What is an Executive Employment Agreement?
An Executive Employment Agreement is a contract which is used to document your employment arrangement with an executive joining your company.
The main purposes of this contract are to:
🔸 cover the terms and conditions of employment
🔸 provide clarity to both the employer and employee about their rights and obligations
🔸 facilitate executive performance (including KPIs to encourage improved or higher performance)
🔸 protect the legal interests of both parties, particularly in the termination of employment
Who can use this template?
- Companies looking to hire an executive
- Senior Managers
What does this Executive Employment Agreement template include?
Our Executive Employment Agreement template covers all of the important terms you need:
- Employment – employment agreement
- Duties – title, compliance with policy and procedures, full time appointment
- Remuneration – salary, bonuses, superannuation and expenses
- Leave Entitlements – entitlements for annual leave, personal/carers’ leave and other leave types
- Confidentiality – to protect confidential information belonging to the business
- Intellectual Property – to protect intellectual property
- Conflict of Interest – to prevent conflicts
- Termination – how either party can terminate the agreement, including notice period
- Restraint of trade – restraint clause to protect your business interests
- Dispute Resolution – process to deal with disputes
- Job Description – schedule with all key details for the job description
What is an executive employee?
An executive empoyee is anyone hired in a senior position at your company. This includes Directors, CEOs, CFOs, CIOs, General Managers and Senior Managers.
They generally have more responsibility and accountability than normal employees, and are responsible for managing a team or business function.
Do I need an Executive Employment Agreement contract?
Yes, absolutely! A contract protects both the employer and employee.
An employment contract will help to set the ground rules in black and white so everyone is clear on their obligations and how everything will work. You need a proper written contract to enforce your rights and make sure your business is legally protected in case something goes wrong.
Does this Executive Employment Agreement contract include a restraint clause?
Yes, it does.
A restraint of trade clause helps to protect your business interests. It prevents the ex-employee from soliciting or approaching your employees, contractors, clients and customers after they have ceased employment with your company.
Keep in mind that restraints of trade are only enforceable if you can prove that the restraint is necessary to protect your legitimate interests. This may not be the case if the restraint runs for an excessive period of time, covers a geographical area that is too broad, or extends beyond the industry in which you primarily operate.
Negotiating an Executive Employment agreement
It’s very common for executives to negotiate the terms of a contract before they accept a new role. Don’t be surprised if you receive a request to make some changes to the terms of the Employment Agreement.
As a company, you can make a commercial decision about any changes you will accept or not accept.
Common items which can be negotiated include:
🔹 Remuneration – including annual salary, bonuses and other entitlements
🔹 Leave entitlements – including annual leave, long service leave and parental leave
🔹 Notice period – required notice period for the employer or employee before terminating the agreement
🔹 Restraint of Trade – length of time, geographical area, any exemptions etc
🔹 Key Performance Indicators – any targets or KPIs which are set, and how they affect commissions or bonuses
🔹 Termination Payments – including share options or lump sum amounts
Other names for an Executive Employment Agreement
- Executive Employment Contract
- Senior Executive Employment Agreement
- Directors Employment Agreement
- Executive Director Employment Agreement
- CEO Employment Agreement
We recommend that you consult the Fair Work website to read up on the National Employment Standards (NES) before you use this template.
Senior managers and executives are unlikely to be covered by any award or enterprise agreement, but they are still covered by the National Employment Standards.
These 10 standards relate to maximum hours of work, annual leave, personal leave, parental leave, flexible working arrangements, community service leave, long service leave, public holidays, notice/redundancy and the requirement that you be given a Fair Work Information Statement.
You can view a handy guide to hiring new employees HERE
Is my employee covered by an Award?
Awards apply to employers and employees depending on the industry they work in and the type of job worked. Every award has information about who it covers in the coverage clause (usually clause 4) and the job classifications (usually in the pay clause or a schedule).
There are more than 100 industry or occupation awards that cover most people who work in Australia. An employer can be covered by more than one award depending on the jobs the employees do.
You can use the Find My Award tool to check for award coverage on the Fair Work website. As stated above, it’s likely that executives will be “award-free”.
If you are unsure about the status of an employee, you should seek legal advice.
Is this Executive Employment Agreement template legally binding?
All of our templates have been drafted by qualified Australian lawyers who hold an Australian legal practicing certificate.
We are affiliated with a commercial law firm based in Sydney.