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Manager contract in Macedonia

The manager contract is a special legal instrument used in North Macedonia to regulate the employment status of senior executives — executive members of the board of directors, members of the management board, and managers. It has a dual legal basis: Article 54 of the Law on Labor Relations, which creates the possibility of concluding this type of contract, and Articles 350, 365 and 366 of the Law on Trade Companies, which define its content and the specific regime that applies to these persons. This page is part of our practice as an employment lawyer in Skopje and in business and corporate law.

What Is the Manager Contract?

The manager contract is the agreement concluded between the company and a member of the management body — specifically, an executive member of the board of directors, a member of the management board, or the company manager. Under the Law on Trade Companies, this agreement is formally titled the ‘Agreement for Regulating the Relations between the Executive Member of the Board of Directors / Member of the Management Board / Manager and the Company’ (Articles 350 and 366).

Article 54 of the Law on Labor Relations acts as a referral norm in relation to the Law on Trade Companies: it creates the possibility for the parties to regulate certain employment rights, obligations and responsibilities differently from the standard rules — precisely because the Law on Trade Companies already provides the primary legal framework for these executives.

A manager contract is also used to regulate the employment status of senior employees appointed with special authority and responsibilities by a management body decision, as provided by Article 366(3) of the Law on Trade Companies.

How It Differs from a Standard Employment Agreement

The key distinction between a manager contract and an ordinary employment agreement is the degree of freedom the parties have to derogate from statutory and collective agreement rules. Under Article 54 of the Law on Labor Relations and Article 366 of the Law on Trade Companies, the manager contract can regulate the following matters differently from what the Law on Labor Relations and collective agreements prescribe:

Most importantly, Article 366 of the Law on Trade Companies expressly provides that the provisions of collective agreements and of the Law on Labor Relations concerning the establishment and termination of employment, disciplinary liability, salary, allowances and protection of employee rights do NOT apply to executive board members, management board members and managers. Their rights and obligations in these areas are governed exclusively by the manager contract and the Law on Trade Companies.

Remuneration and Benefits

Articles 365 and 366 of the Law on Trade Companies regulate the remuneration of executive board members, management board members and managers in detail. The manager contract governs: salary, monthly allowances, participation in profit (shares, stock options, bonuses or other forms), insurance for life and other types, travel and other expense reimbursements, and other employment rights.

The amount and scope of total remuneration and other rights for executive board members and managers is determined by the manager contract (Article 350 contract), and depends on the nature and scope of delegated tasks, the employment law status of the executive, and their personal contribution to the company’s performance.

In cases where the company’s financial position has deteriorated significantly and the remuneration of a board or management member represents a significant burden, the general meeting of non-executive directors or the supervisory board may reduce the total remuneration and other rights — subject to the conditions set out in Article 365(6) of the Law on Trade Companies.

Who Signs the Manager Contract?

Under Article 350 of the Law on Trade Companies, the manager contract between the company and an executive member of the board of directors is concluded by the non-executive members of the board of directors, and signed by the chairperson of the board. The agreement between a management board member or manager and the company is concluded and signed by the chairperson of the supervisory board. This ensures that the company’s side of the contract is represented by persons who are independent of the executive.

Termination

Because collective agreements and the standard Labor Law provisions on termination do not apply, the grounds and procedure for terminating a manager contract are governed by the contract itself and the Law on Trade Companies. The parties have significant freedom to agree on the termination regime — including notice periods, compensation upon termination, and the consequences of revocation of the corporate appointment.

While the corporate appointment can be revoked by the general meeting at any time, the contractual consequences of that revocation are determined by the manager contract. The two acts — revocation of the corporate appointment and termination of the employment relationship — must both be addressed, either together or separately depending on how the contract is structured.

The manager retains their employment rights for the period during which they hold the position, according to the Law on Labor Relations, the Law on Trade Companies, any applicable collective agreement, and the manager contract — as provided by Article 366(5) of the Law on Trade Companies.

 

Practical Checklist

When preparing or reviewing a manager contract in North Macedonia, verify the following: (1) Confirm the legal basis — the contract must be grounded in Article 54 of the Law on Labor Relations and Articles 350/365/366 of the Law on Trade Companies. A contract that only references the Labor Law is not a proper manager contract. (2) Identify who must sign on behalf of the company — for executive board members: non-executive board members, signed by the board chairperson; for management board members and managers: supervisory board, signed by its chairperson. Wrong execution voids the contract. (3) Document all derogations from Labor Law explicitly — working time, fixed-term conditions, rest, salary and termination can all be regulated differently. Each derogation must be clearly stated; silence means the Labor Law default applies. (4) Regulate remuneration in full — salary, allowances, profit participation, insurance, expense reimbursement and any other benefits must all be defined. Reference to Articles 365/366 is insufficient — the contract must specify the actual amounts and conditions. (5) Address both the corporate appointment and the employment relationship — the contract should make clear how revocation of the corporate appointment affects the employment relationship, to avoid disputes at termination. 

 

Frequently Asked Questions

What is the legal basis for the manager contract in North Macedonia?

The manager contract has a dual legal basis: Article 54 of the Law on Labor Relations (which creates the possibility of this type of agreement) and Articles 350, 365 and 366 of the Law on Trade Companies (which define its content, the remuneration framework and the specific regime applicable to executive board members, management board members and managers). The Law on Trade Companies is the primary source; Article 54 of the Labor Law acts as a referral norm.

Who is covered by the manager contract?

The manager contract covers: executive members of the board of directors, members of the management board, and company managers. Article 366(3) of the Law on Trade Companies also extends the applicable regime to senior employees appointed with special authority by a management body decision.

Do collective agreements apply to managers covered by a manager contract?

No. Article 366 of the Law on Trade Companies explicitly states that collective agreements and the Labor Law provisions on establishment and termination of employment, disciplinary liability, salary, allowances and protection of employee rights do not apply to executive board members, management board members and managers. Their status in these areas is governed exclusively by the manager contract and the Law on Trade Companies.

Can a manager contract provide worse conditions than a standard employment agreement?

The manager contract can derogate from Labor Law protections in both directions — providing either better or different conditions compared to a standard employment agreement. The standard protections on salary, termination and other listed matters simply do not apply as a baseline. This is why it is essential for the contract to be carefully drafted: without proper documentation of agreed rights and obligations, the manager may be left without protections that ordinary employees take for granted.

What happens to the manager contract if the corporate appointment is revoked?

Revocation of the corporate appointment by the general meeting does not automatically terminate the employment relationship governed by the manager contract. The two are legally distinct acts. The contractual consequences of revocation — compensation, notice, continuation or termination of the employment relationship — are governed by the manager contract itself. This is one of the most important areas to address clearly when drafting the contract.

 

Need legal guidance?

If you need assistance drafting, reviewing or terminating a manager contract in North Macedonia, the team at Lalicic & Partners is at your disposal. Contact us through our website.


Note: The above does not constitute legal advice and in no way can be accepted or understood as an instruction to act in a specific case. Each legal situation has its own characteristics that should be reviewed at separately, and for that reason we recommend that you contact a professional – a lawyer – for legal advice.