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Drafting Employment Contracts

An Employment Contract or Contract of Service is an agreement between the employer and employee including the terms and conditions of employment. Employees under a contract of service may also be covered by the Employment Act in Singapore.

What is an employment contract?

Employment Contract safeguards the employees' rights and ensures fair treatment during the employment period. Your contract cannot be less favourable if your employee is protected under the labour laws and you cannot refuse the employee protection. On the other hand, if your employee does not fall under any of the labour laws or regulations, all the rights and obligations of the employee are those set out in the Employment Contract.

In the agreement, the employment terms and conditions are always defined clearly but they can generally be negotiated between the employer and employee provided that the terms are not illegal. And there are labour laws that must be aware of as they govern the statutory terms of employment when you are drafting the Letter of Offer, Job Offer Letter or Employment Contract.


What are the essential terms of an Employment Contract?


Most of the employment contracts include the following important areas:



Full name of employer and employee


Commencement of employment


Duration of employment


Job title, main duties and responsibilities


Working hours and rest days


Probation period; if any


Basic salary, allowances, deductions, CPF Contribution


Overtime payment period (if applicable) and overtime rate of pay (if applicable)


Types of leave (e.g. sick leave, annual leave, maternity leave)


Other medical benefits (e.g. insurance, medical, dental)


Termination of contract (notice period)


Code of conduct (punctuality, no fighting at work)

For more information, please refer to the Guide to Written Key Employment Terms and Itemised Payslips and Sample Employment Contract from MOM.

Who is covered by the Employment Act?


The Singapore Employment Act protects all employees, both local and foreign workers, working in Singapore under a contract of service with an employer.

An employee is protected by the Employment Act if employed under any of the following terms:

  • Full-time

  • Part-time

  • Temporary

  • Under contract


Note: an employee working less than 35 hours a week is considered a part-time worker and is covered by the Employment of Part-Time Employees Regulations.

However, these employees are not covered by the Act:

  • Seafarers;

  • Domestic workers;

  • Statutory board employees or civil servants

An employee can be paid on the following basis:

  • Hourly

  • Daily

  • Monthly

  • Piece-rated

Ministry of Manpower (MOM) provides a comprehensive guide including the rights of an employee who is covered under the Act. Thus, the employer must ensure that the Employment Agreement complies with the minimum standards prescribed in the Act.

If you are hiring a foreign employee, it is a must to obtain a work pass (employment pass or work permit) before this employee starts work. Moreover, the employer must pay monthly levies for certain classes of foreign employees. And there are quotas imposed by law limiting the number of foreign employees employed by an employer.

A good Employment Contract not only helps you attract more talents to the company but also protects the company's rights. Although you may be able to draft an Employment Contract with some available templates, you should get a professional's helping hands! The HR experts will ensure your Employment Contracts' terms and conditions to be tight and competitive enough and their advice on your employees' rights and obligations must be valuable.


How PACC Minimal can help You?


We understand the importance of a well-defined Employment Contract. With our years of experiences dealing with different employment cases and special situations, we would love to assist you in drafting the best suited Employment Contract or Letter of Offer for your business.

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