The difficult framing within managerial relationships

What types of managerial relationships exist?

Senior manager? Manager in common employment regime? Director, administrator or member of an administrative body?

If you have a management relationship or some contact with the above figures as a company, possibly more than once you have wondered what is the difference between them and above all, what rights or obligations each of the figures has from the point of view of labor law.

Well, the question is not minor, but the correct framing in one of these groups will determine the regulation that is applicable to them and therefore, the ability or not of the parties to agree and, where appropriate, when to do so and the terms in which to carry it out.

The classification as Senior Manager, Manager in common employment regime and/or member of the governing bodies The administration of a company is not arbitrary, it is not even a decision of the company and the manager himself, but it will be determined by several objective factors, it being essential to analyze at least the following points:

• Type of powers held in the company.
• Whether or not it has a stake in the company and, if applicable, the percentage of the capital.
• Role and functions performed.
• Situation within the organizational chart in the company.

All these factors must be observed as a group in each case, since the set of all of them will determine whether we are dealing with one or another type of manager. It is important to note that these elements are essential, but depending on the type of company and its operation, they may vary and new ones may be added.

What are the main characteristics of these groups of managers?

Manager under common employment regime

These are workers with high responsibility and functions of special relevance within the company but who carry out their professional activity on behalf of others under the direction and organization of the employer, who in return , rewards the manager through salary remuneration.

This group is subject to common labor regulations like the rest of the workers, that is, to Workers Statute and the applicable Collective Agreement.

Above these types of managers are both Senior Management staff, as well as governing bodies of the company</strong >.

The contract can be written or verbal, although in this second case it will be presumed to be full-time and indefinite.

As in the different employment contracts, the parties can include all those clauses that are of interest to them, although said will will be limited by the rights and obligations established in the Workers’ Statute and in the applicable Collective Agreement.

Senior manager

Senior managers are those workers who carry out their activity with full autonomy and therefore have direct responsibility for the smooth running of the business.

They exercise powers inherent to the ownership of the company and related to its own general objectives. It responds directly to the higher government and administration bodies of the company.

The fundamental thing in a Senior Management relationship is mutual trust between the Senior Manager and the businessman.

The relationship of Senior Managers is regulated by the Royal Decree 1382/1985 of August 1, whose own statement of reasons already indicates that it is a special employment relationship contained in the Article 2.1 of the Workers’ Statute, without prejudice to the salary guarantees that apply from this last legal norm.

One of the cornerstones of the Senior Management contract is the freedom of agreement that the parties have, only limited by this Royal Decree and the others legal rules that are applicable.

However, it must be taken into account that everything that is not agreed in writing will be subject to what is established by civil and commercial legislation.

Directors and members of the administrative bodies

Finally, this third group is characterized by being part of the management body of the company, either as Administrator in all its aspects, CEO, member of the Board of Directors or another formula.

This is a relationship of a special nature that is regulated by civil and commercial regulations. Above them, there is only the General Shareholders’ Meeting, if there is one, or the owners.

Its main function is to look after the interests of the shareholders, acting as an intermediate body between them and the Senior Managers and adopting the most relevant decision-making for the running of the business

Among its functions are some such as control of budget management, approval of the Annual Accounts and/or distribution of dividends, adoption of the strategic decisions of the company, appointment management positions, control of commercial operations of any kind such as mergers, sales, joint ventures, etc.

In any case, it is necessary to highlight that each company has its own characteristics and these functions may vary.

Regarding the regulation of your relationship with the company, without prejudice to the written agreements you reach with it, in relation to certain aspects, such as the system of remuneration of said positions, must be expressed in the bylaws of the company.