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Contract For Commission Based Employment Template for Philippines

This document establishes a commission-based employment relationship under Philippine labor law, outlining the terms and conditions of employment where compensation is primarily or partially based on commissions earned. The agreement complies with Philippine Labor Code requirements, including provisions for statutory benefits, minimum wage guarantees, and worker protections. It details commission structures, performance expectations, payment terms, and includes mandatory employment provisions while protecting both employer and employee interests in a commission-based arrangement.

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What is a Contract For Commission Based Employment?

The Contract For Commission Based Employment is designed for businesses operating in the Philippines that wish to engage employees on a commission-based compensation structure. This agreement is particularly relevant for sales-oriented positions and industries where performance-based pay is standard practice. The document ensures compliance with Philippine labor laws, including the Labor Code and various employment regulations, while establishing clear terms for commission calculations, payment schedules, and performance expectations. It includes mandatory provisions for employee benefits, working conditions, and statutory protections, making it suitable for both full-time and part-time commission-based roles. This contract type is commonly used in retail, real estate, financial services, and similar sectors where sales performance directly influences compensation.

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

1. Parties: Identifies and defines the employer and employee with complete legal names and addresses

2. Background: Explains the context of the employment relationship and the employer's business

3. Definitions: Defines key terms used throughout the agreement, including commission-related terminology

4. Appointment and Duration: Specifies the position, employment status, and term of employment (fixed or indefinite)

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

6. Commission Structure: Defines the commission rates, calculation methods, and payment terms

7. Minimum Guarantees: Specifies any guaranteed minimum earnings in compliance with Philippine minimum wage laws

8. Payment Terms: Details payment frequency, method, and timing of commission payments

9. Statutory Benefits: Outlines mandatory benefits under Philippine law (SSS, PhilHealth, Pag-IBIG)

10. Working Hours: Defines expected working hours and schedule flexibility

11. Confidentiality: Protects company's confidential information and trade secrets

12. Non-Competition: Restricts employee's ability to compete during employment

13. Termination: Specifies grounds and procedures for contract termination

14. Governing Law: Establishes Philippine law as governing law and jurisdiction

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

1. Probationary Period: Include when the employer wishes to implement an initial probationary period (up to 6 months under Philippine law)

2. Performance Metrics: Include when specific KPIs or targets need to be met to earn commissions

3. Territory Assignment: Include for sales roles with specific geographic or account assignments

4. Expense Reimbursement: Include if the role requires travel or business expense coverage

5. Remote Work Provisions: Include if the position allows for remote work arrangements

6. Non-Solicitation: Include to prevent poaching of clients or employees post-employment

7. Training Requirements: Include if specific training or certifications are required

8. Company Property: Include if employee will be provided with company equipment or resources

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

1. Schedule A - Commission Rates: Detailed breakdown of commission rates, tiers, and calculation methods

2. Schedule B - Performance Targets: Specific sales targets or performance metrics that affect commission earnings

3. Schedule C - Territory Map: Geographic or account territory assignments if applicable

4. Schedule D - Benefits Summary: Summary of all benefits including both statutory and additional benefits

5. Appendix 1 - Code of Conduct: Company's code of conduct and ethical guidelines

6. Appendix 2 - Expense Policy: Company's policy on business expense reimbursement if applicable

Authors

Alex Denne

Advisor @ GenieAI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Philippines

Publisher

GenieAI

Cost

Free to use

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