What Is the Limitation Period for a Redundancy Related Commission Claim?

A redundancy related commission claim arises where an employee or worker believes they are owed unpaid commission following termination of employment due to redundancy. This commonly occurs where commission is earned but not yet paid at the point of dismissal, or where contractual terms exclude payment because employment ends before a specified date.

Commission disputes are frequent in sectors such as sales, finance, recruitment, and business development, where pay is heavily performance-based. When redundancy occurs, disputes often focus on whether commission has already been “earned” or whether contractual conditions prevent payment after termination.

A central issue in all such claims is the limitation period, which determines how long a worker has to bring a claim in the Employment Tribunal or civil courts.

Legal Basis for Commission Claims in Redundancy Cases

Commission claims linked to redundancy typically arise under:

• Employment Rights Act 1996 (unlawful deduction from wages)
• Breach of contract (written or implied contractual commission schemes)
• Working Time Regulations 1998 (rare but sometimes relevant in pay structuring disputes)

Common commission disputes include:

• Unpaid commission on deals completed before redundancy
• Commission excluded due to termination before payment date
• Disputed “earnings” definitions in commission schemes
• Pro-rata commission claims for work completed pre-dismissal
• Clawback of commission following redundancy dismissal

The classification of commission as “wages” is key to determining jurisdiction and limitation rules.

Employment Tribunal Limitation Period

Standard rule: 3 months less one day

For most redundancy related commission claims brought as unlawful deduction from wages, the limitation period is:

• 3 months less one day

This applies where:

• Commission is treated as wages
• The employer fails to pay commission that has been earned
• There is an ongoing or final underpayment at termination

The time limit generally starts from:

• The date commission should have been paid, or
• The final payroll date after redundancy dismissal

Commission as “Wages” and Its Legal Impact

Commission is usually treated as wages where it is:

• Contractually guaranteed or formula-based
• Clearly linked to sales or performance outcomes
• Regularly paid as part of remuneration

Where commission qualifies as wages:

• It falls under unlawful deduction from wages rules
• The tribunal limitation regime applies (3 months less one day)

Where commission is purely discretionary:

• The claim may instead be treated as breach of contract
• Civil court limitation rules may apply

“Series of Deductions” in Commission Claims

Commission disputes often involve repeated underpayments over time.

If a tribunal accepts a series of deductions, then:

• The limitation period runs from the last unpaid or underpaid commission payment
• Earlier unpaid commission may still be included in the claim
• The claim may capture multiple pay periods

If a series is not established:

• Each missed commission payment has its own 3-month limitation period
• Older claims may become time-barred

This issue is especially important in ongoing sales roles affected by redundancy processes.

Civil Court Limitation Period for Commission Claims

Where commission claims are brought as breach of contract rather than wages claims:

• The limitation period is 6 years from the date of breach

This applies under the Limitation Act 1980 and is relevant where:

• The commission scheme is complex or discretionary
• The claim exceeds tribunal jurisdiction
• The worker is no longer within the employment tribunal framework

When Time Starts Running in Redundancy Commission Disputes

1. Commission earned before redundancy dismissal

Time usually starts from:

• The contractual payment date
• Or the date commission became payable under the scheme

2. Commission affected by redundancy notice period

Time may start from:

• Each payroll date where commission is withheld
• Or the final payment date on termination

3. Deferred or “pipeline” commission

Where commission depends on future completion or client payment:

• Time may start when conditions are assessed and refused
• Or when redundancy prevents fulfilment of scheme conditions

4. Clawback or repayment disputes

Where employers reclaim commission:

• Time runs from the date repayment is demanded or deducted

ACAS Early Conciliation and Limitation Periods

Before issuing an Employment Tribunal claim, ACAS Early Conciliation must be completed.

This affects limitation periods:

• The clock is paused during conciliation
• Time stops when ACAS is notified
• Time resumes after the certificate is issued

Important rules:

• ACAS must be contacted before the limitation expires
• It does not revive expired claims
• The pause period is added to the deadline calculation

Extensions of Time

Tribunal claims (unlawful deduction from wages)

Extensions are limited. A claimant must show:

• It was not reasonably practicable to bring the claim in time
• The claim was made promptly once it became possible

This test is applied strictly and rarely succeeds unless exceptional circumstances exist.

Civil court claims

For breach of contract commission claims:

• The 6-year limitation period is strict
• Courts do not generally extend this period

Common Redundancy Commission Disputes

1. Commission excluded due to redundancy termination

Employers may argue:

• Employee was not employed on payment date
• Scheme requires active employment at payout

Tribunals examine:

• Contract wording
• Whether exclusion clause is enforceable
• Whether commission was already earned

2. Pro-rata commission claims

Issues include:

• Whether commission accrues over time
• Whether redundancy cuts off entitlement
• Whether performance thresholds were met pre-termination

3. Pipeline sales and pending deals

Disputes often arise where:

• Sales are in progress at redundancy
• Contracts are signed but payment is pending
• Employer attributes completion to post-termination timing

4. Discretionary commission schemes

Where commission is discretionary:

• Courts assess whether discretion was exercised reasonably
• Patterns of past payment may create implied entitlement
• Redundancy cannot be used arbitrarily to avoid payment

Interaction with Other Redundancy Claims

Commission disputes often overlap with:

• Unfair dismissal claims (3 months less one day)
• Redundancy pay claims (6 months less one day)
• Holiday pay claims (3 months less one day)
• Bonus disputes (3 months less one day or 6 years depending on claim type)

Each claim has separate limitation rules and must be assessed independently.

Consequences of Missing the Limitation Period

If the deadline is missed:

• Tribunal claims may be rejected outright
• Civil claims become statute-barred after 6 years
• Only limited extension arguments may apply in tribunal cases
• Some commission periods may be excluded from recovery

Practical Steps in Commission Disputes

To manage limitation risk:

1. Identify whether commission is contractual or discretionary
2. Determine when commission became payable under the scheme
3. Check redundancy termination date (EDT)
4. Assess whether deductions form a continuing series
5. Contact ACAS before limitation expires
6. Preserve commission statements, targets, and emails
7. Separate tribunal and civil court routes early

Key Takeaways

The limitation period for a redundancy related commission claim depends on how the claim is brought. In the Employment Tribunal, most claims are subject to a 3 months less one day limitation period as unlawful deduction from wages. Where commission is treated as a contractual debt, civil court claims generally have a 6-year limitation period. Commission disputes often involve complex issues such as series of deductions, deferred earnings, and redundancy termination timing. ACAS Early Conciliation pauses tribunal time limits, but only if started before expiry.