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Chief executives are being warned they could find themselves without a job or pension if they sign the wrong type o...
Chief executives are being warned they could find themselves without a job or pension if they sign the wrong type of fixed-term contract.

Bill Miles, consultant to the Association of Local Authority Chief Executives, said too few chief executives got advice before signing fixed-term contracts, and many found promises made at the time of employment were unenforceable.

Mr Miles said it was common for contracts to say a chief executive would be allowed to retire on efficiency grounds if his contract was not renewed, but such a clause was legally unenforceable. Retiring for efficiency was a decision that could only be taken at the time of retirement.

The same applied to contracts which appear to guarantee added years on retirement.

ALACE has represented around half a dozen chief executives in the past year who had been caught out when their contracts were not rolled over, Mr Miles said.

'Lots of chief executives have signed contracts they believe either give them a renewal of contract or a retirement, whereas if they don't get a renewal they've got nothing,' he said.

Mr Miles and Northampton BC chief executive Roger Morris are rewriting ALACE's advice on fixed-term contracts, for release at the end of the summer.

The association advises against fixed-term contracts, unless chief executives are 60 or in their 40s and confident of picking up another job when it comes to an end.

Hardest hit are chief executives in their early 50s when the contract ends. 'They are a bit too old to be very attractive to a future employer but too young to retire. That means they get no job and no pension,' Mr Miles said.

Employers' principle negotiating officer Adam Barker said fixed-term contracts were often instigated by chief executives to boost salary, as they waived rights to redundancy pay or unfair dismissal claims.

They were becoming less common and employers advised councils to look very carefully at whether they would benefit the organisation, he said.

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