Victory! Having survived the interview process and fought off the competition, your are rewarded with a job offer. All your hard work and preparation to land your dream life science role paid off. However, before you accept it, consider requesting the job offer or contract in writing. After all, you would not accept a loan without reading the small print, so why would you accept a job? While the majority of job offers at senior management or executive level are conditional, if your offer is unconditional, verbal acceptance constitutes a legally binding contract.
We recently wrote an article all about how to evaluate a job offer, but this focused more on sanity checking whether the job offer and hiring organisation were a good fit for you and your intended career path. We showed you how to focus on five essential elements – compensation, technical fit, cultural fit, perks and benefits, work-life balance – and how to weigh up the job offer or contract and negotiate with your potential employer.
In this article we focus on 5 seemingly unassuming but important aspects of your employment contract or offer letter that you might overlook.
Offer letter Vs contract: what’s the difference?
While employment contracts are commonly used for C-level roles, sales representatives and independent contract positions, they are increasingly being applied to senior management and management positions too. They differ from offer letters in that they require both parties to adhere to the conditions stated in the contract, whereas in an offer letter, the employer can rescind the offer at any time. Offer letters are still the most common for non-c-suite roles and you will need to clarify the terms in the employment letter and negotiate any terms that you do not agree with, as per a contract.
5 things to triple check before signing an offer letter or contract
When reviewing a job offer or contract, it’s all to easy to skim read the document until your arrive on the section detailing your compensation and benefits. However, don’t forget to sanity check the following particulars to ensure everything tallies with what you expected and their are no typos:
Does your start date tally with your notice period for your current employer? If there is overlap – i.e you are expected to start your new position before you have served your notice – you must raise this with your prospective employer. While it is sometimes possible to negotiate your notice period, always work to a schedule dictated by your notice period with your existing employer.
Do the ‘hours of work’ and ‘normal working hours’ stipulated match your expectations for the position? They should be stated in layman terms, including lunch breaks, for example, 08:00-18:00 Monday to Friday, excluding 1-hour lunch break. If this is accompanied by a statement along the lines of “any other hours as the company reasonably deems necessary”, confirm with HR as to what this entails. As a senior manager or executive in the life sciences, you will be expected to work extra hours where necessary to ensure the efficient and effective operation of your department, but this should not mean working every hour of the day and sacrificing your weekends and evenings. An effective executive is a well-rested executive.
Holidays and sick leave
The headline figure here is always your annual leave entitlement, but you’ll want to check carefully the conditions under which you may take annual leave, and your sick pay provisions. Sometimes, what can appear to be generous holiday allowance can have stipulations as to when you can and can’t take holiday, while other companies let you accrue holiday over time.
- How many days of vacation you are entitled to each year?
- How many days of vacation are you entitled to this year?
- Can you take holidays at busy times of the year, for example, Christmas?
- When does the holiday ‘leave year’ start?
- Do unused holidays carry over to the next year?
Sick leave checklist:
- Verify whether you will have paid, statutory or critical sick pay.
Strict legislation exists which stipulates holiday duration and sick leave terms, so always check the local laws where you will be working before reviewing this section in full.
2. Conditions for termination
Your contract or offer letter will specify how the employment contract can be lawfully terminated by employer or employee. Two key terms to look out for are “just cause’ and ‘sole discretion’.
‘Just cause’ refers to an employer’s right to discipline you or terminate your contract for gross misconduct. It serves as protection for an employer (who can avoid severance) and employee (who can obtain severance unless there is a demonstrable just cause). For more information, check out this article on ‘just cause’ and what it means for employer and employee by Neil T. Buethe.
If ‘sole discretion’ is mentioned in your offer letter or contact, it means your contract can be terminated without discussing it with you beforehand, negating the possibility of discussions, notification or compromise. It might also have some implications for the employee, for example, having to repay sign-on bonuses. If you see ‘sole discretion’, consult with an employment attorney.
3. Severance pay
In the severance pay section, you’ll find details on the pay and benefits awarded to you on the termination of your contract, if any. It is paid in addition to your salary in circumstances where you are let go from a position due to situations outside your control, for example, redundancies brought about by a major business transformation, a merger, acquisition or the closure of a site.
An executives severance pay might take account of the following circumstances:
- Any additional payment based on months of service.
- Payment for unused accrued holiday pay or sick leave.
- A payment in lieu of your required notice period.
- Medical, dental or life insurance.
- Retirement accounts or pension benefits.
- Stock options.
- Assistance with your executive job search, including personal brand and CV.
According to Robert A. Adelson, a corporate and tax attorney and partner at Engel & Schultz LLP, “…it is wise for the executive to try to include severance terms in an employment agreement or your executive job offer letter at the outset of employment… [However,] a severance agreement can be made at any time throughout the employment of the executive. So, if you are unable to get severance at the outset of employment, you might try again one or two years into the employment if you have proven yourself or achieved an important milestone…”. (2018, CEOWorld).
4. Confidentiality clauses
A confidentiality clause (also referred to as a non-disclosure agreement) is a legally binding contract which stipulates how you are expected to handle your prospective employers ‘confidential’ business information. It is designed to ensure that sensitive information, such as client data and business trade secrets remain confidential at all times. This type of clause is usually included as an appendix to your employment contract or offer letter which you must sign and date in addition to the main contract or job offer. Confidentiality clauses may state for how many years they apply and to what types of information they cover. For more on confidentiality clauses and what they mean, read this superb article on confidentiality clauses in employment contracts by Upcounsel.
5. Restrictive covenants
While restrictive covenants (also referred to as restrictive clauses) won’t apply during your tenure with your new employer, ensure you familiarise yourselves with them before signing your contract or offer letter. Restrictive clauses are designed to protect the employers business, clients and employees. There are four common types of restrictive clauses which you should know about:
Non-compete clause: Prohibits you to work for a direct competitor of your former employer.
Non-solicitation: Forbids you from poaching clients and suppliers of your former employer.
Non-dealing clause: Prevents you from dealing with existing clients of your former employer.
Non-poaching clause: Bans you from poaching coworkers from your former employee.
When reviewing the restrictive covenants section of your employment contract of job offer, it is worth noting the length of the various clauses, and whether it defines which sectors, types of businesses and geographic limitations are in place. For more on restrictive covenants, check out this excellent article on restrictive covenants in employment contracts by Out-Law.
Disclaimer: The information provided is for ideas and assistance. Please seek legal assistance to ensure your interpretation and decisions are correct for your locality.
For more job search advice tailored to senior managers and executives in the life sciences…
- Read How To Give An Outstanding Interview Presentation: Tips For Life Science Executives.
- View our life science job board to kick-start your executive job search.
* Fraser Dove International is a specialist executive search firm operating exclusively in the Life Science industry. Passionate about people, we take pride in helping exceptional life science organisations source the talent they need to design, manufacture and distribute life-changing drugs, treatments and devices which transform and save patient lives.