Director V's Employee employment rights

knipex

If a person is employed as a director (say managing director) but is not a share holder. They are listed as a director but do not have a directors agreement and for all intents and purposes are an employee drawing a salary.

Say a company needed an Irish based director or small company needed a second director.

What would their employment rights be compared to "normal" employee ?

Would it be harder or easier to lay off or fire this person ?

Not a specific case just an after work conversation over pints that raised multiple different opinions (from non legal persons) that got me curious. Some claimed being a director gave improved protections some claimed it basically eroded any protection and some claimed it made no difference.

kaiser sauze

A Director is an employee of a company, which in itself is a legal entity.

That director is answerable to 'the company', and has an employment contract/directors' agreement with that 'company'.

Their rights are just the same as any other employee, but those rights can be strengthened depending on their contract/agreement.

I think to answer your query though, they would not have any better protection if they are a director and are not a part-shareholder and have no agreement.

Jo King

kaiser sauze wrote: »

A Director is an employee of a company, which in itself is a legal entity.

Not every director is an employee. Some directors have an "executive contract" making them employees with the same rights as any employee. Some directors do not have an executive contract. The do not have a salaried job in the company, but sit on the board and offer advice and see that company law is complaied with.

knipex

Jo King wrote: »

Not every director is an employee. Some directors have an "executive contract" making them employees with the same rights as any employee. Some directors do not have an executive contract. The do not have a salaried job in the company, but sit on the board and offer advice and see that company law is complaied with.

Oh agree but in the hypothesis I laid out the director was an employee.

The reason the topic came up is that as a group we were aware of a number of people who had recently been made directors within their companies (relatively small companies) an say it as a promotion and increased job security. They didn't get raises, contracts of employment appear to be unchanged but they were to a person convinced it increased their job security.

Our debate was about if this was or was not true and showed how desperately ignorant of the law we all were.

It just made me curious.

Victor

Jo King wrote: »

Not every director is an employee. Some directors have an "executive contract" making them employees with the same rights as any employee. Some directors do not have an executive contract. The do not have a salaried job in the company, but sit on the board and offer advice and see that company law is complaied with.

However, for certain purposes non-executive directors will be treated as employees, e.g. for tax.

ben18285

And what kind of contract would I have to offer my partner if I want him to become a director (but not a shareholder) and his salary will be depending on the net win of the company (it's a new company and we agreed that he will earn 30% of all net wins)? Would you know that? Thanks, Ben

Jo King

what do you mean by net win?

ben18285

I mean the money we have left after tax and after all costs.