Employment and HR

In Singapore, employment relationships are primarily governed by the Employment Act, which outlines the key rights and obligations of employers and employees. This law provides protections in areas such as working hours, salary, rest days, overtime, and other statutory benefits, including leave entitlements.

In addition to the Employment Act, other relevant laws include the Central Provident Fund (CPF) Act, which mandates contributions to the CPF for retirement, housing, and healthcare purposes. Employers are also required to adhere to the Workplace Safety and Health Act, which ensures that employees work in a safe and healthy environment, and the Employment of Foreign Manpower Act, which regulates the hiring of foreign workers in Singapore. Furthermore, the Trade Unions Act and the Industrial Relations Act protect workers’ rights to organize and engage in collective bargaining.Employers must ensure that they comply with these regulations to avoid legal issues and maintain a fair working environment.

When hiring employees in Singapore, businesses must ensure that several key documents are prepared to comply with legal requirements and protect both the employer and the employee. These documents include:

Having these documents in place ensures that the hiring process is legally sound and helps avoid potential disputes in the future.

An employment contract in Singapore should clearly define the terms of the employment relationship to prevent misunderstandings. It must cover essential aspects such as the job title, responsibilities, salary structure, benefits, working hours, and other employment terms. Additionally, the contract should outline the notice period required for termination and any conditions for early termination by either party, ensuring clarity on the termination process.

For positions involving sensitive information, confidentiality clauses are crucial to protect the employer’s intellectual property. Employers may also include a non-compete clause, which restricts employees from engaging in competitive activities after leaving the company. The contract should specify the employee’s eligibility for statutory benefits, including paid leave, sick leave, and Central Provident Fund (CPF) contributions. These provisions ensure both parties are fully aware of their rights and obligations

Under Singapore’s Employment Act, employees are entitled to a range of statutory benefits designed to support their well-being. These include paid annual leave, with a minimum of 7 days per year after one year of service, and paid sick leave, with 14 days for employees who have worked for more than 3 months or up to 60 days if hospitalized. Employees are also entitled to 11 paid public holidays annually, and if they work on a public holiday, they must receive either a substitute day off or additional pay.

Female employees are entitled to 16 weeks of paid maternity leave, provided they meet the eligibility criteria. Male employees are entitled to 2 days of paternity leave, and parents can access childcare leave for children under the age of 7. Additionally, employees benefit from contributions to the Central Provident Fund (CPF), a mandatory savings scheme designed for retirement, healthcare, and housing purposes. These benefits ensure that employees are supported throughout their employment and beyond. For more details, refer to Singapore’s Employment Act.

The Central Provident Fund (CPF) is a compulsory savings scheme that ensures financial stability for Singaporeans and permanent residents, particularly in retirement. Contributions are made monthly by both employers and employees and are allocated into various accounts for specific purposes, such as housing, retirement, and medical expenses. This table outlines the essential details of how CPF works and the responsibilities of both parties.

When terminating an employee in Singapore, employers must adhere to legal procedures to avoid potential claims of unfair dismissal. The Employment Act outlines the required notice period based on the length of the employee’s service. If the contract does not specify a notice period, the statutory notice period will apply. Employers and employees can mutually agree to terminate the contract without notice, but this often involves compensating the employee for the lack of notice. Termination can be based on various grounds, such as misconduct, poor performance, or redundancy.

For termination due to misconduct or poor performance, employers are required to conduct a fair investigation and provide the employee an opportunity to respond. In cases of redundancy, employers must follow specific guidelines and may be required to offer compensation. Employees who feel they have been unfairly dismissed can file a claim with the Employment Claims Tribunals (ECT). To minimize the risk of disputes, employers should document all reasons for termination and ensure compliance with legal requirements. For further guidance, refer to Singapore’s Employment Act.

While not legally required, having an Employee Handbook is a best practice for businesses in Singapore. It provides employees with clear guidelines on company policies, workplace rules, and expected behavior. The handbook can cover a variety of topics, including:

Foreign companies can hire employees in Singapore without needing to establish a local entity, but they must comply with local regulations. This includes ensuring that employees hold the correct work passes, such as the Employment Pass, S Pass, or Work Permit, depending on the role and salary. Companies must also register with the Inland Revenue Authority of Singapore (IRAS) to comply with tax regulations. Additionally, foreign businesses must ensure that their Singaporean employees receive the required Central Provident Fund (CPF) contributions. It’s important for foreign employers to understand these obligations to avoid penalties and ensure compliance with local labor laws. Proper documentation and timely registration are key steps in the process.

Even though a foreign company can hire employees in Singapore without establishing a local entity, it must still comply with all regulatory requirements. This includes securing the necessary work permits for employees and ensuring that they meet Singapore’s employment standards. The company must also make appropriate contributions to the Central Provident Fund (CPF) as part of the employee’s benefits. Additionally, the employment relationship must adhere to Singapore’s labor laws, which cover working hours, compensation, and other employee rights. Non-compliance with these regulations could result in legal penalties or complications. For more information on employment regulations in Singapore, visit the Ministry of Manpower’s official website.

To hire foreign employees in Singapore, businesses must ensure that they hold the appropriate work pass issued by the Ministry of Manpower (MOM). The Employment Pass (EP) is for foreign professionals in managerial, executive, or specialized roles, requiring a minimum salary. The S Pass is for mid-skilled workers with a lower salary threshold, while the Work Permit applies to semi-skilled and low-skilled workers in industries like construction, manufacturing, and services. For entrepreneurs looking to start a business, the EntrePass is available to foreign nationals wishing to establish and operate their own company.

Companies must ensure that all foreign employees have valid work passes before employment begins. This involves verifying the employee’s work pass status and ensuring all required documentation is in order. Businesses must comply with the regulations set by the Ministry of Manpower to avoid penalties or legal issues. Failure to verify work passes properly can result in fines, penalties, or legal action against the employer. It is crucial for companies to stay up to date with any changes in work pass policies. Employers are also responsible for ensuring that the work passes remain valid throughout the employee’s tenure. For more detailed information about work passes.

Navigating employment law in Singapore can be complex, but understanding key legal requirements and having the right documentation in place is crucial for both employers and employees. By adhering to the Employment Act, ensuring proper CPF contributions, and providing clear employment contracts and employee handbooks, businesses can foster a fair and compliant workplace. Whether you’re hiring local talent or foreign workers, staying informed about work pass regulations, statutory benefits, and termination procedures will help protect your business and employees from legal issues. For companies looking to ensure compliance and avoid costly disputes, Themis Partner offers expert legal services in drafting and reviewing employment contracts and HR documentation, guiding you through every step of the employment process. By working with professionals, you can focus on growing your business with confidence, knowing that your legal foundation is solid and well-managed.