Service Contract

An agreement between a company and its directors or senior managers setting out their terms of service, in particular the minimum term and notice period.

A Service Contract differs from the normal conditions of employment in that it is more detailed and includes terms which are usually the subject of more arms length negotiation such as restrictive covenants. The principal feature of a service contract is the length of the term as dismissal can give the employee a damages claim based on the value of his salary and benefits, or the period up to the time when the Agreement could have been terminated.