Director employee service contract

About these documents:
Gone are the days when a director's service contract merely reflected the "deal" for the employment. Today a company is under a statutory obligation to provide written terms of employment to a director, as to any other employee. Of course it is advantageous to both sides to set down the employment package in a contract, rather than in a few words from the company.

These documents have been drawn to provide a balance between protection for the director and for the company. If there is a difference in interests, we have favoured the company.  Some of these provisions are required to comply with the law. The explanatory notes, which come with these documents, will guide you as to the importance of specific issues.

Some directors' employment deals are complicated by company-specific bonus or other schemes. Clearly, we are unable to cover all eventualities that you may dream up. We can however, provide expert advice on your own individual scheme and draft the appropriate provisions. Here is information about our employment law team.

Who will use these documents?

• The board or governing body of a company, hospital trust, charity or other organisation agreeing terms with a new director or changed terms with an existing office holder;
• an individual director wishing to write his own contract in terms which specifically suit him.  

Which to choose:

• EMP051: is suitable for any executive director - that is, any director who actively works full time for the enterprise – is an employee of the enterprise, and who receives remuneration in return. He may be the managing director or any other. 
• EMP052:  a non-executive director is a member of the board of directors of a company who does not form part of the executive management team. He or she is an employee of the company for all legal purposes. 
• EMP055 is suitable for a non-executive director who is self employed. It is important that the terms of work do reflect a self employed status, as otherwise the revenue or a tribunal may decide that the contract is one of employment, even if dressed as one of self employment.  
• EMP061 is suitable for an unpaid, non-executive director of a charity, QUANGO or other organisation. 

Key features:

• protects the board from criticism;
• protects the company from claims both before an Industrial Tribunal and in court;
• protects the director from unreasonable demands;
• provides a "shopping list" of possible director perquisites;
• helps the company to comply with employment regulations;
• includes principal provisions of the Employment Act 2002, effective April 2003;
• provides a complete framework and other legal safeguards;
• written in plain English. 

These documents includes provision for:

• compliance with Working Time Regulations 1998;
• alternative holiday arrangements;
• alternative pension provision;
• all usual perquisites;
• retirement;
• sickness, certification, sick pay;
• arrangements during notice period;
• director's compliance with all stock exchange and similar regulations;
• extensive protection of new intellectual property;
• summary termination and matters after termination;
• confidentiality and data protection;
• clear and comprehensive grievance and disciplinary procedures;
• contracting out of entitlement to redundancy payment and certain other rights on expiry of the fixed term

1. CP101 Shareholders agreement (new or existing company)
2. COM221 Contract for services by self employed person
3. PR002 Lease of lock-up shop
4. PTN001 Partnership agreement

1. CP102 Shareholders agreement (existing company; working directors)
2. CP101 Shareholders agreement (new company; working directors)
3. EMP051 Directors Service Contract
4. EMP055 Non-exec director service contract self employed
5. CP103 Shareholders agreement (new company; working directors plus big lender)
6. CP104 Shareholders Agreement (existing company; working directors plus big lender)