Employment contracts are an essential aspect of any business. They provide a framework for the employment relationship and set out the rights and obligations of both the employer and employee. In Singapore, there are various laws and regulations governing employment contracts. In this guide, we will provide an overview of these laws and regulations to help you understand the key aspects of employment contracts in Singapore.
Types of Employment Contracts
In Singapore, there are two main types of employment contracts: fixed-term contracts and permanent contracts. Fixed-term contracts are for a specific period, while permanent contracts are indefinite. The terms and conditions of employment, including salary, benefits, and termination procedures, are usually specified in the contract.
Under Singapore law, employers are required to provide employees with a written contract within the first 14 days of employment. The contract must include the following details:
- Name and address of the employer and employee
- Date of commencement of employment
- Duration of employment (for fixed-term contracts)
- Job title and job scope
- Working hours and rest days
- Salary and payment terms
- Leave entitlements
- Medical benefits
- Retirement age and retirement benefits
- Termination procedures
Minimum Requirements for Employment Contracts
Employment contracts in Singapore are subject to various laws and regulations. These include the Employment Act, the Employment of Foreign Manpower Act, and the Retirement and Re-employment Act. Employers must comply with these laws and regulations when drafting employment contracts.
Under the Employment Act, employees who earn a monthly salary of less than S$2,600 are considered “workmen” and are entitled to certain minimum benefits. These include:
- A minimum of 7 days’ annual leave
- Sick leave and hospitalization leave
- Public holiday entitlements
- Overtime pay for work beyond the normal working hours
- Termination notice and termination pay
- Protection against wrongful dismissal
For non-workmen, the terms and conditions of employment are usually negotiated between the employer and employee.
Employers who hire foreign employees must comply with the Employment of Foreign Manpower Act. This Act regulates the employment of foreign employees in Singapore and imposes various requirements on employers. These include:
- Obtaining a valid work permit or employment pass
- Providing medical insurance for the employee
- Ensuring that the employee’s salary meets the minimum requirements
- Providing housing or a housing allowance for the employee
- Providing a security deposit for the employee
Retirement and Re-Employment
Under the Retirement and Re-Employment Act, employers are required to offer re-employment to eligible employees who reach the retirement age of 62. Eligible employees must have been with the company for at least 3 years and must be able to perform their job satisfactorily. Employers are not required to offer re-employment if they have a valid reason, such as poor performance or redundancy.
Singapore employment laws around layoffs & termination
In Singapore, employers are required to follow specific rules and regulations when it comes to layoffs and termination of employees. These rules are in place to protect employees from unfair dismissal and to ensure that they receive fair compensation in the event of job loss.
Under the Employment Act, employers must provide notice of termination to employees who have been with the company for at least 26 weeks. The notice period is based on the length of service, with longer-serving employees receiving a longer notice period. The minimum notice period is one day for employees who have been with the company for less than 2 years and one week for those who have been with the company for more than 2 years.
In addition to notice of termination, employers must also provide termination pay to employees who have been with the company for at least 2 years. The amount of termination pay is based on the length of service, with longer-serving employees receiving a higher amount. The minimum amount of termination pay is one week’s salary for employees who have been with the company for less than 5 years and 2 weeks’ salary for those who have been with the company for more than 5 years.
Employers are also required to follow fair and reasonable procedures when terminating employees. This includes giving the employee an opportunity to be heard and providing them with a clear explanation for the termination.
In cases of redundancy, employers must follow specific guidelines set out by the Ministry of Manpower (MOM). These guidelines include:
- Identifying the positions that are redundant
- Consulting with the affected employees and informing them of the reasons for the redundancy
- Offering alternative employment within the company, where possible
- Providing retrenchment benefits to affected employees, based on the length of service
Employers who fail to comply with these rules and regulations may face legal action and penalties. It is important for employers to seek legal advice if they are unsure about their obligations when it comes to layoffs and termination.
Employment contracts are an important aspect of any business. Employers must comply with various laws and regulations when drafting employment contracts to ensure that they provide fair and reasonable terms and conditions of employment. By understanding the key aspects of employment contracts in Singapore, employers can create a positive and productive employment relationship with their employees.