Your Guide to Employment Agreements in Singapore

What is an Employment Agreement?

Employment agreements (also known as contracts of service) set out the terms governing the relationship between an employer and an employee. Without a solid and comprehensive employment agreement in place, employers may find their business mired with ill-disciplined workers and frequent employment disputes.

Validity of Employment Agreements

The employment agreement of an employee covered by the Employment Act cannot contain any terms less favourable than the minimum standards stated in the Employment Act. If such terms are present in the employment agreement, these terms will be considered void and illegal.

For example, the Employment Act stipulates a minimum of 7 days’ paid annual leave for employees who have completed their first year of service. The employer therefore cannot include a term providing the employee with only 6 days’ of paid annual leave in the employment agreement.

Key Employment Terms (KETs)

Key employment terms (KETs) refers to essential terms of employment contained in a contract of service between the employer and the employee.

Who Must KETs be Issued to?

All employers must issue KETs in writing to employees who:

• Enter into a contract of service on or after 1 April 2016
• Are covered by the Employment Act
• Are employed for 14 days or more with regard to their length of contract (not the number of days of work)

KETs must be issued within 14 days from the start of employment. It can be given in soft or hard copy, including handwritten.

What Must the KETs Include?

The following items must be included in the KETs, unless the item is not applicable:

1. Full names of employer and employee
2. Job title, responsibilities and main duties of employee
3. Commencement date and duration of employment (if employee is on a fixed-term contract)
4. Working arrangements (working hours and days, and rest days)
5. Salary period (e.g. hourly, weekly or monthly) and basic salary (including basic rate of pay for hourly, daily or piece-rated workers)
6. Fixed allowance and deductions
7. Overtime payment period (should it vary from the salary period) and overtime rate of pay
8. Remunerations (bonuses, incentives)
9. Type of leave (annual leave, sick leave including outpatient and hospitalisation, maternity/paternity leave and childcare leave)
10. Other medical benefits (e.g. insurance or dental)
11. Probation and notice period
12. (Optional) Work location

For example, if the employee is a Professional, Manager or Executive (PME), the KETs issued to that particular employee do not need to include item 7 on overtime pay. This is because PMEs are not entitled under the Employment Act to overtime pay.

Other Essential Employment Terms

Apart from these KETs, other essential employment terms include terms on non-disclosure, non-competition and employee code of conduct.

Hiring Part-Time Employees

Employers intending to hire part-time employees have to include certain special requirements in their employment agreements. Find out more about these requirements here.

Employment Agreement Template

Need an employment agreement template? You can get one here.

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