Employment contract Singapore are not optional for most employers, and the Employment Act sets minimum standards that override any contract terms below that floor. Our team has reviewed employment contracts from Singapore SMEs that included probation clauses removing sick leave entitlement, notice periods shorter than the Employment Act minimum, and commission structures that created unlawful deductions when targets were missed. Every one of those clauses was void the moment it was signed. The contract cannot take away what the Act gives. What it can do is add to the Act’s minimums, clarify discretionary terms, and create the written record that protects both parties when disputes arise.
Employment Contract Singapore
- Employers must provide a written Key Employment Terms (KETs) document to employees covered by the Employment Act. This must be issued within 14 days of the employee starting work (Source: MOM).
- KETs apply to employees hired on contracts of 14 days or more: Part-time employees are also covered.
- The Employment Act is the floor: Any contract term that gives the employee fewer rights than the Act provides is void. The contract can exceed but not undercut the Act.
- Probation periods are not defined by the Employment Act: The length and conditions of probation are contractual. However, Employment Act protections (sick leave, annual leave, notice) apply from day one of employment, not from the end of probation.
- A verbal contract is still a contract: Singapore courts have recognised verbal employment agreements. However, without written terms, disputes are decided on the balance of evidence, which typically disadvantages the employer.
What Must Be in the KETs Document
MOM requires employers to provide Key Employment Terms in writing to employees covered by the Employment Act. The KETs document is not the full employment contract but is the minimum written documentation required.
Mandatory KETs content:
| Category | Required information |
|---|---|
| Identification | Full name of employer and employee |
| Employment details | Job title, main duties, start date |
| Working hours | Daily hours, rest days |
| Salary | Basic salary, payment date, salary period |
| Leave | Annual leave entitlement, sick leave entitlement |
| Medical benefits | Any medical benefits provided |
| Probation period | Duration if applicable |
| Notice period | Notice required by both parties |
| Other terms | Shift work arrangements, overtime requirements if applicable |
(Source: MOM)
The KETs document is the minimum. Most Singapore employers include additional terms in a full employment contract: confidentiality obligations, restraint of trade, IP assignment, and performance review processes.
Employment Act Minimums That Override Contract Terms
The following Employment Act minimums cannot be contracted out of, regardless of what the contract says:
Notice periods (minimum):
- Less than 26 weeks of service: 1 day
- 26 weeks to less than 2 years: 1 week
- 2 years to less than 5 years: 2 weeks
- 5 years or more: 4 weeks
Annual leave (minimum after completing 3 months of service):
- Year 1: 7 days
- Year 2: 8 days
- Increases by 1 day per year up to a maximum of 14 days
Sick leave (minimum):
- Outpatient: 5 to 14 days per year based on service
- Hospitalisation: 15 to 60 days per year based on service
Probation does not suspend these entitlements. A clause stating “no sick leave during probation” is void under the Employment Act.
Source: MOM, https://www.mom.gov.sg/employment-practices/employment-act
Common Employment Contract Clauses and Their Limits
Singapore employers commonly include several discretionary clauses that have specific legal limits:
Restraint of trade (non-compete): Courts in Singapore assess these clauses on reasonableness. A clause preventing an employee from working in the same industry for 2 years across Southeast Asia is likely unenforceable. A 6-month restriction limited to direct competitors in Singapore is more likely to be upheld. The clause must protect a legitimate business interest and be proportionate.
IP assignment: All work created in the course of employment belongs to the employer by default under the Copyright Act. An IP assignment clause adds clarity and extends this to IP created outside work hours using company resources. We recommend including a clear clause rather than relying on the default.
Confidentiality: Enforceable without a specific clause under equity law in Singapore, but a written clause makes the obligation clear and supports enforcement action.
Commission and variable pay: Variable pay terms must not result in total pay falling below the Employment Act’s payment requirements. Commission structures that create clawbacks, reducing the previous month’s salary below what was already paid, can constitute unlawful deductions.
Probation Period Considerations
Probation periods in Singapore are entirely contractual. The Employment Act does not define or regulate probation duration. Common practice is 3 to 6 months for professional roles.
During probation:
- All Employment Act protections apply from day one
- The employer can terminate with the shorter contractual probation notice (e.g., 1 week) if specified
- If no probation notice period is specified, the standard Employment Act or contractual notice applies
- Sick leave accrues, but entitlement to take it starts after 3 months of service
A probation extension clause is acceptable if it includes a defined maximum extension period. An indefinite probation clause is problematic and likely unenforceable.
“The most common expensive employment contract mistake in Singapore SMEs is a clause copied from an overseas template: ‘Employment at will.’ This does not exist in Singapore law. Notice periods are mandatory. An at-will clause does not make notice optional.”
Frequently Asked Questions
Is an employment contract legally required in Singapore?
A written employment contract is not strictly required by Singapore law for all employees. However, employers must provide written Key Employment Terms (KETs) to employees covered by the Employment Act within 14 days of starting work. In practice, a full written contract that incorporates the KETs is standard and provides far stronger protection for both parties than the minimum KETs document.
Can a Singapore employer change employment contract terms unilaterally?
No. Changing material employment terms requires the employee’s consent. Unilaterally reducing salary, changing notice periods, or removing benefits is a breach of contract. MOM can investigate complaints about unilateral contract changes that reduce Employment Act entitlements. Employers who want to change terms must discuss with the employee, get agreement, and issue an updated contract or written variation.
What is the difference between a contract of service and a contract for service in Singapore?
A contract of service is an employment relationship. The person is an employee, covered by the Employment Act. A service contract is an independent contractor relationship. The contractor is not covered by the Employment Act, does not receive CPF contributions, and is not entitled to leave. Misclassifying employees as contractors to avoid Employment Act obligations is a serious compliance risk and can result in MOM enforcement action.
Can Singapore employers include a fixed-term contract that prevents the employee from resigning?
No. Employees can always resign by giving the contractually required notice. A fixed-term contract sets the expected end date but does not prevent resignation. If the employee resigns before the end of the fixed term without serving notice, the employer can claim damages equal to the notice pay the employee would have been entitled to receive. The employer cannot force the employee to continue working.
How should Singapore employers handle contract amendments for existing employees?
Issue a written variation letter that specifies the existing term being changed, the new term, and the effective date. Have the employee sign to confirm acceptance. File the signed variation with the original contract. An email exchange can also constitute a valid written amendment if both parties clearly agree to the new terms.
Conclusion
Employment contracts in Singapore must meet the KETs requirements, respect Employment Act minimums, and avoid clauses that are void by operation of law. The practical risk is not the clauses that are clearly illegal. It is the clauses that look reasonable but do not survive a dispute: vague probation extension terms, commission structures that create unlawful deductions, restraint clauses that are unenforceable but still create confusion. A clean, Singapore-specific employment contract template that has been reviewed against current Employment Act requirements is the starting point. HR software that generates employment documentation from compliant templates reduces the drafting risk at each new hire.
Tipsoi’s HR platform includes employment contract generation and KETs documentation for Singapore employers. Get a quote. Download Tipsoi’s Singapore Employment Contract Checklist for a drafting guide.