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Drafting Employment Contracts

An Employment Contract, or also known as Contract of Service, is an agreement agreed by the employer and employee, where the terms and conditions are always defined clearly. However, terms and conditions can generally be freely negotiated between the employer and employee, just that there are labour laws that must be aware of as they govern the statutory terms of employment.

What are the essential terms of an Employment Agreement?

  • Commencement of employment
  • Appointment – job title and job scope
  • Hours of work
  • Probation period; if any
  • Remuneration
  • Employee’s benefits (e.g. sick leave, annual leave, maternity leave)
  • Termination of contract – notice period
  • Code of conduct (punctuality, no fighting at work)
  • CPF Contribution

Employment Contract is to safeguard the rights of employees and to ensure fair treatment. Your contract cannot be less favourable, if your employee is protected under the labour laws, also you cannot refuse the employee protection. On the other hand, if your employee does not fall under any of the labour laws or regulations, all the rights and obligations of the employee are those set out in the Employment Contract.

You may refer to the Guide to Written Key Employmet Trerms and Itemised Payslips and Sample Employment Contract from MOM for more information.

So who are covered by the Employment Act? Well, every employee regardless of nationality who is under a contract of service with an employer is covered by the Employment Act. But there are still some exceptions, such as:

  • Any person employed in a managerial or executive position who earns a basic monthly salary of more than $4,500.
  • Any seafarer
  • Any domestic worker
  • Any person employed by a Statutory Board or the Government.

A comprehensive guide detailing the rights of the employee who is covered under the Act is provided by the MOM. The employer must generally ensure that the Employment Agreement entered into with the employee complies with the minimum standards prescribed by the Act.

If you are hiring a foreign labour, you must take note of some important stuffs. Obtaining employment passes or work permits is a must before a foreign employee can be employed. The employer must pay monthly levies for certain classes of foreign employees. Besides, there are also quotas imposed by law limiting the number of foreign employees employed by the employer.

A good Employment Contract helps you to attract more talents to the company and further expand your business. Thus, drafting an Employment Contract became an essential task. Although you may able to draft an Employment Contract, but it will be better to engage with professional services provider. They will be familiar with Employment Contracts and able to advise you on your rights and obligations. Apart from looking for lawyers for help, you may also consider professional payroll services provider who offers Employment Contract drafting services.

 

How 3E Accounting can helps you?

We at 3E Accounting understand the importance of drafting a good Employment Agreement, therefore we are ready to provide you guidance and professional advices on drafting a good Employment Contract. For more information, contact us today!