Pyramid Selling UK

ERAC, has adopted a system of pyramid selling to it's staff. Lets look in to it deeper, as a new group is set up everyone is expected to work for basic salary except if you have been flown over from US or Canada, in which case you are on a guaranteed bonus. All the managers including the GM will be offered high percentages of profit to improve their salaries or take them off guarantee. The next step will be that the business will grow and the first batch on managers and the GM will take home loads of cash(The Rolex Club). As all these mangers move on to bigger groups, corporate, leave or get fired this leaves vacancies. The group will be in a stronger position with more employees fighting for the same jobs. The next batch will be offered smaller percentages and much less money for doing a job which is 10 times harder due to growth, and so the cycle continues. Everyone from ERAC of old will boast about their pay but the next generation feel to ashamed to mention that their pay is poor compared to what they expected. Meanwhile the VP's at the top take home more and more money as employees get paid less and less.This is basic pyramid selling to ERAC employees

Very true and you forgot that if one manager is doing a particular good job and actually making a decent salary they are offered a "new oppertunity" at a dead end branch so a new manager can be brought in on much less commission and more money goes straight to the top. Most rental staff make less the minimum wage if all the hours are taken into account. This is illegal, but watch out erac, you're about to get stung VERY badly.

Also, have you worked out how your going to deduct the cost and awards from legal action from your accounts. Will it be on a per car basis across the group, or just against the individual branch or area the employee worked at ?? Could effect OP quite badly.

What is illegal?

Even if they are doing exactly what you described, it is not illegal. It is not a pyramid scheme....

Here is how a pyramid scheme works. Johnny is recruited by Susie and pays 100 dollars into a pot. In return, Johnny's name is put on a list. Johnny then recruits people, who also pay to get put on a list, and in return he gets some of the money the people he recruits pay in. Basically, you are getting paid to enlist people, who in turn get paid to enlist more people. The reason it is illegal is because eventually someone has to be at the bottom of the list. They pay to get on the list, and there is no one that is going to be under them to pay them.

As long as Enterprise is paying you, and not the other way around, they aren't doing anything illegal. They are doing something really stupid though, considering some of the people I see posting on this site.

Jeahho, I have to agree. There is no difference between what ERAC does in this regard and any other major corporation.