Contract For Commission Based Employment for the United Kingdom

Contract For Commission Based Employment Template for England and Wales

A Contract for Commission Based Employment is a legally binding agreement under English and Welsh law that establishes an employment relationship where compensation is partially or wholly based on commission earnings. This document outlines the terms of employment, commission structure, performance expectations, and other essential conditions of employment. It ensures compliance with UK employment legislation while protecting both employer and employee interests in commission-based work arrangements.

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What is a Contract For Commission Based Employment?

The Contract For Commission Based Employment is designed for use in England and Wales when establishing employment relationships where remuneration is significantly tied to sales performance or other measurable outcomes. This document is essential for businesses operating in sales-driven environments, providing clear guidelines on commission calculations, payment terms, and performance expectations. It ensures compliance with UK employment law while protecting both parties' interests and establishing transparent compensation structures. The contract addresses key aspects such as basic salary (if any), commission rates, payment schedules, and performance targets, while incorporating necessary employment protections and obligations.

What sections should be included in a Contract For Commission Based Employment?

1. Parties: Identification of employer and employee with full legal names and addresses

2. Background: Context of the employment relationship and purpose of the agreement

3. Definitions: Key terms used throughout the agreement

4. Appointment and Duration: Terms of employment, start date, and contract duration

5. Duties and Responsibilities: Detailed description of role and expectations

6. Commission Structure: Detailed explanation of commission calculation and payment terms

7. Basic Salary and Benefits: Any fixed salary component and additional benefits

8. Working Hours: Expected working hours and flexibility arrangements

9. Holiday Entitlement: Annual leave allowance and calculation of holiday pay

10. Termination Provisions: Notice periods and grounds for termination

What sections are optional to include in a Contract For Commission Based Employment?

1. Remote Working: Terms for remote work arrangements when permitted by the employer

2. Company Car: Terms of company vehicle provision and usage conditions

3. International Travel: Terms and conditions for international business travel requirements

4. Non-Compete Clause: Restrictions on post-employment competition for senior sales roles or sensitive client relationships

What schedules should be included in a Contract For Commission Based Employment?

1. Schedule 1: Commission Calculation Examples: Detailed examples of how commission will be calculated in various scenarios

2. Schedule 2: Sales Targets: Specific sales targets and related commission thresholds

3. Schedule 3: Benefits Package: Detailed breakdown of additional benefits

4. Appendix A: Company Policies: Reference to relevant company policies

5. Appendix B: Territory/Client List: Definition of sales territory or allocated client base

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

England and Wales

Publisher

Genie AI

Cost

Free to use
Clauses
Industries

Employment Rights Act 1996: Primary legislation governing employment rights in England and Wales, covering fundamental aspects of the employment relationship including contracts, unfair dismissal, and statutory rights

Equality Act 2010: Legislation protecting against workplace discrimination and promoting equality across protected characteristics

National Minimum Wage Act 1998: Ensures commission-based employees still receive at least the national minimum wage for their work hours

Working Time Regulations 1998: Governs maximum working hours, rest breaks, and holiday entitlements for employees

Agency Workers Regulations 2010: Protects rights of agency workers and may be relevant for certain commission-based employment structures

Commercial Agents Regulations 1993: Specific regulations governing relationships with commercial agents, particularly relevant for commission-based sales roles

Pensions Act 2008: Requires employers to automatically enroll eligible workers into a pension scheme and make contributions

Income Tax (Earnings and Pensions) Act 2003: Governs taxation of employment income, including commission payments

National Insurance Contributions Act 2014: Regulates National Insurance contributions on employment earnings including commission

UK GDPR: Post-Brexit data protection regulation governing how employee personal data must be handled

Data Protection Act 2018: UK's implementation of data protection standards, working alongside UK GDPR

Health and Safety at Work Act 1974: Primary legislation ensuring workplace safety and health standards

Management of Health and Safety at Work Regulations 1999: Detailed regulations on how to manage workplace health and safety

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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