Employment Act – Who does it cover?
An Employment Contract is an agreement by which an employer agrees to employ another as his employee and the employee in turn agrees to serve his employer. Generally, rights and obligations of employers and employees are governed by the Employment Act but the following persons are excluded from coverage under the Act:-
- Persons who are PMEs i.e. in professional, managerial or executive positions earning a monthly salary of more than S$4,500.00;
- Domestic workers; and
- Persons employed by a Statutory Board or the Government.
Employee or Independent Contractor?
Unlike a contract of service or an employment contract, a contract for service (i.e. independent contractor) does not create an employer-employee relationship. This person is usually self-employed and provides his services on an adhoc basis for a fee. Examples of such contracts for service are a taxi or Uber driver, a free-lance IT consultant or an insurance agent. An independent contractor would not be entitled to the usual benefits accorded to an employee unless the contract for service provides for them.
When an employer makes the working environment so unpleasant that an employee is unable to reasonably continue his employment, this is a fundamental breach of the employment contract. The employee is entitled to treat the contract as repudiated, to leave his employment and to claim for damages on top of any other monies due to him. Examples of such working conditions include non-payment of salary or harmful working conditions.
Many employment contracts have restrictive clauses to prevent an employee from working in the same trade or joining a business rival for a period of time after his employment. The validity of such clauses depends on whether the employer has any legitimate interests justifying protection, and whether such clauses are reasonable in all the circumstances including the area, scope and period of restraint.
There are implied terms of loyalty and confidentiality owed by an employee in most normal employment contracts. Hence, an employer may claim against an employee who diverts his clients to his own side business, or if the employee secretly downloads the employer’s customer database and solicits patronage of such customers for himself, or if the employee breaks his bond and fails to serve out his fixed term employment contract.
How We Can Help You
- Vet your employment contract;
- Provide advice on employment law matters;
- Draft employment contracts to prevent any disputes; and
- Represent you in Court to advocate your claims.
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