EMPLOYMENT AGREEMENTS

Is it recommended to draft a written employment agreement?

 

Yes, although the employment agreement does not have a prescribed form, we recommend that you draft a written employment agreement with all employees. We draft employment agreement templates for our clients. Such templates are tailored to the needs of our client and take into account the company's interests to the extent possible. For example, in the creative industries, we strive to enable the business of our client  by ensuring that the employment agreements provide the widest possible rights to the material created by the employee during the employment relationship. A consistent template facilitates appropriate agreement management and ensures that key terms and conditions are agreed with all employees in a consistent manner. A clearly drafted employment agreement also reduces the risk of disagreement.

 

What is an account on the principal terms and conditions of work?

 

Although the employment agreement has not been made in writing, en employer should remember that the employee has the right to receive a written account of the key terms and conditions of her/his employment relationship. The raccount shall indicate at least:

 

1) the domicile or place of business of the employer and the employee;

2) the time of commencement of employment relationship;

3) the expiry date of the fixed-term employment agreement or its estimated termination period and the justified reason for the fixed-term employment agreement;

4) trial period;

5) the place of employment or, if the employee does not have a principal place of work,  an account on the principles according to which the employee works in different  locations;

6) the employee's principal duties;

7) the possible collective agreement applicable to the employee's work;

8) the bases for determining the salary and other remuneration and the salary payment period;

9) working hours to be observed (in the case of variable working hours agreed at the initiative of the employer, an explanation must also be provided of the circumstances and the extent to which the employer has a need for labor);

10) determination of annual holiday;

11) applicable notice period or the basis for determining it;

12) in work abroad lasting at least one month, the duration of the work, the currency in which the salary is paid, financial compensation and benefits paid abroad, and the conditions for repatriating the employee.

 

What is a manager/director agreement?

 

An agreement is often entered into with a manager/director in a managerial position called a manager or director agreement. In principle, managers other than the Managing Director are employed by the company, in which case mandatory employment legislation applies to such agreement. Exceptions are managers whose position in the employer company is so independent due to ownership or membership of the company, for example, that such duties are not considered work performed under the direction and control of the employer.

 

A manager/ director agreement often differs from a regular employment agreement in relation to the following matters:

 

  • working hours: the manager/director may be excluded from the application of the Working Hours Act due to working hours autonomy. This should be explicitly stated in the employment agreement, as should, for example, the fact that overtime is not compensated separately or that overtime is paid a fixed sum.

  • Remuneration: A manager's/director's salary often consists of a base salary and various incentive bonuses, such as a performance bonus.

  • Travel and representation: the manager's/director's duties often include travel and representation, so it is a good idea to agree on the reimbursement of such expenses separately;

  • non-competion clause, secondary occupations, non-solicitation clauses: the non-competition obligation under the Employment Contracts Act only applies for the duration of the employment relationship. In addition, a non-compete obligation may usually be agreed with the managers/directors for the restriction period in force after the termination of employment relationship. A non-solicitation clause may also be agreed, according to which a director/mananger may not, after the end of her/his employment relationship and for a certain period, recruit employees of her/his former employer to her/his own company, for example.

 

We assist our clients in drafting appropriate employment, manager/director as well as managing director agreements.