Executive Employment Contract - Payment in Lieu Clause

Executive Employment Contract


This Executive Employment Contract is suitable for senior management employees where confidentiality and non-competition clauses are important.

Previously, a version of this employment contract was available without a PILON clause. This version has now been removed, as with effect from 6 April 2018, all PILONs, regardless of their nature, are to be treated as earnings subject to income tax and Class 1 NICs. Click here for more information.

This employment contract has a General Data Protection Regulation (GDPR)-compliant data processing clause. After 25 May 2018, employers must use this clause, as employers will not be able to rely on the existing generic consent clauses.

The Pensions Act 2014 introduced a new state pension for people reaching state pension age on or after 6 April 2016, replacing the previous basic state pension and additional state pension and ending contracting out for defined-benefit schemes. This employment contract has been updated accordingly with the removal of the clause referring to the contracting out certificate.

Along with all the standard employment contract clauses, such as sickness, holiday, retirement, pension etc, this Executive Employment Contract contains a number of special clauses that are appropriate to employees working at a senior level, including a Working Time Regulations opt out, an annual salary review, clauses covering benefits, car and health insurance, anti-bribery, exclusivity of service and a 'PILON' or 'payment in lieu of notice' clause.

The PILON clause enables the employer to require the employee not to work during his notice period whilst retaining the validity of confidentiality and restraint of trade clauses.

The Schedule to this contract contains three possible restrictive covenants; non-competition, non-solicitation of customers and non-solicitation of employees. The non-competition clause provides that for a period of time after termination of employment the employee will not compete with the company’s business. The non-solicitation clauses provide that for a period of time after termination of employment the employee will not deal with the company’s customers (with whom the employee has had dealings) and can’t poach employees of the company.

Restrictive covenants should be no wider than is necessary to protect your “legitimate business interests”. If their scope is too wide, they may not be enforceable. Please ensure that you carefully consider each restrictive covenant, removing any that are not relevant to your particular business and to the specific employee. Ensure that time and geographical limits are appropriate and reasonable to the nature of your business.

The Executive Employment Contract contains the following clauses:

1. General
2. Date of Commencement/Continuous Employment
3. Duties
4. Hours of Work
5. Place of Work
6. Remuneration, Expenses and Deductions
7. Company Car
8. Holidays
9. Sickness Absence
10. Anti-Bribery
11. Pension
12. Non-Compulsory Retirement
13. Health Insurance and Other Benefits
14. Maternity Leave
15. Paternity Leave
16. Exclusivity of Service
17. Confidential Information
18. Restrictive Covenants
19. Copyright, Inventions and Patents
20. Grievance Procedures
21. Discipline
22. Termination of Employment
23. Gardening Leave
24. Company Property
25. Staff Handbook and Employment Policies
26. Data Protection
27. Changes to Terms and Conditions of Employment
28. Severability
29. Governing Law

This contract is in open format. Fields should be completed where indicated.

Clauses with optional and alternative phrases

Options and alternatives appear in blue font. The way in which this document is designed ensures that it will make sense with or without the optional clauses. Tailor this contract by removing all phrases and clauses which are not relevant to your business. Once you have finished, please remember to highlight the whole document and switch the font colour to black.

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