Loyalty agreement with the employer


Loyalty agreement with the employer

The employer can secure the company’s interests through a loyalty agreement that obliges the employee to be loyal to the company. It can last not only during the provision of work for the employer but also after its termination. This type of contract may include, for example, non-competition and other conditions that are beneficial for the employer. The content depends on the arrangements of the parties. You can always negotiate individual provisions of the contract.

Training Loyalty Agreement

It is the most common type of loyalty agreement. In this way, employers try to protect themselves against the departure of newly trained people. One concludes these agreements often before the training. The type of contract depends primarily on the employer’s policy.

A loyalty agreement should not apply to compulsory training, such as, for example, OHS or courses on the handling of products or machines in use in this particular company. Typically, companies require a loyalty agreement when employees take specialized courses that are costly for the employer.

The loyalty agreement should be in writing. The provisions of such a contract can not be detrimental to the employee and less favourable than the labour code. 

Even without a loyalty agreement, the law obliges you to keep the information you obtain at work confidential. This results directly from the Labour Code:

Article 100 §2 point. Take care of the interest of the workplace, protect its property and keep the information the disclosure of which could harm the employer confidential,

Loyalty Agreement – Training Reimbursement

If you’ve signed a loyalty agreement for training, you will have to reimburse the training costs when you decide to quit the job earlier than the agreement provides. This period may not exceed three years. An exception may be if you resign because the employer fails to comply with obligations, such as paying remuneration or when you are a victim of mobbing.

Compensation for breach of contract – non-competition

Failure to comply with the terms of the contract may be, for example, taking up a job in a competitive company or setting up your own business. In these cases, you expose yourself to compensation for breach of the loyalty agreement. The employer cannot claim high compensation. The contract should contain the amount of contractual penalty.

If the employee violates the prohibition of competition during the employment period, the scope of the penalty that the employer may incur is relatively limited.

Following article 114 of the Labour Code, an employee who, in consequence of non-performance or improper performance of employee duties, caused damage to the employer due to their fault shall bear material liability following the principles set out in the provisions of the Labour Code.

The Labour Code contains three types of material liability of the employee:

  • for damage caused by involuntary fault – (art. 114-119)
  • for damage caused by intentional fault – (art. 122)
  • for damage caused by failure to account for the entrusted property (with the obligation to return) – (art. 124 and 125).

In the event of damage caused by the employee, the employer may only claim financial compensation. 

The employee is liable if the employer proves (art. 116 of the Labour Code) – circumstances justifying this liability:

  • a fault of the employee,
  • breach of employee duties (non-performance or improper performance of employee duties),
  • the amount of the actual loss and the normal causal link between the employee’s behaviour and the resulting loss (damage to the employer’s property).

Loyalty agreement – can it be avoided?

You can resign from the company with which you have signed a loyalty agreement without further consequences only due to the employer’s fault

The conclusion of a loyalty agreement is not mandatory. Sometimes the employer insists on signing it, and the refusal ends with the resignation from cooperation. It is worth negotiating favourable terms of the agreement from the very beginning. You can talk to your employer about changing some contractual terms or shortening the non-competition clause.