21 June, 2016
The Ministry of Manpower (MOM) and its tripartite partners, the Singapore National Employers Federation (SNEF) and the National Trades Union Congress (NTUC), have issued Guidelines on the Employment of Term Contract Employees (Guidelines).
Generally, term contract employees refer to individuals who are on fixed-term contracts of employment that will terminate upon the expiry of a specific term unless the contracts are renewed. Term contract employees are typically hired for jobs that are available only a temporary or project basis.
A. Granting of leave benefits to term contract employees with long term working relationship
Currently, term contract employees are entitled to leave benefits under the Employment Act (Cap. 91) and the Child Development Co-Savings Act (Cap. 38A) if these employees meet certain criteria, including being continuously employed for at least 3 months.
However, some term contract employees who have been working for the same employer for a long period of time do not enjoy leave benefits as their term contracts are shorter than the minimum service period of 3 months and are renewed with a break in between the contracts. Hence, the renewed contracts are deemed to not have been on a continuous basis. The Guidelines encourage employers to do the following:
grant or accrue leave benefits for contracts of 14 days or more: treat term contracts renewed within one month of the previous contract as continuous, and accordingly, grant or accrue leave benefits based on the cumulative term of the term contracts; or
pro-rate annual leave, sick leave and child-care leave benefits: prorate the various forms of leave based on the length of the term contract. More information as to how pro-rated leave is calculated can be found here.
B. Notifying in advance of intention not to renew term contract
The Guidelines further provide that, for work arrangements involving multiple renewals of term contracts, it is “good practice” for both the employer and the term contract employee to give “sufficient notice” before the contract’s expiry on whether either party wishes to renew the contract.
The Guidelines state that generally, employers and employees may mutually agree on the notice period for early contract termination. In the absence of such an agreement, the notice period should be as follows:
|
Length of cumulative employment |
Notice period |
|---|---|
|
Less than 26 weeks |
1 day |
|
26 weeks to less than 2 years |
1 week |
|
2 years to less than 5 years |
2 weeks |
|
5 years and above |
4 weeks |
While the Guidelines are not strictly legally binding on employers in Singapore, they may signal increased regulatory scrutiny of term contracts going forward. MOM has recognised the importance of term contract employees, who form a significant 11.3% of Singapore’s resident workforce, and stated that the tripartite partners will “actively promote” the adoption of these practices.
Combined with the Employment Act amendments introduced in April 2016 that require employers to provide written key employment terms to employees, these Guidelines will likely provide term contract employees greater clarity and transparency on their leave benefits and notice periods.
For details, please see the Guidelines.
For further information, please contact:
Chong Kin Lim, Director, Drew & Napier
chongkin.lim@drewnapier.com
