Commission Based Employment Contract for Hong Kong

Commission Based Employment Contract Template for Hong Kong

This is a comprehensive employment agreement governed by Hong Kong law, specifically designed for roles where compensation is primarily or partially commission-based. The contract addresses both the standard employment terms required under Hong Kong's Employment Ordinance and the specific commission structure, including calculation methods, payment terms, and performance targets. It incorporates necessary provisions for compliance with Hong Kong's employment legislation while protecting both employer and employee interests in a commission-based arrangement.

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What is a Commission Based Employment Contract?

This Commission Based Employment Contract is essential for businesses operating in Hong Kong that employ individuals on a commission or mixed compensation structure. It is specifically designed to comply with Hong Kong employment law while providing a clear framework for commission-based compensation arrangements. The document is typically used when hiring sales professionals, brokers, or other roles where performance-based pay is a significant component of total compensation. It includes detailed provisions for commission calculation, payment terms, performance targets, and protection of business interests, while ensuring compliance with statutory requirements such as the Minimum Wage Ordinance and Employment Ordinance. The contract is particularly important for establishing clear expectations and avoiding disputes regarding commission payments and employment terms.

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

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

2. Background: Brief context of the employment relationship and purpose of the agreement

3. Definitions: Key terms used throughout the agreement, particularly focusing on commission-related terminology

4. Appointment and Term: Position title, employment status, and duration of employment (fixed-term or continuous)

5. Duties and Responsibilities: Detailed description of the employee's role, reporting structure, and performance expectations

6. Commission Structure: Core commission calculation methodology, payment terms, and conditions for earning commission

7. Base Salary and Benefits: Any fixed salary component and statutory/additional benefits

8. Working Hours and Location: Standard working hours, flexibility requirements, and primary work location

9. Leave Entitlements: Annual leave, sick leave, and other statutory leave requirements

10. Confidentiality: Protection of company confidential information and trade secrets

11. Non-Competition and Non-Solicitation: Post-employment restrictions on competing activities and client solicitation

12. Termination: Notice periods, grounds for termination, and post-termination commission payments

13. Governing Law: Specification of Hong Kong law as governing law and jurisdiction

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

1. Probationary Period: Include when a probationary period applies, specifying different commission terms during probation

2. Overseas Travel: Include when role requires regular travel, detailing travel allowances and policies

3. Team Management: Include for roles with supervisory responsibilities, including team commission structures

4. Intellectual Property: Include when employee may create IP during employment

5. Remote Working: Include when remote work arrangements are permitted

6. Performance Reviews: Include when formal review processes affect commission structures

7. Clawback Provisions: Include when commission payments may need to be returned under specific circumstances

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

1. Schedule 1 - Commission Calculation Methods: Detailed formulas and examples of commission calculations

2. Schedule 2 - Sales Targets and Thresholds: Specific sales targets, minimum thresholds, and corresponding commission rates

3. Schedule 3 - Benefits Package: Detailed description of all benefits, including insurance and MPF arrangements

4. Schedule 4 - Territory/Client Assignment: Definition of sales territory or assigned client accounts

5. Appendix A - Company Policies: Relevant company policies affecting commission-based employees

6. Appendix B - Reporting Requirements: Templates and procedures for sales and commission reporting

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

Hong Kong

Publisher

Genie AI

Document Type

Confirmation Letter

Sector

Sales

Cost

Free to use
Clauses
Relevant Industries

Real Estate

Insurance

Financial Services

Retail

Technology Sales

Advertising

Automotive

Recruitment

Telecommunications

Pharmaceutical Sales

Manufacturing Sales

Professional Services

Relevant Teams

Sales

Business Development

Commercial

Account Management

Channel Partnerships

Retail Operations

Agency Management

Broker Relations

Direct Sales

Field Sales

Relevant Roles

Sales Representative

Business Development Manager

Real Estate Agent

Insurance Broker

Recruitment Consultant

Account Executive

Sales Manager

Commission-based Consultant

Financial Advisor

Sales Director

Territory Manager

Channel Sales Manager

External Agent

Business Development Executive

Industries
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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