Employment Agreements In Singapore: What You Need To Know

Overview

Employment agreements are necessary to keep the relationship between an employer and employee in check and to lay out possible dispute resolution options.

Without a well-drafted employment agreement, businesses and employees alike may find themselves embroiled in frequent employment disputes.

In order for employment agreements to be enforceable, both parties must enter into the contract voluntarily.

Every term of a contract of service which provides a condition of service which is less favourable to an employee than any of the conditions of service prescribed by this Act shall be illegal, null and void to the extent that it is so less favourable.

For employees covered under the Employment Act, the employment contract should not contain any terms that are less favourable to an employee than any of the conditions of service prescribed by the Act Employment Act. In the event such terms are present in an employment agreement, they shall be illegal, null and void. Examples of such terms include the following:

• No salary period shall exceed one month.
• Every employee shall be allowed in each week a rest day without pay of one whole day which shall be Sunday or such other day as may be determined from time to time by the employer.

What Are Key Employment Terms (KETs)

Key employment terms are the key elements in an employment contract that outline the most important terms and conditions of an employment contract.

What Should An Employment Contract Include In Singapore

Your employment contract should contain the following Key Employment Terms, unless it is not applicable to the employee:

• Full name of employer.
• Full name of employee.
• Job title, main duties and responsibilities.
• Start date of employment.
• Duration of employment (if the employee is on a fixed-term contract).
• Working arrangements, such as daily working hours, number of working days per week, and rest days
• Salary period
• Basic salary
• For hourly, daily or piece-rated workers, employers should also indicate the basic rate of pay (e.g. $X per hour, day or piece)
• Fixed allowances
• Overtime payment period (if different from item 7 salary period)
• Overtime rate of pay
• Other salary-related components, such as bonuses and incentives
• Type of leave such as Annual leave, Outpatient sick leave, Hospitalisation leave, Maternity leave, Childcare leave
• Other medical benefits, such as Insurance, Medical benefits etc
• Probation period
• Notice period

Additional Items That Can Be Added To An Employment Contract

There are additional items that can be added to employment contracts such as Non-Disclosure Agreements and Non-Compete Agreements.

Terminating An Employment Contract In Singapore

Either party may terminate an employment contract by either following the terms stated in the contract or by following the minimum statutory period. An employment contract should contain a termination clause, which clearly states the required notice period that either party should give the other before proceeding with termination

Breach Of Employment Contracts

Singapore law dictates that if one party does not perform to his or her obligations under a contract, the other party may file a civil suit against the other party for damages for breach of contract.

As an employer, you can add provisions in your employment contract stating a specific sum of money to be paid as compensation by the breaching party.

Need Help In Regards To Employment Contracts?

If you’re an employer or employee who needs legal advice with regards to drafting a contract, breach of contract, or any other employment contract-related matters, please feel free to contact our employment lawyers for a consultation.