The Sales Employment Contract serves as a legally binding agreement between an employer and a sales professional in India, establishing the framework for their employment relationship. This document is essential when hiring sales personnel in any organization that requires dedicated sales professionals, whether for B2B or B2C sales activities. It incorporates provisions compliant with Indian employment laws, including the Sales Promotion Employees (Conditions of Service) Act, 1976, and other relevant legislation. The contract addresses crucial aspects such as compensation structure (including base salary and commission), sales territories, targets, reporting requirements, and performance metrics. It's designed to protect both employer and employee interests while providing clear guidelines for the sales role.
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1. Parties: Identification of the employer company and the sales employee with complete details
2. Background: Brief context about the employment relationship and purpose of the agreement
3. Definitions: Key terms used throughout the agreement including 'Territory', 'Products', 'Commissions', etc.
4. Appointment and Term: Details of the position, designation, and duration of employment
5. Duties and Responsibilities: Specific sales responsibilities, targets, and reporting requirements
6. Compensation Structure: Base salary, commission structure, and other financial benefits
7. Working Hours and Location: Standard working hours, travel requirements, and primary work location
8. Leave Entitlement: Annual, sick, and other leave policies as per applicable laws
9. Confidentiality: Protection of company's confidential information and trade secrets
10. Non-Solicitation: Restrictions on soliciting company's customers or employees
11. Performance Review: Process for performance evaluation and sales target assessment
12. Termination: Grounds and process for contract termination by either party
13. Company Policies: Adherence to company policies, code of conduct, and compliance requirements
14. Governing Law: Applicable Indian laws and jurisdiction for dispute resolution
1. Probation Period: Include when the company wants to implement an initial probation period
2. Stock Options: Include when offering employee stock options or similar equity benefits
3. International Travel: Include when role requires frequent international travel
4. Non-Compete: Include when requiring post-employment competition restrictions (note: limited enforceability in India)
5. Remote Working: Include when allowing regular work-from-home arrangements
6. Training Requirements: Include when mandatory training programs are part of employment
7. Relocation Terms: Include when position requires relocation or covers multiple locations
8. Vehicle Allowance: Include when providing company vehicle or travel allowance
1. Schedule 1 - Compensation Details: Detailed breakdown of salary components, commission structures, and calculation methods
2. Schedule 2 - Sales Territory: Defined geographical area or customer segments assigned to the employee
3. Schedule 3 - Product Portfolio: List of products/services the employee is responsible for selling
4. Schedule 4 - Sales Targets: Specific sales targets and KPIs for performance evaluation
5. Schedule 5 - Benefits Package: Details of insurance, medical benefits, and other perks
6. Schedule 6 - Expense Policy: Guidelines for business expense reimbursement and limits
7. Appendix A - Reporting Structure: Organizational hierarchy and reporting relationships
8. Appendix B - Commission Calculator: Detailed examples of commission calculations for different scenarios
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