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Employment Agreement
I need a junior employment agreement for a graduate with 1 year of industry experience, who will engage in a rotational program to identify expertise aligning with their skillsets. The agreement should include statutory leave, exclude stock options, and specify a 6-month probation period with a 1-week notice, transitioning to a 1-month notice period thereafter.
What is an Employment Agreement?
An Employment Agreement is a legally binding contract between an employer and employee in Singapore that spells out the key terms of their working relationship. It covers essential details like salary, job duties, working hours, leave entitlements, and notice periods for ending employment.
Under Singapore's Employment Act, employers must provide written terms of employment within 14 days of starting work. A well-crafted agreement protects both parties by clearly stating their rights and obligations, helping prevent disputes and ensuring compliance with local labor laws. It can also include special terms like confidentiality clauses, non-compete restrictions, and performance-based incentives.
When should you use an Employment Agreement?
Create an Employment Agreement before any new hire starts work in Singapore - ideally during the final recruitment stage. This timing lets both parties review and agree on key terms before making commitments. For senior roles or positions with access to sensitive information, having the agreement ready during salary negotiations helps protect company interests.
Many employers rush to draft agreements only after problems arise, but this reactive approach creates risks. Early implementation helps ensure compliance with the Employment Act, sets clear expectations about duties and benefits, and provides legal protection for intellectual property and confidential information. It's especially crucial when offering unique compensation packages or specialized roles.
What are the different types of Employment Agreement?
- Startup Employment Agreement: Tailored for early-stage companies, focusing on equity compensation and flexible roles
- Binding Employment Agreement: Standard comprehensive contract with robust enforceability provisions for permanent staff
- Dual Employment Agreement: For employees working across multiple entities or roles within the same organization
- Amended And Restated Employment Agreement: Updates existing contracts after role changes or promotions
- Driver Employment Agreement: Specialized for transport workers with vehicle operation terms and safety requirements
Who should typically use an Employment Agreement?
- Employers/Companies: Draft and issue Employment Agreements to protect business interests, set expectations, and ensure legal compliance with Singapore labor laws
- HR Managers: Customize agreement templates, manage documentation, and oversee the signing process for new hires
- Legal Counsel: Review and refine agreement terms, ensure enforceability, and advise on specific clauses for different roles
- Employees: Review, negotiate, and sign agreements before starting work, gaining clarity on their rights and obligations
- MOM Officials: Reference these agreements when mediating employment disputes or investigating workplace compliance issues
How do you write an Employment Agreement?
- Basic Details: Gather employee name, NRIC/FIN, job title, start date, work location, and reporting structure
- Compensation Package: Document salary, bonuses, benefits, CPF contributions, and any performance-based incentives
- Job Scope: Define key responsibilities, working hours, overtime policies, and performance metrics
- Company Policies: Include leave entitlements, notice periods, confidentiality requirements, and code of conduct
- Special Terms: Note any probation period, non-compete clauses, or intellectual property rights
- Documentation: Prepare two copies for signing, ensure compliance with Employment Act requirements
What should be included in an Employment Agreement?
- Parties & Position: Full legal names of employer and employee, job title, and reporting structure
- Employment Terms: Start date, work location, hours, probation period, and job scope as per Employment Act
- Compensation Details: Basic salary, allowances, bonuses, CPF contributions, and payment schedule
- Leave Benefits: Annual, medical, maternity/paternity leave entitlements per statutory requirements
- Termination Clauses: Notice periods, grounds for termination, and post-employment obligations
- Confidentiality: Protection of company information, intellectual property rights, and data privacy compliance
- Governing Law: Explicit reference to Singapore law and jurisdiction
What's the difference between an Employment Agreement and an Advisory Agreement?
An Employment Agreement differs significantly from an Advisory Agreement in several key aspects, though both regulate professional relationships. The main distinctions lie in the nature of engagement, obligations, and legal protections offered under Singapore law.
- Employment Status: Employment Agreements create employer-employee relationships with CPF obligations and statutory benefits, while Advisory Agreements establish independent contractor relationships without these requirements
- Control and Supervision: Employment Agreements grant employers direct control over work methods and schedules; Advisory Agreements allow advisors to work autonomously
- Benefits and Protection: Employment Agreements must include statutory benefits under the Employment Act; Advisory Agreements typically exclude such benefits
- Duration and Commitment: Employment Agreements usually indicate ongoing, regular work arrangements; Advisory Agreements often cover specific projects or periodic consultations
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