Contract of Employment/Director's Service Agreements

Starting a new job is usually an exciting time but new employees often do not properly consider the Contract of Employment or Director’s Service Agreement that they are asked to sign by their new employer.

Our employment law solicitors are used to drafting and advising on such documents and are all able to highlight the implications of accepting a contract presented to you.

By accepting the terms, you are entering into a legally binding contract and often included in such agreements are clauses that may not be in your favour. Some specific examples include:

Notice to terminate

The notice period on which your employment can be terminated is a very important term of the contract. On the one hand, if the employer terminates, you will need a sufficient amount of time to find new employment. Conversely, if you decide to leave and want to be released to take up new employment you may not want to be tied into a long notice period. We can advise on the options and assist you with any negotiations.

Restrictive Covenants

Restrictive Covenants are terms in a contract that prevent a departing employee from, for example, going to work for a competitor or from seeking or accepting work from a client or customer of their former employer. If you are working in a senior, account management or sales type role these types of clauses are common and it is important you understand the implication of the restrictions before you sign the Contract. It is a common misconception that such clauses are unenforceable. In reality the Courts will enforce Restrictive Covenants provided they provide no more than adequate protection of your employer’s business interests.

Bonuses

If you have been offered a guaranteed bonus or some form of commission terms, then you need to ensure that that is properly reflected within the Contract so that there is no room for the employer to avoid paying the bonus or commission.

Inventions (and other intellectual property rights)

A contract of employment may provide that any IP rights created by the employee belong to the employer. Whilst this will be reasonable where such IP rights are created as part of your employment duties for that employer, care should be taken to ensure the clause is not drafted too widely. For example, if you have secondary employment or interests outside of the employment covered by the contract then you will want to ensure that, where appropriate, you are not giving away IP rights arising outside of your employment duties. For example, what if you engage in activities outside the workplace that are unrelated to your work (e.g. music, design, IT work). You will want to ensure that those aspects remain your property and not your employer’s.

Sickness (and other benefits)

Is there sufficient protection in relation to sickness payments, as well as any other benefits that you may have been offered? You might be able to negotiate or secure additional payments to cover sickness to ensure you have as much protection as possible.