Sales Manager Employment Contract (Commission Structure)

This Sales Manager Employment Contract (Commission Structure) is intended for sales managers with management responsibility for a particular sales territory where a car or car allowance is part of the benefits package and clauses covering commission and/or bonus structure are required.

This Employment Contract covers the requirements of a Standard Form Section One Statement. This contract complies with these requirements and must be provided to the employee or worker by day one of employment.

Use this contract for a sales manager role with commission or bonus provisions

This version is designed for sales management roles where a car or car allowance is provided and where commission and/or bonus terms are needed.

Restrictive covenants schedule

The contract includes a Schedule of Restrictive Covenants providing enhanced protection for the employer. The restrictive covenants are designed to protect the employer’s legitimate business interests, for example confidential customer information.

Employees are required to show a signed copy of the Restrictive Covenants Schedule to future employers so that prospective employers are fully aware of the contractually agreed limitations on “poaching” customers, transactions and staff.

The Schedule contains three possible restrictive covenants:

• Non-competition
• Non-solicitation of customers
• Non-solicitation of employees

Restrictive covenants must be no wider than is necessary to protect your “legitimate business interests”. Consider each restrictive covenant carefully and remove any that are not relevant to your business and the employee in question. For those remaining, insert time limits and geographical limits that are appropriate and reasonable to the nature of your business. If the schedule is tailored to match the particular employee, it is more likely to be deemed reasonable and therefore more likely to be enforceable.

Benefits, equipment and commission arrangements

The contract also includes provisions relating to:

• Company car or car allowance
• Provision of a laptop and a company credit card
• Commission and bonuses, with references to the employer’s own policies or schemes

For tax issues relating to employee benefits, refer to the HM Revenue & Customs (HMRC) website.

Termination and payment in lieu of notice

This Sales Manager Employment Contract (Commission Structure) includes a payment in lieu of notice (a “PILON”) on termination, rather than having the Manager work out their notice period either at home on garden leave or in the workplace. The payment in lieu clause enables the employer to require the sales manager not to work during their notice period, whilst retaining the validity of employee covenants.

Update note

The Pension Act 2014 introduced a new state pension for people reaching state pension age on or after 6 April 2016, replacing the previous basic state pension and additional state pension and ending contracting out for defined-benefit schemes. This template has been updated accordingly with the removal of the clause referring to the contracting out certificate.

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