Agreement silent on issue

Court resolution in favour of the employee
|Canadian Employment Law Today

Mark Schacter was the director of group and incentive sales at Uniworld Travel & Tours Inc. from March 1995 until July 1999 when he left with no notice. Prior to his departure, Mr. Schacter received advances against commission earnings. After his departure, Uniworld commenced an action against Mr. Schacter for the return of these advances as well as car and cellphone allowances and personal expenses paid on his behalf.

Mr. Schacter’s employment agreement provided that Uniworld would pay him a monthly advance of $3,000 against commissions earned. The actual commissions earned were calculated monthly and adjusted against the advance. In defending the claim against him, Mr. Schacter argued that the monthly advance was in fact a guaranteed minimum salary.

The Court did not accept that the advance constituted a minimum salary. Unfortunately the employment agreement between the parties did not provide for the possibility of earning commissions less than the agreed advances on average. Nor did it provide for repayment of amounts advanced in the event of Mr. Schacter leaving Uniworld while his commission earnings were less than the advances he had received.