Guide to an offer of new employment terms – what terms should you not sign up to?

If you have been offered a new job or new terms with your existing employer, set out below are five issues to be aware of:

Notice Periods

Consider whether you are happy with the length of notice you will have to give in order to terminate your employment.

It is very important to ensure that the amount of notice your employer is required to give you is the same as the notice you have to give them. Will the notice period give you enough time to find a new role? Typically notice periods vary from 6 to 12 months for senior executives.

It’s also important to be aware that your employer may include the option of placing you on garden leave and also restricting your activities post-termination. It’s vital to consider the effect these provisions would have on your ability to find future work if things don’t work out in the new role and to take advice before signing.

Restrictive Covenants

Do not agree to lengthy restrictive covenants. The courts are generally reluctant to enforce post-termination restrictions of more than 6 months, although this does depend on specific circumstances and seniority.

Try and avoid signing up to any restriction which prevents you from going to work for a competitor after the termination of your employment for a long period and ideally tie this to your notice period.  Any period you are placed on garden leave should be stated to reduce the length of any post termination restrictions.

Employer’s Power to Vary

Check the level of flexibility the employer has to vary the terms of your contract especially in relation to your place of work, hours or work, duties and pay.

The employer may include a provision allowing it to vary the contract on notice and consultation.

Post Covid-19, some employers are inserting powers to furlough, reduce salary or even lay off.  Employees may be minded to push back on the inclusion of such powers on the basis that consent should be sought by the employers at the relevant time, as and when necessary.

Remuneration

Make sure the contract is entirely clear on your remuneration terms (pay, bonus, share schemes and commission) in order to avoid ambiguity on the level and timing of payments once your employment begins.

Ensure that you understand the position in relation to any variable remuneration (your bonus in particular) and what happens if you leave part way through a bonus year.

Other Contractual Documents

If your contract refers to other documents that you have not seen, such as bonus schemes, HR policies and a staff handbook, ensure that you are happy with their contents, as these documents may have contractual force.

If you have been offered a new job or role and have have been presented with a new employment contract to sign we offer a fixed fee review and call to discuss.  Please contact David Greenhalgh on 020 3603 2177.  Many senior executives that we help have issues with terms in their employment contracts which they would not signed up to had they taken legal advice at the time.

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