Employment Law Regime
Singapore employment law is largely governed by the Employment Act (EA) and other related laws and regulations. The EA outlines basic employment terms and conditions such as working hours, rest days, public holidays, sick leave, and annual leave entitlements.
Employment Classification and Contracts
In Singapore, there are two types of employees:
Workmen (defined under the EA)
Non-workmen
A “workman” is an employee who performs manual labor, is employed in a supervisory or technical role, or is a driver or operator of a vehicle. Non-workmen are employees who perform administrative, executive, or professional roles.
Employment Contracts
In Singapore, an employment contract can be either written or verbal, although it is advisable to have a written contract to avoid disputes. Under the EA, employers are required to provide employees with a written key employment terms (KETs) within 14 days of their start date. KETs include information such as job title, salary, working hours, leave entitlements, and notice period.
Permanent employees are those engaged in a continuous employment relationship with no fixed end date. Casual employees are those engaged on an ad hoc basis for a specific period or project. Fixed-term employees are those engaged for a specific period with a fixed end date.
Holiday’s in Singapore
Singapore has 11 public holidays:
New Year’s Day
Chinese New Year
Good Friday
Labour Day
Vesak Day
Hari Raya Puasa
National Day
Hari Raya Haji
Deepavali
Christmas Day
Boxing Day
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Termination of Employment
Severance
Notice Period
Employers are required to provide written notice to employees before terminating their contracts, the length of which depends on the employee’s length of service:
Less than 26 weeks of service: No notice required
26 weeks to less than 2 years of service: 1 week’s notice
2 years to less than 5 years of service: 2 weeks’ notice
5 years or more of service: 4 weeks’ notice
Severance Benefits
Employees who have worked for at least 2 years are entitled to severance pay if they are dismissed for reasons other than misconduct or poor performance. The amount of severance pay depends on the employee’s length of service and salary, up to a maximum of 25 weeks’ salary. Additionally, employees who have worked for at least 3 years are entitled to receive gratuity pay upon termination, which is calculated as half a month’s salary for each year of service.
Central Provident Fund (CPF)
The Central Provident Fund (CPF) is a compulsory savings scheme for all employees and self-employed individuals in Singapore. Both employers and employees are required to contribute a percentage of the employee’s salary into the CPF, with the employer’s contribution being higher than the employee’s. The contribution rates vary based on the employee’s age and salary. CPF contributions can be used to fund retirement, healthcare, and housing needs.
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