Contracts of Employment and Restrictive Covenants

Employment Contracts & Service Agreements

Your contract is the foundation of your working relationship. Whether you're entering into a new employment agreement, negotiating a service agreement as a director, or operating as a self-employed consultant, understanding the terms and conditions is essential. Our Employment lawyers provide expert legal advice to individuals in the UK on all types of work-related contracts, ensuring your rights are protected from the outset.

• Employment Contract: An employment contract sets out the terms and conditions of your employment. Key clauses typically cover your job description, working hours, salary, holiday entitlement, and notice periods. We can review your employment contract to ensure it is fair and compliant with UK law, and advise you on your rights if you believe your employer has breached the agreement.
• Service Agreements: Service agreements are used for directors and senior executives and often contain more complex terms than standard employment contracts. These agreements often address matters such as bonuses, benefits, shares, performance targets, and termination provisions. We can advise you on negotiating a service agreement that protects your interests and secures appropriate compensation in the event of termination.
• Self Employed: If you're operating as a self-employed consultant or contractor, you'll need a robust contract for services. This agreement should clearly define the scope of the work, payment terms, and intellectual property rights. It's crucial to ensure your working arrangements genuinely reflect self-employment status to avoid potential issues with HMRC and IR35 regulations. We can help you draft or review your self-employment contracts to ensure they accurately reflect your working relationship and protect your business interests.

Many employment contracts and service agreements contain restrictive covenants, which can limit your ability to work for competitors or solicit clients after your employment ends. For detailed information on these important clauses and how they might affect you, please visit our restrictive covenants section below.

Restrictive Covenants

Restrictive covenants, also known as post termination restrictions, are clauses in employment contracts or service agreements that aim to limit an individual's activities after they leave a company. These clauses are particularly relevant for senior executives and professionals who have access to confidential information, client relationships, or business strategies. Understanding the enforceability and implications of these restrictions is crucial for protecting your future career prospects

When you leave your job, it’s possible you’ll want to take your client or supplier relationships with you. It’s equally possible your employer will try to stop you. We can help you negotiate the terms of your departure, including dealing with any restrictive covenants you may have signed.

Several types of restrictive covenants may be included in your contract:
•    Non-Compete Clauses: These are designed to prevent you from working for a competitor.
•    Non-Solicitation Clauses: These prevent you from actively seeking business from your former employer's clients.
•    Non-Dealing Clauses: These are broader than non-solicitation clauses and prevent you from conducting business with former clients, even if they initiate contact.
•    Confidentiality Clauses: These protect your former employer's trade secrets and sensitive information

UK courts will only enforce restrictive covenants if they are deemed reasonable. This means they must protect a legitimate business interest, such as confidential information or client connections, and must not be wider than reasonably necessary. Factors considered by the courts include the duration of the restriction, the geographical area covered, and the specific activities prohibited.

For senior executives and professionals, restrictive covenants can have a significant impact on future career opportunities. It is crucial to:
•    Negotiate: Discuss and negotiate the terms of restrictive covenants before accepting a new role.
•    Seek Legal Advice: Obtain legal advice before signing any contract containing restrictive covenants, and if you are facing enforcement action from a former employer.
•    Understand Enforceability: If you are facing enforcement action, it's important to understand that restrictive covenants are not always enforceable. We can help you challenge the enforceability of unreasonable or overly broad restrictions.

If you are concerned about restrictive covenants in your employment contract or service agreement, or if you are facing enforcement action, our experienced employment lawyers can provide expert advice and representation. Contact us today for a confidential discussion.