Additional clauses to the employment contract: keys to protecting employers’ interests
In the field of employment, establishing reciprocal rights and obligations between employer and employee from the outset is essential to prevent conflicts. In this context, contract riders are particularly relevant, especially in cases of middle and senior management, where access to sensitive information and specialised training play a key role. However, although these clauses are common in positions that entail a certain degree of responsibility, they can also be applied in other cases in which, due to the circumstances of the contract, they are of interest, and can also be agreed once the employment relationship has begun.
For these clauses or covenants to be effective, it is essential that their wording be precise and in line with legal and jurisprudential restrictions; otherwise, an inappropriate approach could lead to their nullity, compromising the effect of their inclusion as a guarantor of business interests.
The advantages that these clauses can offer are sometimes aimed at protecting important assets such as client portfolios, organisational strategies, databases and any other resource that constitutes a competitive advantage from competing companies in the market. In this respect, it is worth highlighting the confidentiality clause and the post-contractual non-competition clause, which are often closely linked and which, in practice, give rise to numerous doubts.
Confidentiality clause in the employment contract
The confidentiality clause establishes the obligation of the employee not to disclose information classified as reserved or confidential of the company. Although it is true that article 5 of the Workers’ Statute implicitly includes the duty of confidentiality under the principle of good faith, the inclusion of this type of clause in the contract is advisable as it makes it possible to clearly specify which strategic or sensitive information requires special protection and to delimit the conduct that entails non-compliance, thus reinforcing the company’s protection.
As mentioned above, this type of provision is particularly relevant in managerial or middle management positions with access to strategic information, and even allows this obligation to be extended for a period of time after the end of the employment relationship.
Post-contractual non-competition agreement in the employment contract
The post-contractual non-compete pact is a crucial tool to preserve key aspects such as strategies or advantages over direct competitors in the market.
The signing of a post-contractual non-competition agreement means that, after the termination of the employment relationship, the employee undertakes not to provide services for competing companies for a certain period of time, setting a penalty clause for damages in the event of non-compliance.
However, it is essential to be cautious in the drafting of this type of clause, which requires compliance with certain criteria. Inadequate drafting not only compromises their functionality, but may also lead to the loss of the right to compensation, even in the event of non-compliance by the employee:
- The employer must have an effective industrial or commercial interest.
- The covenant must be subject to a time limit which may not exceed two years for qualified technicians and six months for the rest.
- The worker must receive adequate financial compensation commensurate with the commitment made.
- Reciprocal rights and obligations cannot be abusive, respecting proportionality and balance between the interests of both parties.
Permanence covenants in the employment contract
Permanence covenants aim to protect and retain the investment made by the company in the training or specialisation of its employees.
By means of this covenant, the employee undertakes not to leave his or her post for a certain period of time in return for the training received and financed by the employer company, with compensation for damages in the event of non-compliance.
However, in order to be valid, these covenants must meet specific requirements:
- The maximum duration of the permanence must not exceed two years.
- The training must be specific and necessary for the development of the job, as well as qualified, representing an effective professional enrichment.
- Compensation should be proportional and should be calculated on the basis of the actual cost of the training.
Variable remuneration or bonus clause in the employment contract
Special interest in variable remuneration clauses or bonuses as their use is very common and they generate many doubts in practice. Thus, the variable bonus is a remuneration tool designed to reward the individual performance of the worker or the company’s results and to align the worker’s interests with the company’s objectives.
However, in order to avoid possible conflicts, it is subject to important restrictions, being essential that this clause establishes clear, achievable and measurable objectives, detailing precisely the criteria and conditions for the accrual of the bonus, since an ambiguous or generic wording may result in the obligation to pay the bonus even if the objectives have not been met.
What are the consequences of non-compliance with employment contract riders?
The breach by the employee of the agreed clauses constitutes a breach of the duties derived from contractual good faith, which entitles the company to take disciplinary measures, which may include disciplinary dismissal. In addition, in those cases where it is provided for, the company may demand compensation for damages, even after the employment relationship has been terminated.
In conclusion, employment contract riders are valuable tools to safeguard legitimate company interests such as sensitive information, investment in training and competitive advantages, however, it is essential to provide them with legal certainty, paying special attention to their drafting, provisions and guarantees as well as compliance with legal and jurisprudential limits.
In this regard, expert legal advice is key to avoid invalidities and to ensure that these provisions fulfil their protective function.
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