Knowing Your Employment Contract (Employees)

Why it pays to understand your employment contract fully and terms to look out for.

What Is A Fair Employment Contract

A fair employment contract clearly states your rights and obligations as well as the hirer's. It must include the following key employment terms , namely:

  • Sick leave
  • Annual leave
  • Public holidays
  • Salary payments
  • Termination of employment

Why It Is Important

You should understand all the terms of the contract before signing off to avoid potential disputes in future. It also keeps you aware of your rights and obligations as an employee of the organisation.

What You Must Know

The following key changes to the Employment Act took effect from 1 April 2019:

  • All employees are now covered under the Employment Act. This includes managers and executives with a monthly basic salary of more than $4,500.
  • Non-workmen earning up to $2,600 will be covered under Part IV of the Employment Act.
  • The Employment Claims Tribunal will now hear wrongful dismissal claims.

For more information on the changes, you may refer to the Guidebook on Changes to the Employment Act .

If you are covered by the Employment Act, your employer is obliged to provide statutory benefits such as leave  and public holidays  . They are also obliged to issue your key employment terms  in writing.

What You Should Look Out For

You are encouraged to go through this list of items to ensure that your contract does not contain unreasonable employment terms and covers all of these items. If your contract does not include any of these items, you should seek further discussions with your employer.

Basic Terms

For all types of employment, look out for:

  • Job title
  • Job description
  • Job aspects, work conditions or performance targets that require your attention
  • Employment start date
  • Probation period, if any
  • Terms during and after probation
  • Any other terms and conditions that your employment is subject to, such as those listed in the employee's handbook. Ask for a copy of the handbook when you start work.

For term employment contract (e.g. being employed for a fixed duration), look out for:

  • Start and end date of employment
  • Whether the contract will be renewed, or if there are conditions for renewal

Working Arrangements

Look out for:

  • Working hours
  • For shift work, whether the roster allows sufficient rest days
  • Number of working days and rest days a week

Annual Leave and Holidays

Look out for:

  • Number of days of annual leave
  • Policy on carrying forward your annual leave
  • Policy on encashing unconsumed leave upon resignation or termination
  • Public holidays (e.g. Are you given a day’s pay or a day off if you work on a public holiday or the public holiday falls on a non-working day)
  • Maternity, paternity and childcare leave entitlements

Medical Benefits

Look out for:

  • List of medical benefits
  • List of sick leave and hospitalisation entitlements

Salary, Bonuses and Reimbursements

Look out for:

  • Basic salary as agreed
  • Clear description of salary components
  • Fixed allowances as agreed, if any
  • Payment conditions, if any
  • Entitlements to bonuses, annual wage supplements and other incentives, if any
  • Date of salary payment
  • Frequency of salary payment
  • Clear explanation of commission structure, if applicable
  • Entitlements to reimbursements of expenses incurred for work, if applicable

Termination of Employment

Look out for:

  • Conditions that would constitute a termination of employment.
  • Notice period for termination of contract by both you and your employer, before and after confirmation of employment.
  • Option to terminate the contract by serving notice or making payment in lieu of notice.
  • Penalties, such as in the event of early contract termination, failing to meet performance targets or misconduct.