Article 54 of the Labor Law foresees the possibility of concluding a special type of employment contract, on the basis of which business persons – Managers are employed, so this contract is also called a management contract.
The legal basis of this type of contract is the Law on Commercial Companies, i.e. articles 350, 365 and 366, which define the management contract as a specific formal-legal model for regulating the legal status of managers: the executive members of the bord of directors, the members of the management board and the managers. With these articles of the Law on Commercial Companies, the issue of rewarding managers is regulated. Hence, Article 54 od Labor Law in relation to the Law on Commercial Companies is a reference norm in relation to management agreements, which provides the opportunity for certain rights, obligations and responsibilities from an employment relationship for certain issues to be arranged differently by the two contracting parties with the management agreement.
A management agreement is the agreement concluded by the company and a member of management body, which is defined in the Law on Commercial Companies as an agreement to regulate the relations between an executive member of the board of directors, a member of the management board i.e. the manager and the company.
The management agreement is also a agreement that regulates the working status of the managers in the company, like the agreement for regulating the relationship between the management body and the manager.
The management agreement differs from the employment contract in that with the management agreement the parties can arrange the rights, obligations and responsibilities of employment relationship differently than Labor Law, especially in relation to: the conditions and limitations of the employment relationship fixed time, working hours, the provision of daily and annual leave, the payment of the work and the termination od the validity of the employment agreement.
Apart from Article 54 of the Labor Law, as we mentioned, this possibility originally derives from Article 366 of the Law on Commercial Companies, which decisively stipulates that the executive members of the board of directors, the members of the management board i.e. the manager, are not subject to the provisions of the collective agreement as well as of the Labor law that refer to: establishment and termination of the employment relationship, disciplinary responsibility, salary, benefits and protection of workers right.
Hence, it follows that the content of the management agreement in terms of the orderliness of the listed issues can significantly deviate from the content of the employment agreement concluded in accordance with the Labor Law and collective agreement if the manager and the company so agree.
The manager, exercises the rights and obligations of the employment relationship for the time he is appointed or elected to that duty with the employer to whom he is appointed or elected according to the provisions of the Labor Law, the Law on Commercial Companies, the collective agreement and the employment agreement.