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.
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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
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
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
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