After an employee leaves the company, he asks the company for commissions and performance pay. The company, citing its management rules, temporarily withholds the commission and believes that the sales performance achieved has nothing to do with the employee.

Recently, the Intermediate People's Court of the Second Division of the Xinjiang Production and Construction Corps made a final judgment ordering a Xinjiang company to pay Li more than 120,000 yuan in performance commissions earned during his employment.

[Case Review]

In June 2021, Li signed a three-year labor contract with a Xinjiang company. His post was sales, and his position was regional manager. The contract stipulated that labor remuneration would be implemented through an internal salary distribution method combining basic salary and performance salary, with performance salary determined through assessment according to the internal distribution method based on Li's work performance, work results, and actual contributions.

On March 31 last year, Li applied to the company for a transfer. On the same day, the company's sales back office published the "Sales Department Staff Adjustment and Management Plan" in the company WeChat group, adjusting Li from regional manager to salesperson.

On August 22 of that year, the Xinjiang company issued a "Notice of Termination of Labor Contract" to Li, and the labor relationship between the two parties was terminated. However, for the two transactions Li completed during his employment, although the company acknowledged that they were Li's performance, it decided, on the grounds that payment for the transactions had not yet been recovered, to temporarily withhold the commission in accordance with company rules.

Subsequently, Li applied for labor arbitration, requesting an award ordering the Xinjiang company to immediately pay him more than 130,000 yuan in partial performance commission wages from 2022 to 2023. The arbitration committee refused to accept the case on the grounds that the arbitration request was outside the scope of handling. Li then filed a lawsuit in court.

[Trial Process]

The Xinjiang company argued that the "Labor Contract" signed with Li stipulated an internal salary distribution method combining basic salary and performance salary, and did not stipulate the application of a piece-rate wage system. What Li claimed was a commission, equivalent to consideration payable under a conditional internal contracting or work-for-hire contract. In addition, other employees had completed most of the work content for which Li was responsible, so the performance should not all belong to Li, and the commission for the unrecovered payment portion should not be paid to Li when the attached condition had not been fulfilled.

Li stated that commission wages are a component of a salesperson's wages, and it is impossible for an internal contracting or work-for-hire relationship to exist between him and the company.

The court of first instance held that, according to the company's "Performance Management Measures," Li's wages included sales commission wages, and sales commission wages were a component of Li's wages.

In addition, the court held that an individual's wages and remuneration cannot be split apart merely because of mutual cooperation in the work process, and the performance management measures formulated by the company also clearly stipulated the wage calculation method for regional managers and other staff. Based on the evidence provided by both parties and the facts ascertained at trial, Li received commission wages in accordance with the company's performance management measures, which did not violate public order and good morals or the principle of distribution according to work.

After Li left the company, he could not know the actual time of payment collection. To prevent further litigation and increase in litigation burden and other factors, the court of first instance supported the Xinjiang company paying Li more than 120,000 yuan in performance commission wages from 2022 to 2023.

[Judgment Result]

The Xinjiang company was dissatisfied and appealed. The court of second instance ultimately rejected the appeal and upheld the original judgment.

[Case Analysis]

Articles 3, 4, and 6 of the "Provisions on the Composition of Total Wages" stipulate that total wages refer to the total labor remuneration directly paid by each unit to all its employees within a certain period. Total wages consist of six parts: time wages, piece-rate wages, bonuses, allowances and subsidies, overtime wages, and wages paid under special circumstances. Among these, piece-rate wages include wages paid to individuals according to turnover commission or profit commission methods. That is, business commissions fall within the scope of wages.