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Employment Agreement

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.

THE VALIDITY OF EMPLOYMENT AGREEMENTS

The employment agreement of an employee covered by the Employment Act and that cannot contain any kind of terms which is less favourable than the minimum set standards stated in the Employment Act. If any of such terms are present in any employment agreement, then these terms will be considered as 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. Hence the employer, therefore, cannot comprise a term that is providing the employee with only six days’ of paid annual leave in the employment agreement

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
  • If an employee, employed for 14 days or more despite to their length of the contract (not the number of days of work)

KETs must be issued within 14 days from the start of employment and that can be issued in soft or hard copy, comprising handwritten.

WHAT MUST THE KETS INCLUDE?

  • Full names of employer and employee
  • Job title, responsibilities and main duties of the employee
  • Commencement date and duration of employment (if the employee is on a fixed-term contract)
  • Working arrangements (working hours and days, and rest days)
  • Salary period (e.g. hourly, weekly or monthly) and basic salary (including the basic rate of pay for hourly, daily or piece-rated workers)
  • Fixed allowance and deductions
  • Overtime payment period (should it vary from the salary period) and overtime rate of pay
  • Remunerations (bonuses, incentives)

OTHER ESSENTIAL EMPLOYMENT TERMS

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

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