Johnathan Lee Kui Bao

What happened

The employee was a sales consultant with a company that supplies business equipment, software and related services. She had worked there since 2013 and was still employed when her claim was heard [1]. Her commission was calculated under a sales pay plan introduced in June 2021 [4]. Revenue from a “protected” deal counted 100% towards commission; a “non-protected” deal counted 50%. Both sides understood a deal to be protected where the customer agreed to an early termination clause requiring it to pay the remaining charges if it ended the contract early [9]-[10]. The plan set out these rules in tables broken down by product type: hardware and software, operating lease, services and extensions [7]. It did not define “protected” or “non-protected” [8], nor “deal” [12].

In June 2021 the employee and two colleagues secured a renewal contract with a long-standing customer covering new equipment, software licences, manpower services and print charges [15], [17]. The early termination clause they negotiated covered roughly 60% of the monthly charges. It fully covered the hardware and software components, which the employee had personally negotiated, and part of the services charges (the project management fee), but not the rest of the services charges or the print charges [20], [23].

On 1 October 2021 the employer’s pay plan committee decided to treat the contract as a single deal and to recognise 60% of its revenue for commission [23]. The employee and her department head asked for reconsideration several times. The employer confirmed its decision on 21 October 2021, on 26 October 2021 and again on 13 January 2022 [24]-[26]. The employee then went to her union. Her commission was paid in June 2022. In September 2022 the union met the employer’s managing director, who declined to change the decision. The employee filed a mediation request with TADM on 8 November 2022. Mediation failed and she brought a claim in the Employment Claims Tribunals [27].

The employer said the claim was out of time because its final decision was made on 26 October 2021, more than a year before the mediation request [30]. On the merits, it said a “deal” meant the whole contract, as its long-standing practice showed [12]. The employee said the tables showed commission was worked out by product component, so the fully protected hardware and software components should count at 100% [13].

What the tribunal decided

The time limit. Under s 3 of the Employment Claims Act 2016, a mediation request must be submitted not later than one year after the material facts giving rise to the dispute occurred [29]. The tribunal rejected the argument that the employee did not know what she would be paid until June 2022; the employer’s communications from October 2021 had made that clear [32]. It nonetheless accepted that the short payment could be treated as the starting date. The tribunal can only make the orders listed in s 22(1) of the Act and cannot declare what a contract means, so a claim brought before any underpayment would have been premature. The short payment was the final material fact giving rise to the dispute, and the request filed on 8 November 2022 was in time [33].

The tribunal then gave an alternative ground, noting that the case was unusual because the disagreement arose long before the commission fell due [34]. The pay plan’s own committees had to be read alongside the grievance procedure in the union’s collective agreement, whose highest level of escalation was discussion between the union and the management of the company. Senior managers on the pay plan committees were wearing specific hats and were not “management” in that sense [35]. The employee’s further escalation therefore had a formal legal basis; she was not informally rehashing a closed matter [36]. The tribunal held: “where there exist formal internal mechanisms for employee grievances to be resolved, the material facts do not “give rise” to a “dispute” until those internal mechanisms have been either exhausted or waived.” This is not an indefinite freeze. The mechanism’s own timelines apply, or otherwise a reasonable time [37]. The tribunal relied on the courts’ policy of encouraging alternative dispute resolution, reinforced by Parliament making TADM mediation a prerequisite to an ECT claim [38]-[39]. It was reasonable for the employee to wait until her department head’s reconsideration request was closed on 13 January 2022 before going to the union, and that period alone brought her request within the year [40]. This alternative ground is a first-instance reading of the Act. The published grounds do not record whether the decision has been appealed.

What the pay plan meant. Interpretation is objective. The tribunal treated the executives’ evidence of what they personally understood the plan to mean as evidence of subjective intention, which carries little weight in construing a written plan [42]-[43]. The tables plainly showed that commission was calculated along product lines rather than whole-of-contract lines, and the employer had no real answer to why the plan was written that way if deals were never meant to be split into components [44]. Two contextual points supported the employee. First, her two colleagues had been paid on 60% of all components while she was paid only on the hardware and software components; a plan that already distinguished between staff along component lines could equally recognise that some components of one contract were protected and others not [46]-[47]. That a partial early termination clause was “novel” was irrelevant, because the drafter’s specificity let the plan deal with it objectively [49]-[50]. Second, the 2021 plan introduced the protected distinction to encourage staff to secure such clauses when customers were resisting them, and the tribunal considered that this context lent slightly stronger support to a component-based reading than to an all-or-nothing one [51]-[52]. The tribunal accepted that its reading might not be what management had intended, but that was beside the point. The employer had drafted the plan unilaterally and, as the tribunal put it, “it might be said that, if it had intended otherwise, it had no excuse for its lack of clearer definitions and imprecise drafting” [53].

The “shall prevail” clause. The plan provided that in the event of ambiguity the pay plan committee’s interpretation and decision “shall prevail” [22]. The employer did not expressly argue that this bound the tribunal, but its witnesses relied on it, so the tribunal addressed it [55]. Section 28 of the Act makes any provision void to the extent that it purports to exclude or limit the tribunal’s jurisdiction [56]. The clause could still operate within the employer’s internal processes. “What it could not do was deprive the ECT of the ability to decide a matter falling within its statutory jurisdiction.” [57] To the extent it purported to make the committee’s interpretation conclusive over the tribunal, it was void [58], [65]. The general law pointed the same way: without very clear terms, a court will not readily treat a private adjudicator as having exclusive jurisdiction over questions of law, and interpretation is a question of law [63]. The clause did not say over whom the decision prevailed, the plan was imposed rather than negotiated, and the plan’s own structure placed a commission dispute committee above the pay plan committee [64].

The award. The claim was allowed essentially in full. The sum was corrected by agreement by $9.92, and the employer was ordered to pay $7,030.86 within two weeks [66]. No costs order is recorded.

What this means for employers

• Define the terms that drive commission. The dispute turned on the undefined words “protected”, “non-protected” [8] and “deal” [12]. The employer had free rein to draft the plan and, in the tribunal’s words, it might be said that, if it had intended otherwise, it had no excuse for its imprecise drafting [53].
• Draft the tables the way you operate. Because the plan listed deal types by product line, the tribunal read commission as calculated by product line, and the employer could not explain why the plan was written that way if it meant something else [44]. If you intend a whole-contract test, say so.
• Practice and intention will not rescue unclear words. The tribunal treated the executives’ evidence of what they personally understood the plan to mean as evidence of subjective intention, which carries little weight in construing a written plan [42]-[43]. What management meant was beside the point [53].
• Apply the plan consistently. Paying two colleagues on all components while paying the employee only on hardware and software was strong support for a component-based reading [46]-[47].
• An internal committee cannot be the last word, and its first decision does not start the clock. A “shall prevail” clause is void to the extent it limits the tribunal’s jurisdiction and was read, in context, as governing internal processes only [57]-[58], [64]-[65]. In the tribunal’s view, while formal grievance mechanisms remain open, including under a collective agreement, the one-year period has not begun [37], [40].

What this means for employees

• In this case the one-year limit was counted from the underpayment. The tribunal did not accept that the employee could claim not to know what she would be paid once the decision had been communicated [32]. What saved her was that the short payment could be treated as the final material fact [33]. That is a first-instance reading of section 3 of the Employment Claims Act. If your employer has already told you how it will pay you, do not wait for the payment date: the safest course is to lodge a mediation request at TADM within one year of the employer’s decision.
• Formal grievance channels are not dead time, but use them promptly. The dispute does not arise until formal internal mechanisms are exhausted or waived, but you must follow their timelines or act within a reasonable time [37], [40]. Informally rehashing a closed decision would not count [36].
• The words of the plan matter more than what management says it always meant. The employee succeeded on the text and structure of the tables [13], [44]. Keep a copy of the version that applied to your deal; here no earlier plan was before the tribunal [4].
• A “committee decides” clause does not close the door. It is void to the extent it purports to limit the tribunal’s jurisdiction [57]-[58], [65]. You can claim while remaining in employment, as the employee here did [1]-[2].
• Know the process. Mediation at TADM comes first. Salary-related claims must be lodged within 6 months of leaving, or within 1 year for current employees. The tribunal can award up to $20,000, or $30,000 where mediation was union-assisted or under the Tripartite Mediation Framework, and parties appear without lawyers. Check your figures: the claim here was $9.92 too high [66]. Our guide to TADM and the Employment Claims Tribunals explains each step.

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Frequently asked questions

Does the one-year time limit for an Employment Claims Tribunal claim start from when my employer decided or from when I was actually underpaid?

In [2026] SGECT 4 the tribunal accepted that the clock could be treated as starting on the date of short payment rather than on the date of the employer’s internal decision eight months earlier [33]. The tribunal can only make the orders listed in s 22(1) of the Employment Claims Act 2016 and cannot declare what a pay plan means, so a claim lodged before any underpayment would be premature. This is a first-instance decision. Do not use it to delay. In this case the tribunal did not accept that the employee was unaware of how she would be paid once the employer had told her [32].

If I use my company’s internal appeal or union grievance process, does that stop the time limit for an ECT claim from running?

The tribunal’s view, given as an alternative ground, was that where formal internal grievance mechanisms exist, the material facts do not give rise to a dispute until those mechanisms are exhausted or waived [37]. That covered a pay plan appeal committee and the grievance procedure in a union collective agreement [35]-[36]. It is not an indefinite freeze: follow the mechanism’s timelines or act within a reasonable time [37], [40]. The published grounds do not record whether the decision has been appealed. The safer course is to file at TADM within one year of the employer’s decision, and in any event within one year of the underpayment.

My employer says its pay plan committee’s decision on commission is final. Can I still go to the Employment Claims Tribunal?

Yes. Section 28 of the Employment Claims Act 2016 makes any provision void to the extent it purports to exclude or limit the tribunal’s jurisdiction [56]. In [2026] SGECT 4 a clause stating that the pay plan committee’s interpretation “shall prevail” was held to operate only within the company and, so far as it purported to bind the tribunal, to be void [57]-[58], [65]. The tribunal decided for itself what the plan meant. Use the internal appeal, because it may affect timing, but it cannot keep the dispute out of the tribunal.

Can my employer rely on long-standing practice to interpret my commission plan against me?

Not where the words of the plan point the other way. Interpretation is objective. The tribunal treated the executives’ evidence of what they personally understood the plan to mean as evidence of subjective intention, which carries little weight in construing a written plan [42]-[43]. Context that is clear, obvious and known to both parties can be considered [43]. Here the structure of the tables, the way colleagues were paid and the purpose of the plan all supported the employee’s reading [44], [47], [52]. The employer’s unexpressed intention was beside the point [53].

This decision is one of several 2026 Employment Claims Tribunals decisions discussed in Unpaid Salary, Overtime, Commission and Deductions: The 2026 ECT Decisions Employers and Employees Should Know.

This article is for general information only and is not legal advice. It discusses a decision of the Employment Claims Tribunals as reported at the citation given; the parties are anonymised in the published grounds and are referred to here only as the employee and the employer. The law stated is as at September 2026.