How To Write A Fair Employment Contract in Singapore
The employment contract is one of the most important documents in an employment relationship. It lays out your obligations, as well as those of your employees. An employment contract that you fail to draft properly can lead to a legal battle that you will not want to be involved with. To avoid these issues, let’s review how to write a fair employment contract in Singapore!
Have A Comprehensive Annual Leave Policy
One of the most important clauses in any employment contract is the annual leave clause. This clause should specify the number of days of paid leave your employees has, as well as the national holidays they will be given off.
You should also consider having a comprehensive maternity/paternity leave policy in place.
You ought to specify if the employee can carry over any unused leave to the next calendar year. In some cases, companies will stipulate a maximum number of days of unused leave that can be carried over.
There should also be a clause addressing the treatment of unused leave upon the termination of employment. It is a common practice to allow for compensation in cash for any unused leave.
Recognise Work Done On Public Holidays
Another clause in employment contracts should address the treatment of work done on public holidays. This is particularly relevant for Singaporean companies since they are usually open seven days a week with reduced operating hours depending on which day it is.
Under the Employment Act in Singapore, employees who have worked at least half their usual working time on National Days or Public Holidays are entitled to one day’s extra pay. This entitlement does not apply if the employee is absent from work on that particular day without permission, or works a shift of six hours or less.
However, your employment contract can provide for different arrangements between you and your employees with regards to working on public holidays. You could agree to pay double the employee’s rate of pay for any work done on public holidays.
Where employees are not covered under the Employment Act, it is advisable for employers to be flexible and acknowledge employees’ efforts when they put in additional hours during public holidays.
Be Clear on Terms and Conditions For Bonuses, Annual Wage Supplement and Commissions
Your employment contract should also specify the terms and conditions for bonuses, annual wage supplements and commissions. This will avoid any disputes or misunderstandings that could potentially arise in the future.
For example, you may want to stipulate a certain number of years of service before an employee is eligible for a bonus. You could also agree on a percentage or a fixed sum that you will pay as a bonus.
Annual wage supplements are typically given in lieu of annual leave and should be clearly laid out in the employment contract. You also need to specify how and when to make commission payments, and the conditions to meet to be eligible for such commissions.
Be Clear On Medical Leave and Benefits
You should also be clear on the medical leave and benefits that your employees are eligible for. This will ensure that there is no confusion when an employee needs to take time off for medical reasons.
In Singapore, employees generally have 14 days of paid medical leave per year. This entitlement increases to 16 days if the employee has worked for the company for more than two years.
Your employment contract can provide for a longer or shorter medical leave entitlement, but it cannot be lower than the statutory minimum.
You should also specify which illnesses and injuries are under the medical leave policy. In most cases, employees are entitled to full pay during their medical leave. However, there are a few exceptions – for example, if the employee is absent from work due to an illness that is not covered under the employment contract.
You are also encouraged to recognise medical certificates from all registered medical practitioners.
Reimburse Expenses For Work-Related Activities
Your employment contract can also specify that the company will reimburse employees for work-related expenses. This could include travel and accommodation costs, as well as the cost of purchasing work-related equipment.
It is advisable to state the maximum amount that the company is willing to reimburse so that there is no confusion or disputes in the future.
If these details are in the employee handbook, do go over the details before he or she joins your organisation.
Provide Fair Termination Terms
A fair employment contract should also include a section on termination. This will ensure that both parties are clear on the grounds for termination, as well as the notice period and any severance payments that are owed to the employee.
In Singapore, either party can terminate an employment contract provided there is a valid reason for doing so. The most common reasons for termination are redundancy, misconduct and poor performance.
The notice period ranges from one to four weeks, depending on the length of employment. Employees who remain employed for more than two years are typically eligible for a severance payment of one month’s salary.
Implementing A Fair Training Agreement
In addition to the employment contract, you should also consider implementing a fair training agreement. This document will outline the employee’s training and development needs, as well as the company’s expectations towards training and attendance.
It is important that both parties agree to the employee’s training schedule to prevent confusion or conflict in the future.
The training agreement should also specify the notice period the employee should give when unable to attend a training session. This will help to prevent any misunderstandings and ensure that both parties are aware of their obligations.
When it comes to hiring, the last thing you want is a miscommunication that could lead to an expensive dispute. A fair employment contract should be clear and concise so that all parties have a common understanding of each other’s rights and obligations.
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