Can a company policy rewrite your pay? Akmeemana v Murray says: not so fast

Commission plans and “policies” change all the time. But can an employer use a new policy to claw back commission you’ve already earned—or to rewrite the deal you signed up to? In Akmeemana v Murray [2009] NSWSC 979; 190 IR 66, the New South Wales Supreme Court drew a hard line.

The short version

• Facts: A consultant’s contract set a base salary plus commission, with the commission formula written into the contract. The contract said future changes would be added as an appendix “after being agreed and signed by both parties.” Four months before the employee left, the employer rolled out a new policy letting it withhold commissions, then used it to keep $50,000.

• Issue: Can an employer rely on a policy—introduced mid-stream—to substantially change the pay terms of an existing contract?

• Decision: No. The policy change altered a fundamental term (remuneration). The employee never agreed to it, and the employer couldn’t use a policy power to vary contractual pay terms. The consultant was entitled to the commission.

  
  

Why the court said “no”

• Contracts beat policies. Policies can guide day-to-day operations, but they don’t override contractual terms, especially on core items like pay and commission.

• Variation needs agreement. Where a contract requires signed agreement for changes, the employer can’t sidestep that with a unilateral policy.

• Remuneration is fundamental. Cutting or withholding commission is not a “procedural tweak”—it goes to the heart of the bargain.

  
  

What this means in practice

For employers

• Don’t “vary by policy.” If a change touches pay, commission, bonuses, or core duties, do a formal contract variation.

• Follow the paper trail your contract requires. If it says changes must be agreed and signed, get the signature.

• Use clear policy disclaimers—but know their limits. A policy that “is not contractual” can’t be used to change contractual remuneration terms.

• Prospective, not retrospective. Apply new commission structures going forward and preserve accrued rights under the old plan.

• Consult and document. Explain the business case, offer transitions, and record consent (wet ink or e-signature).

Can a company policy rewrite your pay? Akmeemana v Murray says: not so fast

For employees

• Check the contract first. If your commission formula is in the contract, a later policy can’t wipe it without your agreement.

• Accrued entitlements matter. Commission earned under the old rules is generally payable, even if a new policy arrives.

• Act quickly. Raise it in writing, point to the variation clause, and keep records of targets hit and deals closed.

  
  

Drafting tips (steal these)

Good (variation) clause:

Any change to remuneration, including commission structure, must be set out in a written variation and signed by both parties. Changes apply prospectively and do not affect commission accrued under prior terms.

Commission plan note:

The Commission Plan forms part of this contract only to the extent expressly incorporated. Policies and guidelines do not vary the terms of this contract unless documented as a signed variation.

(Even with a “we may vary from time to time” sentence, you can’t unilaterally cut pay without agreement—build a process that secures consent.)

Change checklist for HR

1. Map what’s changing (rates, thresholds, clawbacks).

2. Identify who is affected and any accrued commission.

3. Prepare a written variation + summary FAQ.

4. Consult, answer questions, and get signatures.

5. Start the new plan on a clear future date and close out all old-plan commissions.

   
   

The bottom line

Akmeemana v Murray is a crisp reminder: you can’t use a policy update to rewrite a pay deal that’s been contracted—especially commission. If the contract says changes need agreement in writing, that’s the path you must take.