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Remuneration for Economic Results Agreement

The employer may pay the employee a supplementary remuneration based on the company’s economic results (i.e. a share of the company’s profit or turnover). The employee is entitled to demand remuneration for economic results only if its’ payment has been agreed upon. The agreement must contain remuneration cases, frequency, manner, and basis for calculation. Remuneration for economic results may, for instance, be paid to the employee either on a monthly or a yearly basis.

Remuneration paid for economic results is calculated presumably based on the approved economic report, for which the employee is entitled to get remuneration. Note that it is irrelevant when the remuneration for economic results agreement was concluded. If it was concluded in the middle of the economic year, the calculation shall be based on the entire economic year. However, the employer and employee are free to make special agreements regarding a shorter or longer calculation period.

If the employer and employee agree on the remuneration for economic results, it must be clearly specified on what conditions and extent is the remuneration paid also after the end of the employment relationship. It is important to avoid disputes whether and in which extent the remuneration must be paid to the employee in the case the employment relationship ends before the approval of the economic report.

The employee must receive the remuneration for economic results in six months starting from the economic report approval. Parties may also agree on an earlier payment.

Külastusi 2308, sellel kuul 2308

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