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Use this senior employment contract to hire a senior employee or appoint an executive director based in England, Wales or Scotland. This document is GDPR... ... Read more

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How to Make a Senior Employment Contract

  • Summary of a senior employment contract

    Use this senior employment contract to hire a senior employee or appoint an executive director based in England, Wales or Scotland.

    This document is GDPR compliant.

  • What is a senior employment contract?

    A senior employment contract, also known as an executive employment contract, is a contract between a senior employee or director/executive and an employer. It outlines the terms and conditions of employment and covers the required areas of employment contracts as well as relevant provisions for more senior employees. 

    Make sure you are legally compliant when you hire a senior employee or appoint an executive director with this senior employment contract. Every employer is legally required to formally outline the terms and conditions of employment for a new employee. As senior employees and executive directors will likely have more responsibility than your average employee and will be privy to more confidential information, use this document to add extra detail and security.

  • When should I use an executive employment contract?

    Use this executive employment contract or senior employment contract template:

    • for senior employees
    • to appoint an executive director
    • for employees where you want to include more comprehensive employment terms
    • only for employees based in England, Wales or Scotland
  • What is included in a senior employment contract?

    This senior employment contract covers:

    • the duties of the role and how much they can be changed

    • restrictions on outside activities and other work

    • pay, expenses, benefits and bonuses

    • holidays

    • hours of work

    • place of work

    • offices and directorships

    • sickness and injury of employees

    • disciplinary and grievance procedures

    • arrangements for ending employment (including the option to make employment for a fixed-term)

    • payment in lieu of notice and garden leave

    • information required by law about trade unions and any contracting-out certificate for pensions purposes

  • Do I need a senior employment contract?

    You need a senior employment contract when you hire a person for a senior position within your business (eg a company director or an executive).

  • Why is a senior employment contract important?

    Employers are legally required to give all employees (including senior employees) a written statement of particulars on the first day of their employment. This senior employment contract complies with the requirement for a written statement. Employment contracts must be compliant with the relevant laws, including the Employment Rights Act 1996, the Employment Act 2002 and the Equality Act 2010.

  • What are the main differences between a senior employment contract and an employment contract?

    A senior employment contract is more complex than a regular employment contract. This is because a senior employee is more likely to be exposed to confidential information and have more responsibility. This document includes extra clauses which help to protect these interests. These include clauses on:

    Garden leave

    A garden leave clause allows the employer to require the employee to stay at home during their notice period. This helps protect the employer's business by keeping the senior employee out of the office. The purpose is to limit contact with employees and access to confidential information and, therefore, prevent them from working for another employer or setting up a competing business. For more information, read Gardening leave.

    Payment in lieu of notice (PILON)

    A PILON is a payment made by the employer instead of giving the employee their notice period. Employment ends immediately and the payment compensates the employee for what they would have earned during the notice period. A PILON can only be made if the contract allows this or the employee agrees in advance. For more information, read Payments in lieu of notice.

    Post-termination restrictions

    These are contract clauses prohibiting employees from doing a specific thing after their employment ends. For example, they must not join a competitor (non-compete), poach other employees or solicit customers. For more information, read Post-employment restrictions.

    Share options

    These are benefits in the form of a stock option given by a company to an employee to buy shares in the company at a discount or at a stated fixed price. For more information, read Employee share schemes.

    Other employee benefits

    These could include benefits such as a bonus, reimbursement for expenses without advance permission (you can specify the maximum amount in this agreement) or life and health insurance.

  • What should the notice period be for a director or senior employee?

    Notice periods for directors or senior employees range from one month to three months but can be anytime from six up to twelve months. It is up to the employer to decide the notice period, however, is subject to the statutory minimum. It is normal but not compulsory to have a notice period greater than the statutory minimum for senior employees.

  • Can employee data be transferred out of the UK or EEA?

    This document gives you the right to transfer employee data out of the UK or EEA. However, personal data can only be transferred outside of the UK or EEA if there are appropriate safeguards in place. For example, if the organisation receiving the data is certified under an approved certification mechanism. Any such safeguards should be set out in the employer's Data protection policy.

    For more information, read International transfers of personal data

  • Further advice

    Ask a lawyer if:

    • this document doesn't meet your needs

    • you are appointing senior employees or directors of a public company (ie a company whose shares are listed on a stock exchange)

    • you are appointing employees based outside England, Wales or Scotland

    This senior employment contract is governed by the laws of England, Wales and Scotland.

What are some other names for Senior Employment Contract?

Directors service contract, Executive service agreement, Senior employee service agreement, Executive employment contract, Senior service agreement, Director service agreement, Executive employment agreement.

Last reviewed or updated 25/05/2022

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