# Regulatory Compliance Category > Labour Relations and Legislation Forum >  What recourse for Freelance sales person not paid earned commission

## Versatile Marketing

Good day all? Could someone please tell me are the rights of a freelance ( informally appointed) salesperson protected in any way by the labor act? 

I conduct, through three small business entities that belong to me, freelance marketing, sales and sales staff training for several small businesses. I recently secured the informal arrangement to conduct this service for a micro lender in my area. through referral  this became  two and then three. We entered into an informal co operation agreement that I would market their products and provide them with sales leads  which they would process and in return for this service they were prepared to pay me a percentage of their commission ( rate varied between 40% and 50%)when the loans were paid out to the clients.  
 Because I intercept all the introductory  response from the prospects I know that these credit suppliers/loan originators are still prepossessing the leads I gave them and from a mini market survey I conducted I ascertained  that some of the clients have already been paid out the loaned money. My client has, without giving any  reason, opted to not pay the I commission earned and has now stopped responding to any correspondence... and not taking my calls. 
Being new and not knowing all the members fields of expertise I request leniency for possibly traversing several areas with this post. Besides civil action can any of you advise me on how to proceed with this matter? tell me how this matter would be looked upon by say the CCMA , NCR or fraud authorities. Thanks and have a good day

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## Dave A

Do you have any form of contract, memorandum of understanding, minutes of meetings..?

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## Versatile Marketing

Hi Dave, Thanks for your response,

None of the above only! e-mail correspondence!

david

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## Dave A

Email correspondence is still evidence of the nature of the relationship. Was it a "commission only" deal?

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## sterne.law@gmail.com

> Good day all? Could someone please tell me are the rights of a freelance ( informally appointed) salesperson protected in any way by the labor act? 
> 
> I conduct, through three small business entities that belong to me, freelance marketing, sales and sales staff training for several small businesses. I recently secured the informal arrangement to conduct this service for a micro lender in my area. through referral  this became  two and then three. We entered into an informal co operation agreement that I would market their products and provide them with sales leads  which they would process and in return for this service they were prepared to pay me a percentage of their commission ( rate varied between 40% and 50%)when the loans were paid out to the clients.  
>  Because I intercept all the introductory  response from the prospects I know that these credit suppliers/loan originators are still prepossessing the leads I gave them and from a mini market survey I conducted I ascertained  that some of the clients have already been paid out the loaned money. My client has, without giving any  reason, opted to not pay the I commission earned and has now stopped responding to any correspondence... and not taking my calls. 
> Being new and not knowing all the members fields of expertise I request leniency for possibly traversing several areas with this post. Besides civil action can any of you advise me on how to proceed with this matter? tell me how this matter would be looked upon by say the CCMA , NCR or fraud authorities. Thanks and have a good day


First things - the NCR wont get you any money. They might however get some REVENGE for you, if the lender is not acting within the law. This I do not believe is your intention.
Fraud - would be a criminal matter and also will not get you any money, and being a criminal the proof must be beyond unreasonable doubt. Again, seeing as your main aim is to get your money, this is probably not the route, although as a veiled threat MAY be successful(unlikely)

Now to the CCMA or labour issue - There is a code or guideline as to when a person is an employee or when they are a sub or independent contractor. You would need to show that you are an employee before you could argue a matter under the ccma jurisdiction. A few things that differentiate between employee and contractor would be -
The control test - a contractor works on their own time and is not under the direct cotrol of the employer. the employee on the other hand takes orders and their time is controlled by the employee. Even where the employee/contractor is made to attend a weekly meeting this could be construed as control(a number of estate agents have been deemed employees because of this)
Financial independence - an employee is predominantly reliant on the employer for income where as the independent has various forms of income.
An employee must perform the work themselves where as a contractor can get or send anyone to do the work.
These are the main issues - where any ONE of them exists you are presumed an employee and the respondent must prove otherwise.
As per Dave, the email correspondence would be critical as to the intent and nature of the relationship. The employee route would be the cheapest and quickest, if you can show that you are an employee, which sounds unlikely based on what you have posted.
A civil claim, like a labour dispute, requires only showing on a  balance of probabilities, that your story is true or more likely, but is costly. The alternative option is the small claims court wher eyou could get upto R8000.
Hope thsi helps.

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Dave A (08-Jan-10)

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## Versatile Marketing

Hi Thanks for your response ... My arrangement is on a purely commission remuneration basis. I was initially commissioned to develop their sales and marketing strategy and train their sales people as a service to be invoiced for. It was then seen that it would benefit them in the interim to have me conduct some freelance sales for them. In the space of approx i month I submitted in excess of 150 prospective clients. having now been exposed to my sales and marketing techniques they promptly began using them and stopped providing me with progress feedback and then stopped paying me the commission due to me. Not only did I assist with their market development   I practically restructured their loss control strrategy.

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## sterne.law@gmail.com

> Hi Thanks for your response ... My arrangement is on a purely commission remuneration basis. I was initially commissioned to develop their sales and marketing strategy and train their sales people as a service to be invoiced for. It was then seen that it would benefit them in the interim to have me conduct some freelance sales for them. In the space of approx i month I submitted in excess of 150 prospective clients. having now been exposed to my sales and marketing techniques they promptly began using them and stopped providing me with progress feedback and then stopped paying me the commission due to me. Not only did I assist with their market development   I practically restructured their loss control strrategy.


Returning to the contractor vs employee issue - Do you have other clients  or is this your sole client? Your claim via employee route will backfire on the issue of using your systems etc,etc. if you want to say you are an employee to be able to follow the CCMA route in order to get your money, the company can argue that the systems etc,etc are now their property, even if developed in your own time prior to employ. 
Your need is a) to get your money rightfully owed   b) to stop them using your systems..    The money owed could probably be gained via a lawyers letter but stopping the use of the systems will be tougher and will require a court order.  Perhaps approaching their competitor might be an idea.(This time with some safeguards) Perhaps the cherry of not going to their competitors will prompt them to pay. I presume you have the contact details of the 150 or so that became clients. As most people who use micro lenders tend to roll over the loans, a competitor offering better rates etc, would be able to entice them away.

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## jinxster

With the legal expert reading to advise you wether it is a bad idea or not, 

It seems like if there is any sort of contract for you to uphold your end, eg sending them sales for money, they breached the contract first.

That means, you still have the client list dont you? Why not simply sell that off to another company who may be able to service those customers.

Someone else may want some extra sales and wont mind paying your commissions.

What type of products / services was it?

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## Dave A

> What type of products / services was it?


Micro loans.

Feels a bit like passing a cocaine addict onto the next dealer because the last one didn't give you your cut. You have to wonder who's kneecaps are going to get broken first.

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## Versatile Marketing

I like your analogy... But the issue here is the comm should have been paid on completion of the personal loan applications being approved and paid out... the credit originator is then in possession of the comm  leaving only for them to pay me my share... this is where the greed, poor financial management, skullduggery comes in and where they are required to take an ethical decision to hand over my comm the system falls down!!! having provided them with 100 qualified prospects wanting a R20 000 loan and given a probable 60% approval rate a comm of 5% I am out of pocket by R60k
plus my marketing, communications costs and my time...

thanks again for your input

david

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## Versatile Marketing

In this instance The product I sold was qualified prospective personal loan clients. 
see answer below to balance of your question... thank you for your valued input...

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## Dave A

I've heard micro-lenders can be a pretty tough crowd.  :Stick Out Tongue: 

If it's any consolation, it could be worse. Check out this dodgy second hand car dealer story.

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## Snuggles

I was a consultant for a company with contract commission based... my husband is a manager at on of  the branches . He was called in for a disciplinary hearing and we where accused of theft  and fraud.  This company  refuses to pay me because of stock loses. We have not committed fraud or steal, I feel that is even besides the point. Has this company the right to refuse to pay me??

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