Let us assume that the startup founder asks you to draft a Singapore-law compliant employment agreement.
How do you begin?
Simple, start with a standard employment agreement which you can use anywhere. Here is a simple template.
Now, you need to add in the local aspects.
Singapore employment law is governed by the Singapore Employment Act, 1968 (available here).
To hire an employee in Singapore, you need to execute a standard employment contract, with certain “key employment terms” that are prescribed under Singapore law.
Here is a list of the items, and you can download a personal checklist here. Let us go through it live.
You will need to modify it only slightly. Just add the Key Employment Terms in schedule to the agreement, at the end.
Just make sure that no part of the employment agreement conflicts with the schedule.
You will read through the agreement, and wherever there is a conflicting clause, you can either remove it, or simply refer to the schedule.
Can you do it?
Now, the client asks you – do I need to administer this to the managers, and the CXOs? Is the employment agreement similar for everyone?
Yes, with one exception – anybody who qualifies as a professional, manager or executive does not have to have terms for overtime period and overtime pay.
In senior positions, therefore, the requirements for overtime do not apply. However, the other key employment terms still apply.
The client asks you – do I need to keep in mind any other requirements?
You will have to think about the most common things – when should the key employment terms be administered?
These must be issued within 15 days of starting work.
Now, let’s say the Singapore startup founder does not have an HR yet.
The company is still pretty small – it has less than 20 people.
One of the employees has asked for a payslip. How can you help?
The Singapore Ministry of Manpower also prescribes a sample payslip format.
Download it and fill it up.
You can do it for your client. Your client could do it himself/herself too, but he needs to focus on business growth as that is the most valuable use of his time.
Can you do it on your own for a startup or in an internship now?
This is how you can learn to perform international contract drafting work.
We have classes where students practice drafting these clauses.
Of course, this is not all. There are more things to learn if you want to draft employment contracts correctly, but now you have got a good start on this skill.
Do you want to learn some more?
Here are some local requirements:
Let me show you one concept – termination of employment agreements. Your potential clients may need to know about this.
Notice period can be contractually specified under Singapore law by the parties. If it is not specified, then it must be as follows:
- one day’s notice if the person has been so employed for less than 26 weeks;
- one week’s notice if the person has been so employed for 26 weeks or more but less than 2 years
- 2 weeks’ notice if the person has been so employed for 2 years or more but less than 5 years; and
- 4 weeks’ notice if the person has been so employed for 5 years or more.
Now, consider that the lawyer forgot to write the notice period clause in an employment contract of an employee.
His contract needs to be terminated after 1 year, because he hasn’t been performing satisfactorily in the past 2 months.
How much notice do you need to give?
Singapore law is very clear that in the event of breach of notice period, the employer/employee, whoever is the party breaching it, is required to pay the salary due during such period as compensation in lieu of the notice.
Notice period does not need to be followed only if there is a breach of contract, or failure to pay salary or absence without cause.
If an employer fails to pay salary within 7 days of it being due, the contract is breached and notice period is not required to be followed. A Singapore business must pay salaries on time.
Similarly, if an employee is absent from work continuously for more than 2 working days without approval and a good excuse or without informing, the employment can be terminated without any notice period.
How long do you have to wait before taking such action for unauthorised absence in India?
However, a change in terms and conditions of employment is not a breach – either the parties need to agree to it or the employment can be terminated by following the notice period specified.
Notice period is not required to be observed if there is a dismissal pursuant to a disciplinary inquiry.
Disputes pertaining to employment issues are adjudicated by the Employment Claims Tribunal which is created under Employment Claims Tribunal Act, 2016.
Once you know this work, you can advise clients around termination, draft and review employment agreements, review their termination clauses as well!
What about severance compensation for directors and other senior employees? Is it legal in Singapore?
A monetary compensation (in addition to notice pay) for terminating the contract before a specified period may be specified in the contract – this is perfectly valid and not regulated by the Employment Act, which leaves parties free to negotiate such commercials. Any disputes pertaining to this have to be settled by the civil court.
Working hours, breaks, overtime
- 44 hrs/week, can be higher for managers or in unforeseen scenarios
- Overtime pay – 1.5x of basic pay for the first 2 hrs overtime, then 2x of basic pay (records of working hours and overtime hours must be kept by employer)
- One rest day per week to be provided – can be a single day or two half day periods spread over the week
Probation
The Employment Act of Singapore does not have specific provisions on probationary period. However, as a popular practice, it can range from 3-6 months.
This is just the starting point.
As we said before, it is not necessary for you to remember everything. If you got a sense of how to go about this, it is a sign of progress.
The local aspects are not difficult to understand, and the work pays more than Indian work!
Here is a project on this available right now on Upwork:
This is the first time you were exposed to this kind of learning. It is important for you to notice that this work is understandable and doable.
The work is very similar in different countries.
For example, if you were doing this for Canada, you would refer to the Employment Standards Act of the relevant state (see for Ontario here, British Columbia here), instead of Singapore Employment Act.
The good news is that they don’t have 44 confusing labour laws like it is the situation in India!