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Commission Based Employment Agreement for Philippines

Commission Based Employment Agreement Template for Philippines

This document is a comprehensive employment agreement tailored for commission-based employees in the Philippines, structured to comply with Philippine Labor Code requirements and relevant employment regulations. It outlines the terms of commission-based compensation, including calculation methods, payment schedules, and performance metrics, while incorporating mandatory benefits and protections required under Philippine law. The agreement balances employer interests in sales performance and employee interests in fair compensation, providing clear frameworks for commission structures, targets, and employment terms.

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What is a Commission Based Employment Agreement?

The Commission Based Employment Agreement is essential for businesses operating in the Philippines that compensate employees partly or wholly through commission-based structures. This document is particularly relevant when engaging sales professionals, real estate agents, insurance agents, and similar roles where compensation is tied to performance or sales achievements. It ensures compliance with Philippine labor laws, including the Labor Code and relevant DOLE regulations, while establishing clear parameters for commission calculation, payment terms, and performance expectations. The agreement includes mandatory provisions for statutory benefits, working conditions, and employee protections required under Philippine law, making it suitable for both local companies and multinational corporations operating in the Philippines.

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

1. Parties: Identification of the employer and employee, including complete legal names and addresses

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

3. Definitions: Key terms used throughout the agreement, including 'Commission', 'Sales', 'Targets', and other relevant terminology

4. Appointment and Term: Nature of employment, position title, and duration (if fixed-term)

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

6. Commission Structure: Basic framework of commission calculation, payment periods, and conditions for earning commission

7. Base Salary and Benefits: Any fixed compensation component and mandatory benefits under Philippine law

8. Working Hours and Location: Expected working schedule, flexibility provisions, and primary work location

9. Statutory Benefits: SSS, PhilHealth, Pag-IBIG, and other mandatory benefits under Philippine law

10. Confidentiality: Protection of company information and trade secrets

11. Non-Competition and Non-Solicitation: Restrictions on competitive activities during and after employment

12. Termination: Grounds for termination, notice periods, and consequences

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

14. General Provisions: Standard clauses including amendments, severability, and entire agreement

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

1. Probationary Period: Include when the position is subject to an initial probationary period of up to 6 months

2. Training and Development: Include when specific training requirements or professional development opportunities are provided

3. Company Property: Include when employee is provided with significant company assets or equipment

4. Remote Work Provisions: Include when role allows for remote working arrangements

5. Intellectual Property: Include when employee may create IP in course of employment

6. Travel Requirements: Include when position requires regular travel and expense reimbursement

7. Team Management: Include when employee has supervisory responsibilities

8. Data Protection: Include when role involves handling personal or sensitive data

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

1. Schedule A - Commission Rates and Calculations: Detailed breakdown of commission percentages, tiers, and calculation methodologies

2. Schedule B - Sales Targets and Quotas: Specific performance targets and minimum requirements for commission eligibility

3. Schedule C - Territory or Account Assignments: Defined sales territory or allocated customer accounts

4. Schedule D - Benefit Details: Detailed description of additional benefits and their computation

5. Schedule E - KPIs and Performance Metrics: Specific performance indicators used for evaluation

6. Appendix 1 - Commission Payment Examples: Sample calculations showing how commission is computed in various scenarios

7. Appendix 2 - Expense Policy: Guidelines for business expense claims and reimbursement procedures

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok成人版 | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Philippines

Sector

Sales

Cost

Free to use

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