Without prejudice letter: Unpaid commission and bonus

[Address]

[Date – current date]

WITHOUT PREJUDICE

Dear Sirs

[Employee] v [Company]

I refer to the draft ET1 employment tribunal proceedings, attached, which set out the basis of a claim for over £30,000. In the interests of a swift resolution, however, [Employee] would be amenable to settling her claim on the above terms: –

• The severance payments referred to in the settlement agreement of [Date the previous month], clause 2, paid gross;

• A bonus for the financial year [year date for the previous financial year], pro rata, that is in relation to 01 December [previous year’s date] – 03 May [this year’s date] inclusive. This should be based on the turnover figures which are circulated regularly. Such figures should be disclosed to us in order to calculate the sum. The percentages are set out in the letter of [Date of a previous letter];

• Severance pay to be paid within 28 days rather than 45 days;

• Restructuring of the settlement agreement so that the severance payments are paid gross as an ex gratia payment and not subjected to tax (we would be happy to discuss this tax structure with you);

• Slight amendments to the reference – removing the last line – and amending the reference clause to state that verbal and questionnaire references are to be refused;

• Increase in legal fees in the compromise agreement from £200 + vat to £500 + VAT.

As you can see, in the spirit of compromise, [Employee] is willing to forgo the production bonus which is due to her, which [Employee] can prove was custom and practice by calling witnesses who have now left your employment.

On a purely commercial basis, [Employee] will accept a pro-rata bonus, as opposed to the full bonus set out in the letter of [Date of the previous letter], which clearly refers to percentages of ‘all yearly net revenue’. Financial year is stated to be between 01 December to 30 November, and therefore ‘all yearly net revenue’ means all net revenue generated between those dates. This is a significant reduction in the claimable amount which is set out in the enclosed particulars of claim.

Because [Company] openly terminated [Employee] contract of employment without regard for any of the contractual disciplinary procedures, you have in effect repudiated the contract of employment – equivalent to tearing up the contract. This means that all of the terms in relation to confidentiality and so on do not currently apply to [Employee].

We aim to keep legal costs to a minimum, and therefore it is in all parties’ interests to either come to a swift resolution or to let a third party decide the matter. Protracted and drawn-out negotiations will only waste everybody’s time. On that basis, if we do not hear from you with a positive response by the close of business tomorrow, the ET1 will be issued without further notice.

Yours faithfully