Managing director and CEO in one person: holding office alongside an employment contract in Slovakia and Czechia

A shareholder who also runs the business as its managing director often signs an employment contract for the position of chief executive as well. The reasons tend to be practical: a regular wage, a sense of security, the benefits the business gives its employees. In the same way, an investor appoints a manager to the board and offers them an employment contract with bonuses and severance. While the relationship works, nobody asks on what legal basis the remuneration is paid. The question arises on parting: the manager challenges the notice, claims wage compensation or contractual severance, and the business objects that no employment ever arose. Slovak and Czech courts answer that question differently.

Slovakia: holding office is not a type of work

Slovak case law on this point has long been settled. As early as decision 5Cdo/92/1997 (published as R 48/1999), the Supreme Court of the Slovak Republic held that serving as a member of a statutory body is not the performance of work in an employment relationship. The subsequent decision 4MCdo/6/2009 added that serving as the statutory body of a limited liability company is not a type of work under the Labour Code, even where the managing director is not a shareholder.

The Supreme Court of the Slovak Republic most recently repeated this in judgment 8CdoPr/3/2024 of 30 September 2025. The director of an association of legal persons, who was at the same time its statutory body, had an employment contract whose duties overlapped with her remit as the statutory body. The courts concluded that the essential element of employment was missing, namely dependent work in a subordinate position. No employment therefore arose, even though the parties had labelled it as such, and the director could not claim the protection the Labour Code affords an employee on notice. The court treated the conclusions reached in relation to commercial companies as directly applicable to this other legal person too. It confined the exception in Section 42(2) of the Labour Code to cases where a special statute envisages that a statutory body will hold office in an employment relationship.

Holding office alongside employment is not excluded altogether. R 48/1999 itself accepted that a managing director may also work for the company as an employee, provided the employment is agreed with all its essential elements and its content is not conflated with the activity of a managing director. It must be a specific type of work that is not the commercial management of the company; the decision gives administrative work for the company as an example.

The holding of office itself is governed in Slovakia by the Commercial Code:

The relationship between the company and a member of a body of the company, or a shareholder, in managing the company’s affairs is governed, as appropriate, by the provisions on the mandate contract, unless a different determination of rights and duties follows from a contract for the performance of office concluded between the company and the member of the body or the shareholder, where such a contract has been concluded, or from the law. The contract for the performance of office must be in writing and must be approved by the general meeting of the company or, in writing, by all shareholders with unlimited liability for the company’s obligations.

— Section 66(6) of the Commercial Code (unofficial English translation)

Remuneration for running the business, bonuses and the rules on a statutory body’s departure therefore belong in the contract for the performance of office, not in an employment contract. What happens where there is no such contract is covered in our answer on whether a managing director must have a contract for the performance of office.

Czechia: the Labour Code yes, employment no

Czech case law starts from the same premise, that holding office is not dependent work, but it allows more. In judgment 31 Cdo 4831/2017 of 11 April 2018, the Grand Chamber of the Supreme Court of the Czech Republic accepted that a member of a statutory body and a business corporation may agree that the Labour Code will govern their relationship. Such an agreement does not, however, make the relationship one of employment. Where the activities fall within the remit of the statutory body, the relationship remains one of commercial law, and only those provisions of the Labour Code apply which are not precluded by the mandatory rules on the position of a member of a body. A dispute arising from such a management contract is, under the same decision, a dispute concerning the performance of the office of a statutory body.

The framework is set by the Business Corporations Act (Act No. 90/2012 Sb.). Under its Section 59, the relationship of a member of an elected body is governed, as appropriate, by the provisions of the Civil Code on mandate, unless the contract for the performance of office provides otherwise. In a capital company, the contract for the performance of office is concluded in writing and approved by the supreme body; without approval it does not take effect. If no remuneration is agreed in the contract, the office is deemed to be held without remuneration, subject to exceptions the Act ties to impediments on the company’s side. Where, therefore, a “management contract” with references to the Labour Code governs the holding of office and the remuneration for it, it is in substance a contract for the performance of office and should not lack approval by the supreme body.

How to divide the documents

The safe solution is similar in both countries; only the extent to which employment rules may be adopted differs:

• The contract for the performance of office governs commercial management, remuneration for the office, bonuses, the non-compete obligation and the rules on removal from office or resignation. In Slovakia it is approved by the general meeting (in a joint-stock company the articles may entrust approval of a board member’s contract to the supervisory board); in Czechia, by the company’s supreme body.
• An employment contract has a place only for activity that does not overlap with the office, with a precisely defined type of work. In Slovakia this is a condition for employment to arise at all.
• Parting must be thought through separately for each role. Removal from office does not end employment, and notice of termination of employment does not end the office. How removal is handled for senior employees below the statutory body is explained in our answer on whether a manager can be removed from a post without notice.
• Existing contracts are worth reviewing before a dispute arises. An employment contract whose type of work reads “manages the company in accordance with the articles” is exactly the kind of provision under which Slovak courts have refused to recognise employment.

We set up the interface between the two documents as a single whole: the employment side through management contracts, the corporate side, including approval by the competent body, through contracts for the performance of office.