Fast FAQs

We are planning to recruit our first travelling salesperson. What legal points should we consider?

Your sales people can make or break your business, and they can be particularly volatile, so it is worth putting some thought into this.

• You need to establish what your sales person's duties will be. In particular, are you expecting him (or her) to concentrate on maximising sales, or do you want him to spend time and effort on developing your market? Who does he report to? And when?
• What powers are you going to give him? To what extent can he negotiate over price? How big are the deals he can commit you to? What sort of expenses are you willing for him to incur?
• Do you want to use him on an employed or self-employed basis (see question 2)?
• If you are going to use him on a self-employed basis, what sort of restrictions (if any) are you going to place on his right to sell competing products or do business for rival firms?
• Do you want to pay him on salary (or retainer), or on commission, or a mixture of the two?
• What sort of benefits are you willing to provide - for example, by way of a company car?
• Where do you expect him to be based?
• Are you going to start off with a trial period, and if so, for how long?
• What restrictions (if any) will you attempt to place on him when he leaves? If you want to introduce restraint of trade clauses, you must note them in writing, under the Commercial Agents Regulations. Are they limited in area, time etc, as required under these regulations?

You need a reasonably clear statement of expectations in case things go wrong, particularly as sales people tend to get the kind of money that makes breach of contract a much more likely recourse than a claim for unfair dismissal. On the other hand, the more precisely you specify these matters, the more you tie your own hands. This really is an area in which you should take legal advice.

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