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January 27, 2015

With the setting-up of the Small Claims Employment Tribunal and the upcoming mandatory requirement for key employment terms to be in written form, it is a good time to take another look at the essential points of an employment contract! 
- Koh C-u Pinn, Arielle Law Corporation

4 Key Things To Look Out For In An Employment Contract

1. Check for the Key Employment Terms (KETs)

From 1 April 2016, all employers are required to issue Key Employment Terms in writing to employees covered under the Employment Act.

The terms below should be included in your employment contracts, unless the item does not apply:
  1. Full name of employer
  2. Full name of employee
  3. Job title, main duties and responsibilities
  4. Start date of employment
  5. Duration of employment (supposing a fixed-term contract)
  6. Working arrangements, such as:
    1. Daily working hours
    2. Number of working days per week
    3. Rest day
  7. Salary Period
  8. Basic salary, or basic rate of pay for part-time workers
  9. Fixed allowances and deductions
  10. Overtime rate of pay
  11. Bonuses and incentives
  12. Types of leave
  13. Medical Benefits
  14. Probation Period
  15. Notice Period
These are key but basic terms, and describe the basic conditions for employment.

2. Confidentiality Agreement

In modern employment practice, most companies will either include a confidentiality clause in employment contracts, or have a separate confidentiality agreement that employees have to sign. This is increasingly relevant in the modern world, where content and data take on greater economic importance.

Confidentiality agreements or clauses should specify the types of information that should be kept confidential. User data, code for software, customer databases, and supplier lists are examples of such information. To make the agreement or clause more effective, the circumstances under which the confidential information can be used should be listed, while prohibiting disclosure under other circumstances. 

3. Restriction of Trade Clauses

It is also common to add Restriction of Trade clauses in the employment agreement. These clauses restrict your ex-employees from working for competitors or otherwise competing in the same industry upon termination of the employment agreement. 

These clauses have to be seen as "reasonable" in order to be effective. Factors to consider include the duration of the restriction, its geographical limit, and the position of the employee. For example, restriction of trade clauses are more likely to be unreasonable in the case of a junior employee who does not have much access to company data.

4. Compliance with the Personal Data Protection Act

Since the Personal Data Protection Act came into force, companies are obliged to inform employees on the collection, use, and disclosure of employees' personal data, and to seek their consent before doing so. A good place to seek employees' consent would be in the employment contract.

There are exceptions to the need for employee consent, such as the use of employee personal data for evaluative purposes, and for managing and terminating the employment relationship. 

Even where consent of employees is not needed, employers may have to notify the employees of the use of their personal data. This is the case where the personal data of employees is used for managing and terminating the employment relationship.

Hence, it is best to include information about your policy for protecting employee personal data in the employment contract. 

A well thought-out employment contract is not just a piece of paper. It reflects a well-organised business with a culture is that more attractive to talented employees.

Koh C-u Pinn Picture
Koh C-u Pinn is a director at Arielle Law Corporation, a boutique law firm that provides individualized services tailored specifically to your needs. 

Simply email us at, or give us a call at (+65) 6268-8963 to chat with us about your needs. We are always happy to discuss what works best for you, whether over email, the phone, or a freshly brewed cup of coffee.
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