Everything You Need to Know About the Managerial Agreement in North Macedonia

In business operations, especially within trade companies, it is not uncommon to come across the term “managerial agreement.” Although it may initially resemble a standard employment contract, the managerial agreement has a specific legal nature and purpose. Therefore, it is important to clearly distinguish this type of contract from a classic employment agreement. In this article, we will explain what you need to know about the managerial agreement in North Macedonia, particularly what sets it apart from other forms of employment engagement.

What Is a Managerial Agreement?

A managerial agreement is a specific type of employment contract concluded between a trade company and an individual who performs a managerial function—such as a managing director, an executive member of the board of directors, or a member of the management board. Its legal basis stems from two legislative frameworks:

• Article 54 of the Law on Labor Relations, which allows for the conclusion of such a special agreement, and

• Articles 350, 365, and 366 of the Law on Trade Companies, which define the legal nature and content of the relationship between the manager and the company.

This type of agreement is referred to as “managerial” not because it constitutes a separate category under labor law, but because it governs relationships with individuals who hold executive and managerial authority. Unlike regular employees, they are not subject to typical employment conditions and often take on greater risks and responsibilities. For this reason, the legislator allows greater flexibility in regulating their status.

👉 What Makes the Managerial Agreement Different?

What makes the managerial agreement fundamentally different from a standard employment contract is the level of autonomy in defining rights, obligations, and responsibilities. The law allows the parties to a managerial agreement to deviate from the standard rules that apply to regular employees, particularly regarding:

• the duration of the employment (fixed-term or indefinite),

• working hours and schedule,

• entitlement to daily and annual leave,

• salary and compensation,

• termination of the agreement and the conditions for termination.

In addition, provisions from collective agreements do not apply to managers, nor do all parts of the Law on Labor Relations—such as those relating to disciplinary responsibility, protection of workers’ rights, and other standard guarantees.

This means that a managerial agreement enables the company and the manager to regulate their mutual rights and obligations with greater contractual freedom, allowing them to depart from certain protective provisions provided for regular employees. Such freedom often involves stricter liability clauses, shorter notice periods, and specific result-oriented obligations that are not typical of other forms of employment.

*

Conclusion

The employment contract and the managerial agreement are two different legal instruments with distinct legal natures, purposes, and applications. The employment contract is aimed at regulating the employment relationship between the employee and the employer, while the managerial agreement regulates the relationship between the trade company and the person managing it. Drafting such agreements requires legal expertise and the ability to clearly define the relationship and responsibilities between the parties.

**

Note: This text is prepared solely for informational purposes and should not be considered legal advice or guidance for specific actions. Legal matters are complex and each case has its own specifics that must be considered individually. Therefore, we recommend consulting a qualified professional – a lawyer who can find a tailored solution to your legal issue.