Employment contract basics start with one rule: in Singapore, covered employees must get their key employment terms in writing. A contract can be spoken, implied or written. A written one is the safe choice. It settles disputes before they start, and the writing is what the rules ask for.
This note covers who gets the terms, what goes in them, how probation and notice work, and a short checklist for your next hire.
Put the key employment terms in writing
Singapore calls the required written terms "key employment terms," or KETs. The rule applies to covered employees who joined on or after 1 April 2016 and are engaged for 14 days or more. It is measured by the length of the contract, not the days actually worked.
Give the terms no later than 14 days after the employee starts. Better still, hand them over before day one. The Tripartite Guidelines on issuing KETs, agreed by government, unions and employers in December 2014, say the same. They also encourage employers to get the employee's written acknowledgement of the terms.
Form is flexible. A hard copy or a soft copy works, as long as the employee can easily get to the terms and keep a copy.
What the written terms must cover
The Ministry of Manpower (MOM) lists the items. Each must be included unless it does not apply to the employee. In plain words, the list is:
- Names of the employer and the employee
- Job title, main duties and responsibilities
- Start date, and the end date if the contract is for a fixed term
- Working arrangements: daily hours, working days per week and the rest day
- Salary period and basic salary
- Fixed allowances and fixed deductions
- Overtime payment period and rate, if different from the salary period
- Other pay such as bonuses and incentives
- Types of leave, such as annual, sick, hospitalisation, maternity and childcare leave
- Other medical benefits, such as insurance, medical and dental cover
- Probation period
- Notice period
The place of work is optional. MOM strongly encourages it when the place differs from the employer's address. For professionals, managers and executives, the two overtime items can be left out if overtime pay does not apply.
Spell out the probation period
The probation period is one of the items MOM asks you to state. The page gives no set wording, so write it yourself in clear terms. Say how long probation lasts. Say what notice either side must give during it. Say who decides whether the employee is confirmed, and when.
Decide early whether you may extend probation. If you may, put that in the contract, with the longest extension and the notice that applies during it. A vague clause leads to the most arguments, because each side reads it in its own favour.
Set a clear notice period
The contract sets the notice period. Where it does, the period must be the same for the employer and the employee. Both sides may also agree in writing to waive notice.
If the contract is silent, the Employment Act default applies, based on length of service:
- Less than 26 weeks: 1 day
- 26 weeks to under 2 years: 1 week
- 2 years to under 5 years: 2 weeks
- 5 years or more: 4 weeks
A person who does not serve the notice period can pay salary in lieu instead. The amount equals the pay the person would have earned during that period. MOM states that no CPF contributions are due on salary in lieu. CPF is still due on salary earned while the employee serves notice.
A short checklist for your next hire
Before the first day, run through these points.
- Check that every item on the MOM list is in the document, or marked as not applicable.
- Use plain words. If a new hire cannot explain the clause back to you, rewrite it.
- Match the contract to the offer letter. A signed offer letter that leaves out salary periods, working arrangements or leave does not cover the list.
- Ask the employee to sign and date a copy to acknowledge the terms, and keep your own.
- Set a reminder for day 14. The terms are due by then at the latest.
- Update the document in writing when a term changes, and keep the old version on file.
Good contracts are short and specific. They cost an hour to write and save weeks of argument later. This note is general information, not legal advice. For a hard case, such as a dispute or a dismissal, speak to a qualified employment lawyer or contact MOM.