Discounts

[John M Carter]

A friend of mine is a self employed Taxi Driver, but is tied to a company where he pays a rental for the radio (22% of his total takings less account work), most of the drivers at this company operate in the same way. My friend has an query which unfortunately I don't know the answer to.

The company supplies work to the drivers both as Cash and Account work, the company is reimbursed on its Account work direct from its customers and the drivers only act as "agents" for the company. The company offers discount to its customers to secure the accounts. My friend has told me that the company pass this discount down to the drivers so that the company does not lose out. he wants to know whether the company is acting illegally by offering discounts without the drivers approval.

As far as I am aware the company operates the following policy for rental payment



Cash = 780
Acc.= 220

Total 1000
Rent 22% = 220

Rent to pay = 0

Company will receive the rent via the customers


Assuming that the discount has not been applied to the above


Cash = 780
Acc.= 220
discount 10% = 22

Acc.= 198

Total = 978

Rent 22% = 215.16

Rent to pay = 215.16 -198.00 = 17.16


The company would lose 4.84 whereas the drivers would be losing 17.16

[Merlion ABS]

Ah took me a while to understand it, basically the company is self invoicing, whereby they tell the driver what is he is getting paid for the account work and not the driver invoicing the company for work done.

As long as both parties agree to this self invoicing procedure then fair enough and all is well, but if the driver wasnt aware they would be discounting the work either form day one or there was a possibility of it then surely the contract whether written or by action that is formed between the two parties needs to be looked at.

This would be an area for a specialist solicitor if the driver wanted to take it further.

In simple terms, if you ignore the discount element of it all, he is just being paid less for the same work.