Employment Agreement Cause
As a general rule, no severance pay should be paid to the manager if the employment contract is not renewed for one reason among others: the duration of the employment expires (although this is not always the case for longer-term managers); the executive resigns, dies or leaves as a result of a disability; or the executive is terminated “for an important reason.” Faced with these unpleasant options, some boards of directors may decide to keep an executive until the end of the contract term, although this can be damaging to the association, as the organization cannot afford to pay both the severance pay and the successor`s salary. Other boards negotiate compromise compensation to avoid litigation or public litigation. The point is: remove the margin of appreciation from any provision of “grounds” or, at the very least, limit the margin of appreciation as much as possible (i.e. “reasonable discretion”).