Employment Archives | Leading Divorce Lawyers Singapore

Employment Contracts in Singapore

Employment contracts are essential legal documents that govern the relationship between an employer and an employee. They contain important information regarding both parties’ roles and responsibilities, both during and after the term of employment.

In Singapore, an employee may be subject to a permanent or fixed-term employment contract. A permanent contract refers to long-term indefinite employment, whereas a fixed-term contract refers to a specified term of employment.

Both parties must understand the fundamental parts of an employment contract before signing it. Specific laws apply to different types of employment in Singapore, with the Employment Act 1968 (the EA) being the primary legislation.

This article highlights fundamental terms ordinarily included in an employment contract and the governing laws.

Eligibility under the Employment Act

The EA does not protect those who are not deemed to be “workers” within the Act’s definition. If a type of employment is not covered by the Act, their role and responsibilities will be solely governed by their employment contract. The EA will cover any employee working under a contract of service unless they are:

A seafarer, i.e. a person who is employed or works on board a ship;
A domestic worker, defined in the Act as “any house, table, or garden servant or motor car driver, employed… in connection with the domestic services of any private premises“; or
A statutory board employee or civil servant.

Part 4 of the EA, which sets out the law for employee’s rest days, working hours, and other conditions of service, will also only apply to specific categories of workers. In particular:

“Workmen” (i.e. people doing manual labour) who receive a salary of less than $4,500 per month; and
Any other employee who receives a salary of less than $2,600 per month, except for those employed in a managerial or executive position.

Illegal employment contracts

The EA protects employees by setting out laws regarding their pay, holidays, and sick leave, among other things. Parties have the freedom to negotiate the specific terms of the employment contract; however, Section 8 of the EA renders any contract invalid that is less favourable to an employee than any of the conditions set out in the Act.

Standard terms

Some of the standard terms commonly found in employment contracts are as follows:

Standard Term	Purpose
The Parties	To identify the names and contact details of the employer and employee subject to the contract.
Job Description	To outline the employee’s job role and responsibilities.
Start Date	To state when the employment shall commence.
Duration	This highlights when the employment will end if it is a fixed-term contract.
Salary	To provide details of the employee’s standard pay.
Benefits	To provide details of any additional benefits, such as bonuses and healthcare.
Working Hours	To make clear when the employee is expected to work.
Holidays	To set out the employee’s holiday entitlement and process for requesting time off.
Sick Leave	To explain the employer’s sick leave procedures and set out the employee’s sick pay.
Maternity Leave	To set out paid leave for pregnant women.
Termination	To detail the procedure for either party ending the employment, including the notice period.

An employment contract that does not include the above terms may not be enforceable or may lead to a dispute between the parties. Therefore, employers and employees must understand the fundamental laws concerning the above terms and their corresponding rights.

Salary

Singapore has no minimum wage; instead, wages are guided by markets and demand. Therefore, an employee’s remuneration depends on what the employer offers and how well the employee can negotiate a better salary.

However, the EA states that an employee must be paid before the expiry of the 7th day after the last day of the salary period, which cannot exceed one month. The employer must pay the employee for any overtime within 14 days of the relevant salary period.

Whilst the EA does not oblige employers to pay their employees bonuses, this is becoming common in Singapore. The employment contract should specify how bonuses are calculated and paid out.

Working hours

The EA only regulates work hours for employees under Part 4 of the Act. Under this section, employees who work up to five days a week are allowed to work a maximum of 9 hours a day or 44 hours a week. If they work more than five days a week, they can work a maximum of 8 hours a day or 44 hours a week. Employees must also not work for any longer than six consecutive hours without a break.

Employees not covered under this section will be provided with their hours in their employment contract. It is common for employees who do not fall within Part 4 to work from Monday to Friday, and for their standard hours to be from 9 am to around 6 pm.

Holidays

Public holidays

Section 88 of the EA states: “Every employee is entitled to a paid holiday at his or her gross rate of pay on a public holiday that falls during the time that he or she is employed…“. This provision includes all public holidays in Singapore from various cultures and religions.

Employees are entitled to an additional day off or a day’s salary if a public holiday falls on a non-working day. When the public holiday falls on an employee’s rest day, the employer will treat the next working day as a paid holiday. Rest days only apply to the two types of workers highlighted above under Part 4 and are defined as one unpaid rest day per week, which must be Sunday, or any other day as may be determined by the employer.

Alternatively, an employee may be required to work on a public holiday, in which case they can agree with their employer to substitute it with another day’s holiday.

Annual leave

Employees become eligible for annual leave once they have been employed by the same employer for at least three months. The entitlement increases the longer a person works at a company. Within their first year of employment, employees will have seven days of annual leave. The number of days will increase by one day for each year they work there, and the maximum entitlement under the EA is fourteen days.

In practice, it is common for employees to be given more annual leave than is provided for under the EA, as the law only provides a minimum entitlement.

Sick leave

To be eligible for sick leave and pay, an employee must:

Be covered by the EA;
Have worked with the employer for at least three months; and
Have informed or tried to inform their employer of their absence within 48 hours.

An employee who satisfies the above will be entitled to paid outpatient sick leave and paid hospitalisation leave:

Outpatient leave requires the employee to produce a certificate from a medical practitioner stating they are not fit to work.
Hospitalisation leave covers any period during which an employee needs hospital care. It also includes bed rest and recovery periods following hospitalisation. To qualify, the employee must be admitted as an in-patient for day surgery, quarantined, or have a medical certificate.

The sick leave entitlement increases the longer an employee has worked for the same employer. However, unlike holidays, employees only need to complete six months of service to benefit from the full entitlement. The maximum number of days available for paid outpatient leave is fourteen; for paid hospitalisation leave, it is sixty.

Maternity leave

Women who have worked for the same employer for over three months are entitled to paid maternity leave. If the child is a Singaporean citizen born after 1 January 2017, a maximum of 16 weeks of paid leave will apply. If the child is not a Singapore citizen, the maximum entitlement is 12 weeks.

Termination

Section 10 of the EA provides that either party to the contract may notify the other party at any time of their intention to terminate the employment. Section 10(3) provides the minimum notice periods depending on the length of employment:

Length of employment	Notice period
Less than 26 weeks	One day
Between 26 weeks and 2 years	One week
Between 2 and 5 years	Two weeks
Over 5 years	Four weeks

The notice period must be the same for the employee and employer. The relevant party must give the notice in writing.

Conclusion

Employment contracts will vary depending on the type of role and company. However, it is important that employers include the standard terms where appropriate and comply with the minimum legislative requirements.

Employees who are unsure about the terms of their contract should avoid signing it until they have sought clarification. A specialist employment lawyer can assist with reviewing and advising on the terms and negotiate with the employer where necessary.

Non-Compete Clauses in Singapore

Employment

In many employment contracts, an employee will be prevented from engaging in certain activities that compete with those carried out by their employer. This term is known as a non-compete clause and is designed to protect an employer’s business interests both during and after the duration of employment.

One of the main issues with non-compete clauses is striking the appropriate balance between the protection of the business and an employee’s right to work. In Singapore, there is no statute governing the regulation of non-compete clauses. This means that every dispute brought before the court must be decided on a case-by-case basis, with reference to previous case law.

The labour regulation bodies in Singapore are soon to release some much-needed guidance on using non-compete clauses. In the meantime, various factors need to be considered by any business or employee entering such a contract.

What can non-compete clauses restrict?

It is standard for a non-compete clause to restrict how and where an employee does business during and after their employment. The scope of a non-compete clause depends upon the type of industry. A few examples of what can be restricted are as follows:

Working for a competing business
Starting a competing business
Soliciting clients from a former employer
Soliciting colleagues from a former employer
Working within a geographical area

A non-compete clause will also come with a set duration, which states how long the employee will be bound by the restriction following the end of their employment.

Are non-compete clauses enforceable in Singapore?

In short, it depends. Due to the lack of a legislative framework, the enforceability of non-compete clauses is guided by the court’s decisions in previous cases. Over time, a two-part criterion has been established to assist the court in determining whether such clauses should be enforced, as follows:

Does the clause protect a legitimate proprietary interest of the employer?
Is the scope of the non-compete clause reasonable?

These are examined in more detail below.

Legitimate proprietary interest of the employer

This generally refers to an interest of the business that it would be reasonable to protect. The courts have stated three types of proprietary interests will be considered legitimate for the purposes of a non-compete clause. They are:

Trade secrets;
Trade connections; and
Maintaining a stable, trained workforce.

However, the employer must go one step further and show the interest they rely on is relevant to that employee. For example, a less senior employee is unlikely to have access to confidential information constituting trade secrets. Therefore, a non-compete clause in this context is unlikely to be enforceable.

The court will consider whether it is fair for an employee to use the business’s information or connections for their personal benefit. It is important to note the skills developed by an employee during their employment will not fall within this definition and cannot be restricted.

Reasonableness

The court will then consider whether the non-compete clause is reasonable, both in respect of the interests of the parties and those of the public. The law has been developed to avoid overly restrictive clauses, but whether it is reasonable will depend on the type of employment and industry.

Regarding the employee’s interests, a person’s future employment may be significantly hindered if their non-compete clause prevents them from working within a wide geographical area for an indefinite duration. Conversely, a non-compete clause that only applies to a small geographical area and lasts, say, 12 months, is more likely to be reasonable.

In terms of the interests of the public, overly restrictive non-compete clauses will impact freedom of trade and competition, which is a fundamental aspect of business, giving the public the ability to choose. The court will, therefore, want to avoid a situation where one business monopolises a particular industry.

In assessing reasonableness, the court will look at several factors, including:

Whether the clause is specific to the employee; if so, it is more likely to be considered reasonable.
What the employee is restricted from doing. A general restriction preventing an employee from working for any competitor in any geographical area is more likely to be unreasonable.
Duration of the clause. It is more likely to be reasonable if the restriction only lasts for a set duration. A longer period will usually be reasonable for an employee who works at a more senior level.
Geographical limitations. Depending on the type of business, it may be reasonable for an employee to be restricted from carrying out business in a specific country, region, or city. However, any geographical restraints must be necessary and justified and should not disproportionately impact competition.

Unenforceable non-compete clauses

If the court finds the two criterions above are not met, the non-compete clause will not be enforceable.

A mechanism known as the “blue pencil test” will allow the court to strike out the unreasonable parts of the clause, meaning the rest of it can stay in force. This avoids the need for the entire clause or contract to be rewritten, which the court could not do in any event. Alternatively, if the entire non-compete clause is found to be unreasonable, it can be struck out, leaving the rest of the contract in force.

Enforcing a non-compete clause

If an employee breaches a non-compete clause that is valid and reasonable, the employer may apply to the court for either of the following:

An injunction to prevent the employee from committing the breach; and/or
Compensation for any financial loss suffered due to the breach.

An injunction usually prevents the employee from being employed with or setting up a competing business. Compensation will be awarded if the employer can show that the loss, they have suffered is a result of the employee breaching the non-compete clause.

It is important to note that the employer will first need to satisfy the court the non-compete clause is reasonable before it will further consider the enforcement application.

Things for the employer to consider

A business that wants to include a non-compete clause in its contracts will want to avoid a situation where the clause is challenged or deemed unenforceable. Seeking the assistance of an employment lawyer to draft the employment contract will ensure the non-compete clause is drafted properly. However, there are also some general guidelines employers can follow:

Ensure any restrictions on the employee are reasonable. The employer should only restrict what is necessary to ensure the business’s legitimate interests are protected.
Make the clause specific to the employee. Blanket restrictions that apply to all employees are unlikely to be enforceable, particularly considering the varying roles and responsibilities in different companies.
Avoid ambiguity. A dispute or unenforceability is much less likely to arise if the clause clarifies which activities the employee is prevented from doing.

Things for the employee to consider

A future employee may be tempted to sign their non-compete agreement without fully understanding its implications. The law will seek to protect employees from unjustified restrictions, as we have seen above. However, they should still take the time to review the contract and obtain clarification on any elements they are unsure of. If presented with a non-compete clause, employees should consider doing the following:

Speak to an employment lawyer. They will be able to advise the employee on the terms of the agreement and whether it is reasonable and capable of enforcement.
Speak to the employer. After reviewing the agreement and taking advice from a lawyer, the employee may be concerned that parts of the non-compete clause are overly restrictive. The employee is wholly entitled to negotiate these terms with the employer or, at the very least, seek clarification from them.
Keep a note of any changes. The employment contract will be the final version, including any amendments, as signed by both parties. The employee should keep a copy of the contract and note any subsequent amendments, just in case of any dispute. It is also sensible to keep a record of any discussions had with the employer about the terms of the non-compete agreement, as these may need to be referred to if the matter ends up in court.

Conclusion on non-compete clauses in Singapore

Non-compete clauses are an effective mechanism for providing businesses with confidence when hiring employees at all levels of their business. It is reasonable for employees’ activities to be restricted to a degree so that standard business interests can be protected.

However, non-compete clauses used as an attempt to disproportionately restrict trade and employment will not be recognised by the court and will be deemed unenforceable.

It is expected that the guidance due to be released in the latter half of 2024 will shed further light on the effective use of such clauses, thereby providing further clarity on this complex area of the law.

Sexual Harassment in the Workplace

Employment

Singapore has robust anti-harassment laws. Although sexual harassment is not specifically mentioned, the Protection from Harassment Act (POHA) 2014 includes any form of sexual harassment.

Sexual harassment in the workplace often involves power play between more senior and subordinate employees. It can take on many forms – from very subtle advances to blatant sexual harassment.

Besides the protection in the POHA, there are specific responsibilities on employers under the Employment Act to provide a safe working environment for all employees.

This article will discuss the Protection from Harassment Act, how sexual harassment is defined, and the different types under the Act. We’ll touch on the employer’s responsibilities, the criminal offence of sexual harassment, and possible penalties if convicted. Also, we’ll look at remedies available to victims of sexual harassment in the workplace, and the steps to take if you find yourself to a victim of sexual harassment in the workplace.

What is sexual harassment?

The POHA stipulates that no individual may cause another person harassment, alarm, or distress by:

using any threatening, abusive or insulting words or behaviour; or
making any threatening, abusive or insulting communication; or
publishing any identity information of the target person or a related person of the target person.

If the words, behaviour, communication, or publication causes the victim harassment, alarm or distress or is likely to cause such a reaction, the person can be guilty of an offence.

This definition includes words, behaviour, communication, or publication that amounts to sexual harassment.

The Act gives a few examples:

X and Y are coworkers. At the workplace, X loudly and graphically describes to coworker Z, their desire for a sexual relationship with Y in an insulting manner. X knows that Y is within earshot and intends to cause Y distress. Y is distressed. X is guilty of an offence under this section.
X and Y were formerly in a relationship which has since ended. X writes a post on a social media platform making abusive and insulting remarks about Y’s alleged sexual promiscuity. In a subsequent post, X includes Y’s photographs and personal mobile number, intending to cause Y harassment by facilitating the identification or contacting of Y by others. Y did not see the posts but receives and is harassed by telephone calls and SMS messages from strangers (who have read the posts) propositioning Y for sex. X is guilty of an offence on each post.
X and Y are classmates. X posts a vulgar tirade against Y on a website accessible to all their classmates. One of Y’s classmates shows the message on the website to Y, and Y is distressed. X is guilty of an offence under this section.

From the definition and examples, we can see that sexual harassment can take on many forms. It is not confined to what happens on the actual work premises; it could also occur at work functions or client premises.

Threatening, abusive or insulting words – verbal harassment

Verbal harassment includes lewd comments, inappropriate suggestions or proposals of sexual favours, sexual jokes or any other sexually explicit utterance that is inappropriate, unwelcome, and causes the victim distress or alarm.

Threatening, abusive or insulting behaviour – physical harassment

Physical, sexual harassment includes any deliberate inappropriate or unwelcome physical contact of a sexual nature. It could be hugging, touching, patting, kissing, sexual assault, or rape. It could also include stalking the victim.

Sexual harassment can also amount to an outrage of modesty under the Penal Code.

Threatening, abusive or insulting communication or publication

Digital harassment on social media platforms is becoming more common. It includes posting insulting and inappropriate sexual comments or remarks, photos, etc., on social media.

It can also include notes, emails, and letters with inappropriate sexual content that is likely to cause distress or alarm.

What are the employers’ responsibilities regarding sexual harassment in the workplace?

The POHA does not impose any direct duties on employers. However, employment laws impose a legal obligation on all employers to provide a safe working environment for employees. This duty includes taking reasonable steps to protect employees against sexual harassment at the workplace.

The Tripartite Advisory on Managing Workplace Harassment sets out practical guidance for employers. To comply with their duties, employers should put anti-harassment policies and procedures in place for reporting and managing sexual harassment complaints.

What is the offence of sexual harassment?

Regardless of where the harassment occurred, section 3 of the Act states that anyone who intentionally causes another harassment, alarm, or distress by using threatening, abusive or insulting words or behaviour or communication or publishes any identifying information of the target person is guilty of an offence.

Section 4 of the Act makes behaviour or communication that is likely to cause the victim harassment, alarm, or distress an offence.

What is the penalty for sexual harassment?

A person convicted under section 3 (intentionally causing) can be punished with a maximum fine of S$5,000, or imprisonment up to 6 months, or both.

If the person is a repeat offender, the penalty can be a maximum fine of S$10,000, imprisonment not exceeding 12 months, or both.

A person convicted under section 4 (likely to cause) can be punished with a maximum fine of S$5,000.

If the person is a repeat offender, the penalty can be a maximum fine of S$10,000, or imprisonment not exceeding 6 months, or both.

Victim remedies for sexual harassment in the workplace

Although the perpetrator can be convicted of an offence and punished with a fine or even imprisonment, these penalties do not compensate the victim. However, the Act does provide civil action for compensation.

Civil action for monetary compensation

Section 11 of the POHA states that any victim of sexual harassment under section 3 or 4 may bring civil proceedings against the perpetrator and claim monetary compensation.

If the court is satisfied on a balance of probabilities that the perpetrator is guilty of a section 3 or 4 offence, the court can award damages to the victim to the extent the court thinks is just and equitable.

Protection orders

Section 12 of the Act provides that victims of sexual harassment can apply for a protection order against the perpetrator.

If the court is satisfied on a balance of probabilities that:

the perpetrator is guilty of a section 3 or 4 offence; and
the perpetrator is likely to continue with the harassment.

The court may grant a protection order against the perpetrator if the court thinks it is just and equitable to do so.

A protection order may involve:

Prohibiting the perpetrator from continuing with the harassing behaviour.
If the behaviour involves communication or publication, the perpetrator will be required to stop publishing the communication or any similar communication.
The court may also refer the perpetrator to attend counselling or mediation. The court may also refer the victim to counselling.

If the communication or publishing involves a third party, the court may order the third party to stop publishing the offending communication or disable access by end-users to the offending communication.

What to do if you are sexually harassed at work?

As we can see, Singapore laws aim to protect employees from any form of harassment in the workplace. If you are the victim of sexual harassment, you should take immediate action to protect yourself and your rights.

Approach your employer

If your employer has proper anti-harassment procedures in place, you can start by reporting the harassment to the reporting officer and following the employer’s grievance procedures. Your employer should then initiate a proper investigation and assist you with filing a police or magistrate’s report where appropriate.

Approach the TAFEP

You can also report your case to the Tripartite Alliance for Fair and Progressive Employment Practices. This is often useful in cases where meeting the requirements for a criminal sanction under the Act or a civil lawsuit is difficult.

The TAFEP will engage with you and your employer to deal with the current situation, and prevent further harassment.

Approach the court

Victims can file a Magistrate’s Complaint. This can lead to either mediation in less severe cases, or criminal proceedings against the perpetrator.

You can file for a protection order, as explained above. Breach of a protection order can lead to more penalties.

For personal compensation, the victim can file a civil lawsuit.

Seek legal advice

Often, sexual harassment follows a pattern, and dealing with it inside the workplace can be tricky. In some cases, the employer is the perpetrator, making it very difficult for the victim to take action.

If you feel that you are being sexually harassed at your workplace, you should seek legal advice to understand your rights and decide on the appropriate remedy for your case.

An experienced employment lawyer can explain the different options and differences between criminal remedies under the POHA, and civil remedies to claim monetary compensation or protection from further harassment.

If you are facing a claim of sexual harassment against you, you need legal assistance as soon as possible. The penalties can be severe and costly, both on a professional and a personal level.

An experienced lawyer can navigate the law and guide you towards the best outcome for your case.