failed.
Lessons & takeaways
- If your employment contract states a benefit is non-contractual and subject to change, you cannot later claim a contractual right to it.
- Resigning and claiming constructive dismissal requires a fundamental breach of contract – a change to a non-contractual benefit is unlikely to qualify.
- Employers should clearly document the non-contractual nature of discretionary benefits and consult employees before making changes.
- Employees who accept a non-contractual arrangement for a long period may find it harder to argue it became contractual through custom and practice.
When a commission change is not a breach of trust
This case shows that not every change to a bonus or commission scheme will give an employee the right to resign and claim constructive dismissal. The claimant, a Business Development Manager with six years' service, resigned after his employer adjusted his commission structure. He argued that the change was a breach of contract and destroyed trust and confidence.
However, the tribunal found that the commission had always been described as non-contractual and subject to change. A letter from March 2017, just a month after he started, made this clear. The claimant had accepted this arrangement for years, and the employer had consulted him before making the changes.
What the employer did right
Mabey Hire Ltd could have handled things differently, but the tribunal noted that they engaged in consultation, offered a short-term adjusted scheme, and had a legitimate business reason for the change – the claimant's team had grown and the old scheme was no longer fit for purpose. The employer did not act arbitrarily or in bad faith.
Why the result matters
This case reinforces that constructive dismissal claims based on changes to non-contractual benefits face a high hurdle. Employees who want to protect their commission or bonus should ensure it is written into their contract as a contractual entitlement. Employers, meanwhile, should follow a fair process when making changes, even to non-contractual benefits, to avoid claims of breach of trust and confidence.
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