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The employment relationship

Country specific laws

What laws and regulations govern the employment relationship?

Employment law in Singapore is predominantly governed by the Employment Act, which prescribes certain minimum employment conditions. Other legislation specific to particular aspects of employment in Singapore include:

  • the Employment of Foreign Manpower Act;
  • the Industrial Relations Act;
  • the Trade Unions Act;
  • the Retirement and Re-employment Act;
  • the Child Development Co-savings Act;
  • the Central Provident Fund Act; and
  • the Holidays Act. 

In addition, the Tripartite Alliance for Fair and Progressive Employment Practices issues guidelines on best employment practices periodically.

Who do these cover, including categories of worker?

The Employment Act covers all employees, regardless of nationality, except:

  • seafarers;
  • domestic workers;
  • government employees; or
  • persons employed in a managerial or executive position who earn over S$4,500 a month.

Part IV of the act, which sets rest days, hours of work and other conditions of service, applies only to:

  • workers who are engaged in manual labour and earn a maximum basic salary of $4,500 a month; and
  • other employees who earn a maximum basic salary of S$2,500 a month.

The applicability of other legislation varies depending on factors such as age, gender, nationality and trade union membership.

Misclassification

Are there specific rules regarding employee/contractor classification?

An ‘employee’ is a person who has a contract of service under which work is carried out under the control of an employer.

A ‘contractor’ has been generally classified as a self-employed person with his or her own business who is in a position to achieve a profit or loss.

Contracts

Must an employment contract be in writing?

The provision of a written employment contract is not a legal requirement in Singapore, although it is strongly recommended.

However, an employer must provide details of key employment terms in writing to all employees covered by the Employment Act who are contracted to work for more than 14 days. Key employment terms include:

  • hours of work;
  • salary details;
  • overtime pay;
  • notice period; and
  • leave entitlement.

Are any terms implied into employment contracts?

Case law has established that an implied duty of mutual trust and confidence exists between an employer and an employee, defined as “a portmanteau, general obligation not to engage in conduct likely to undermine the trust and confidence required if the employment relationship is to continue”.

Employees also have a duty of good faith and fidelity towards their employers and to use reasonable care and skill in the performance of their duties.

The minimum terms and conditions prescribed under Singaporean labour law also apply to employees covered by that legislation.

Are mandatory arbitration/dispute resolution agreements enforceable?

Case law has established that arbitration and dispute resolution agreements are enforceable in Singapore. However, the use of such agreements is optional.

How can employers make changes to existing employment agreements?

Any change to the fundamental terms and conditions of an employment contract should be made with the mutual consent of the employer and employee and be documented in writing. Some employment contracts may allow the employer to change the terms of the agreement unilaterally, but this is generally limited to administrative (ie, non-fundamental) terms or internal policies and procedures. Where consent is required, the employer will be unable to proceed with the proposed changes without the employee’s consent.

Foreign workers

Is a distinction drawn between local and foreign workers?

The Employment Act makes no distinction between local and foreign workers and provides protection to all employees under its scope. However, certain benefits are available only to Singaporean citizens or permanent residents. For example, maternity, adoption, childcare and paternity leave benefits under the Child Development Co-Savings Act are granted only to employees whose children are Singaporean citizens, subject to other qualifying criteria. Further, only Singaporean citizens and permanent residents can participate in the Central Provident Fund (Singapore’s national pension scheme) and receive their employer’s co-contributions into their fund accounts. 

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