The composition of an employment contract may seem simple. Even though you can find templates for nearly everything on the internet, an employment contract custom-made for a specific company is something worth investing in right from the beginning. A contract made in the beginning of an employment obligates the employer, and the employee primarily does not have an obligation to make another employment contract during the employment. At the latest, when the company is expanding its business, it usually needs to update its employment contract templates. From the very beginning it is necessary for the company to protect its trade secrets and intellectual property rights. If the employee does not accept the new employment contract, the possibilities for the employer to change the terms of the contract unilaterally are very limited.
Managing Directors are an exception to this. The Employment Contracts Act is not applied to Managing Directors and he or she is not therefore an employee with an employment. If an employee of a company is appointed Managing Director, there should be a Managing Director Contract done with him or her, instead of continuing with the old employment contract. Otherwise there might be disagreements in the interpretation of both the terms and the termination of the contract and rights and obligations regarding this.
Therefore, it is important to right from the beginning invest in a good and comprehensive employment agreement template where the post-employment confidentiality obligation and the transferring of intellectual property rights to the employer are taken into account.