Employment and HR

Employment contracts are also referred to as employment agreements, appointment letters, offer letters, and so on. It is a contract that describes the terms and conditions of employment between an employee and an employer. In Singapore, it is best to have a documented employment contract. Typically, only senior management workers may be able to negotiate their employment contracts. A breach of contract occurs when either an employee or an employer violates one or more of the provisions of an employment contract. Several significant terms are included in most employment contracts, including:

The employment contract’s terms and conditions cannot be less favorable than those specified in the Employment Act.

Employee benefits are sometimes known as fringe benefits or perks. Employees are compensated in a variety of ways in addition to their regular salary. In Singapore, employee benefits may include sick leave, annual leave, maternity leave, incentives and bonuses, relocation assistance; healthcare benefits, retirement fund contributions, housing allowance, allowance for children’s education, childcare benefits, transportation reimbursements, and so on.

The Employment Act does not specify the minimum wage that each employee must receive. In other words, there is no set minimum pay and it is negotiated between the company and the employee. The pay, however, must be paid at least once a month within 7 days after the conclusion of the salary period. Overtime compensation, if appropriate, must be paid within 14 days of the wage period’s end date. The Singapore Employment Act makes no mention of bonus payments.

An employee’s wage is plainly determined by the role and abilities necessary. An annual bonus of at least one month’s salary, sometimes known as the 13th month payout, has become customary practice in Singapore. The actual amount of the yearly bonus might vary from employee to employee depending on corporate standards and is usually connected to the employee’s success as well as the firm’s performance. The parameters of the yearly bonus program are usually spelled out in the employee contract. During favorable economic times, it is not unusual for employees in Singapore to get annual bonuses of 2-3 times their monthly income.

The Singapore Employment Act regulates working hours and overtime only for employees earning less than SGD 2,600 per month. Employees who are protected by the Employment Act as described above have the right to work no more than 44 hours per week. Singapore’s Ministry of Manpower has strict legislation governing working hours and overtime circumstances. An employee has the right to work no more than 8 hours per day, or 44 hours per week. Employees cannot work for more than 6 hours without a break, according to the Employment Act. Employees cannot work more than 12 hours a day, including overtime, unless there is an actual or threatened accident, work that is essential to national defense or security, or unexpected circumstances that cause work to be interrupted. Shift employees, on the other hand, are never permitted to work more than 12 hours a day. Employees are entitled to one rest day each week (defined as a non-working day from midnight to midnight), which is not compensated. The maximum permitted time between two rest days is 12 days.

The foregoing Employment Act restrictions do not apply to employees earning more than SGD 2,600 per month, and it is free to be established by agreement between the employee and the company. In Singapore, office personnel often work Monday through Friday, from 9 a.m. to 6 p.m. or 7 p.m., depending on the industry and business rules. It is fairly unusual for Singaporeans to work 9-10 hours each day during the week and a half-day on Saturdays.

Given Singapore’s multiculturalism, public holidays are meant to suit a wide range of ethnic populations. New Year’s Day, Chinese New Year, Good Friday, Labour Day, Vesak Day, National Day, Hari Raya Puasa, Deepavali, Hari Raya Haji, and Christmas Day are just a few examples.

The Employment Act requires the following minimal criteria for employees earning less than SGD 2,600 per month. The employee is entitled to paid time off on public holidays, albeit the stated dates may be substituted by any other day provided both the employer and the employee agree. In the case that a public holiday falls on a Sunday or rest day, the following Monday is considered the paid holiday. Furthermore, if the public holiday happens on a day when the employee is not legally compelled to work, he or she must be paid with an extra day’s salary or an extra day off as a substitute.

The Employment Act makes no provisions for public holidays for employees earning more than SGD 2,600 per month. However, as is usual in Singapore, all employees receive the same public holiday benefit as described above.

The Employment Act specifies the required yearly leave for employees earning less than SGD 2,600 per month. To be eligible for yearly leave, the employee must have worked for the company for at least three months. The quantity of yearly leave depends on the contractual agreement between the employee and your company, but it must be at least 7 days during the first year and 1 extra day for each consecutive year of service. Unless otherwise stipulated in the employment contract, annual leave taken on a half-working day is considered one day’s leave. Unless otherwise specified in the employment agreement, the employee’s annual leave will be forfeited if he or she is fired for misconduct, is absent from work without permission for more than 20% of the working days in a month, or if the leave is not used up within 12 months of every year of continuous service.

In Singapore, it is normal practice to provide all employees with 14 days of annual leave every year, which is far more than the minimum needed by the Singapore Employment Act.

The following are the statutory sick leave benefits for employees earning less than SGD 2,600 per month, as defined in the Employment Act:

The employee must provide a medical certificate from the business doctor (if one has been assigned), a government doctor, or a doctor from an accredited hospital.

Sick leave benefits for all corporate employees in Singapore typically adhere to the Employment Act’s basic criteria, as stated above.

The Employment Act contains no provisions for an employee’s probation term. Employees are often required to undergo a 3-6 month probation term. A shorter termination notice time generally corresponds to the probation period.

There are no regulatory obligations for Singapore companies to give education and training perks to their employees. In general, the Ministry of Manpower encourages firms to offer their employees with chances for training and development in order to increase job competency and potential career progression. The Singapore government also has a number of initiatives in place to help with the expenses of training and skill development.

There is no standard procedure for providing employees with training and skill enhancement perks. It is typically determined by the size of the firm, the type of the business, and the employee category.

Either party may terminate the employment contract by giving the other party written notice or by paying salary in lieu of notice. There is no regulatory requirement for the length of the notice period. The notice time is determined by the employment contract and must be the same for both parties. The employee may use any unused annual leave to balance the notice period. If the other party is in intentional breach of the contract, either party may terminate the employment contract without notice.

It is normal practice to offer two weeks’ notice during the probationary term and one month’s notice following job confirmation. Although the Employment Act states that both parties may pay salary in lieu of notice, Singapore courts have ruled that the employee cannot terminate the contract by surrendering his income in lieu of notice due to the practical problems that the employer faces in such a case.

Under Singapore’s Employment Act, there is no legislative duty to provide private health insurance coverage to employees. Working professionals who are Singapore Citizens or Permanent Residents are automatically supplied with Medishield — a basic grade of insurance protection for all Singaporeans. Contributions to the employee’s retirement fund, known as CPF, include an automatic allocation of a portion of the contribution to the employer’s Medisave account. The Medishield insurance policy assists Medisave account members and their dependents in meeting the costs of care in old age or during critical illnesses. Premiums for Medishield are taken from Medisave accounts.

It is entirely dependent on the employer when it comes to healthcare insurance advantages. In Singapore, most major corporations provide supplemental private medical insurance benefits to their employees, but smaller corporations do not. Employers may wish to offer private healthcare insurance benefits through any of Singapore’s numerous private insurance companies to provide a higher level of healthcare benefits than what is provided under the basic Medshield scheme, as well as to provide medical insurance benefits to Employment Pass holders (i.e. foreign employees).

Female employees who have been with the company for more than three months may be eligible for paid maternity leave. Female employees who are eligible are entitled to a total of 16 weeks of leave. Employers are not permitted to fire any employees who are on maternity leave. Employers must pay maternity leave in full if notice of dismissal is issued without adequate cause within three months of the employee’s confinement. In addition to maternity leave, qualified female employees are entitled to 6 days of childcare leave each year if they have been with the company for more than 3 months and are the parents of a child under the age of 7.

Maternity and childcare leave benefits for firm employees in Singapore typically adhere to the Employment Act’s minimal criteria, as stated above.

Normally, a corporation would retrench in order to cut outgoing money or expenditures or to realign attention in order to become more financially sustainable. Implementation may have beneficial or bad ramifications, which affects both retrenched individuals and those who remain on the job. Although there are a variety of alternative methods for implementing the retrenchment process (such as hiring freezes, salary cuts, and benefit reductions), the most typical method used by businesses is to reduce the workforce through layoffs.

The Singapore Employment Act states that the following general regulations apply to employees earning less than SGD 2,600 per month:

Because retrenchment has negative consequences for the workforce, such as loss of skills, energy, morale, commitment, and physical and mental health degradation as a result of employees withdrawing physically and emotionally, the Ministry of Manpower advises employers to conduct any retrenchment exercise responsibly.

Retrenchment benefits in Singapore are commonly based on the company’s size and financial status. A tiny business may not be able to provide anything above the legislative standards outlined above. To minimize disagreements and confusion, the nature of retrenchment benefits should be included in the employment contract.

CPF is a compulsory retirement savings plan for Singaporeans and Permanent Residents. Employers are required to contribute to the CPF fund for workers who are Singapore citizens or permanent residents. Both the employee and the employer make monthly payments. By the 14th of the following month, the employer is responsible for submitting the monthly payment, which includes both the employer’s and the employee’s respective payments. The employee’s share is then subtracted from the salary. The maximum CPF contribution rate for employers and employees is 16% and 20%, respectively, and can be lower based on criteria such as employee age, permanent residence status, and so on. For foreign employees with an Employment Pass or Work Permit in Singapore, there is no CPF contribution. In typical practice, there is no exception from the statutory requirement for CPF contributions.

Most Singaporean businesses offer non-statutory perks to their employees, ensuring that their staff is well-cared for. Some of the most popular advantages are as follows:

1. Healthcare, well-being, and personal perks — Many Singapore businesses have medical insurance policies that include dependents and often cover personal accident and hospitalization.

2. Per Diem — Many employers pay a per-day stipend, transit allowance, or reimbursement of real expenditures when traveling for travel-related work. The per diem fee is determined by the location to which the employee is traveling.

3. Relocation package – Most organizations pay a relocation stipend to workers who must relocate from their home country to Singapore with their families. A typical expatriate compensation package includes: paid delivery of personal items, paid plane travel, free or subsidized accommodation, payment of energy bills, paid childcare, and paid school tuition for children. Some employees are on “full expat” terms, while others are on “partial expat” terms, and still others are on “full local” terms. It is typical practice to place employees in a serviced apartment or hotel that is paid for by the firm for a set period of time until they can find acceptable housing.

4. Employee stock purchase plans – Some organizations, particularly those with senior management, provide employee stock purchase plans.

5. Additional benefits – Other benefits may include paid corporate memberships, sponsorship of employee training programs and educational courses, restaurant discount vouchers, mobile phone plans, paid gym/club memberships, organizing sporting activities, team parties and outings, staff referral schemes, sabbaticals, and so on.