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The judicial decision of 2018, as announced in June during the Karlovarské Právnické Dny Conference, is the Judgment of the Supreme Court which clarified the rules for holding the office of a governing body member and having an employment contract with a company at the same time. According to the Judgment, an employment contract made with a governing body member cannot automatically be considered invalid in its entirety which has been the opinion prevailing in the case law so far. By such decision-making practice, the courts were causing major difficulties in assessing the position of a governing body member having a parallel employment contract. Based on the ground-breaking decision, an employment contract will have to be viewed as a director’s service agreement of its own kind, or as an addendum to a director’s service agreement. Accordingly, if an employment contract is made between the company and its governing body member, an employment relationship is not constituted, and mandatory legal provisions remain applicable, for instance in regard of the commencement and termination of office, remuneration, requirements regarding the performance of office, obligation to act with due managerial care, etc. Nevertheless, the Supreme Court has admitted that the relationship between the contracting parties may also be governed by such Labour Code provisions which are not in contradiction with the mandatory provisions of the Business Corporations Act. Naturally, our Law Office will be happy to give you advice as to how a manager’s agreement should be formulated so as to be appropriate in the context of the new judicial decision.