- Labour Court rules in favour of former Stallion Security salesperson, awarding unpaid commission of R89 262,84 with interest.
- The court rejects the company’s claim that an “industry norm” prevented payment once the employee resigned.
- The judge confirms that tacit terms cannot be inferred without clear evidence that both parties would have agreed.
The legal battle arose after the plaintiff, employed as a salesperson at Stallion Security (Pty) Ltd, resigned on 26 July 2023. During his employment, he had signed up several clients, with payments due to the company only arriving after his departure.
According to the judgment, the amount of commission owed for these sales was “common cause,” though the exact dates of each client payment were not in dispute.
The plaintiff explained in court, “I worked hard to secure these clients, and it was understood that commission would follow once the company received payment. I had no idea that leaving the company could forfeit what I had earned.”
The unpaid commission left the plaintiff in a difficult position financially, intensifying the urgency of his claim.
Defendant cites industry norm, plaintiff disputes
Stallion Security refused payment, arguing it was an “industry norm” not to pay commission if an employee resigned before client payments were made. Kevin Monk, the company’s sales director, testified that “In my experience, we have not paid commission where an employee leaves before the client pays. It is how the industry operates.”
During cross-examination, the plaintiff’s legal team probed the claim, “Mr Monk, can you provide any written industry guidelines or examples of other employees being denied commission under these circumstances?” To this, Monk replied, “No, I cannot. It is simply my experience.”
Judge RN Daniels noted that such ipse dixit testimony was insufficient to establish an industry norm. “An industry norm must be shown to be universally and uniformly observed within the particular trade concerned, long established, notorious, reasonable and certain, and does not conflict with positive law.”
Contract terms make commission payable
The court examined the employment contract in detail. Annexure A sets out the commission calculation and includes clause 4.2.1, stipulating that commission is payable “upon receipt of payment from the client.” There was no clause linking entitlement to continued employment.
“When the terms of the employment contract are considered using the interpretative triad of text, context, and purpose, the meaning is clear that the commission is payable upon receipt of the monies from the client,” Judge Daniels wrote.
The judgment emphasised that even if an industry norm existed, it could not override the clear contractual terms.
Tacit terms cannot override written agreement
The court considered whether the alleged industry practice could be implied as a tacit term of the contract. Citing City of Cape Town (CMC Administration) v Bourbon Leftley, Judge Daniels held that “a proposed tacit term can only be imported into a contract if the court is satisfied that the parties would necessarily have agreed upon such a term if it had been suggested at the time.”
The plaintiff had never been asked to agree to such a term, and the court concluded it could not be implied. “The court is not satisfied that the parties would necessarily have agreed upon such a term if it had been suggested at the time,” the judgment states.
Court orders payment with interest and costs
The Labour Court declared that Stallion Security had breached the employment contract. The company was ordered to pay R89 262,84 in commission, together with interest at the prescribed rate from when the payment was due, and to cover the plaintiff’s legal costs.
“The plaintiff has proven that he was entitled to payment of the commission and that it was not paid. The defence raised by the defendant fails,” Judge Daniels concluded.
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