The essential guide

to HR compliance
in Singapore
Contents
Introduction 04

General overview 06

Basic rights of employees 08

Employment contracts 12

Workplace policies 14

Performance management 16

Termination and dismissal 20

Retirement and re-employment 24

About Employment Hero 26

Disclaimer:
The information in this guide is current as at 1st Aug 2022, and has been prepared by Employment Hero Pty Ltd
(ABN 11 160 047 709) and its related bodies corporate (Employment Hero). The views expressed in this guide are
general information only, are provided in good faith to assist employers and their employees, and should not be
relied on as professional advice. The information is based on data supplied by third parties. While such data is
believed to be accurate, it has not been independently verified and no warranties are given that it is complete,
accurate, up to date or fit for the purpose for which it is required. Employment Hero does not accept responsibility
for any inaccuracy in such data and is not liable for any loss or damages arising either directly or indirectly as a
result of reliance on, use of or inability to use any information provided in this guide. You should undertake your own
research and seek professional advice before making any decisions or relying on the information in this guide.
Introduction Employment law is complex — and as a
small to medium sized business owner
in Singapore, it can be hard keeping a
close eye on compliance and legislative
updates when you already have a long
list of other priorities.
Juggling multiple roles as an entrepreneur We want to see Singaporean businesses
can often leave you strapped for time, in grow and thrive. When your HR is run the
a fast-paced environment where you’re right way, you can avoid time-consuming
constantly working on different tasks. Most and stressful penalties that could jeopardise
entrepreneurs don’t start a business with your business. Proactive HR compliance
the intention of being an employer, but as is important, so you can recognise and
the business scales, HR and employment resolve HR mistakes before they become
compliance becomes a crucial part of serious problems.
business success. If neglected, it will
We’re here to help make things easier for
lead to disastrous consequences.
you, so you can focus on more strategic
As Singapore’s economy recovers from tasks and worry less about compliance.
the pandemic, it is heartening to note that That’s why we’ve put together this
there have been fewer pay and dismissal essential guide of HR compliance tasks.
disputes — but the Ministry of Manpower
Together, we’ll walk through what to
(MOM) is also stepping up enforcement
do and what not to do, so that you can
checks for errant employers, especially
identify and resolve HR concerns before
those hiring workers in vulnerable sectors
they spiral out of control; helping you
under the Progressive Wage Model.
avoid costly litigation fees, settlement
sums, and negative media attention.

4 | The essential guide to HR compliance in Singapore

General overview
Enacted in 1968, the Employment Act
is Singapore’s main labour law and acts
as a source of truth for all things related
to employment in Singapore. It dictates
the basic terms and conditions for
employment under a contract of service
(with some exceptions included).
Other sources of employment law include:
→ Trade Unions Act (1940)
→ Trade Disputes Act (1941)
→ Central Provident Fund Act (1953)
→ Employment Agencies Act (1958)
→ Industrial Relations Act (1960)
→ Employment of Foreign
Manpower Act (1990)
→ Retirement and Re-employment
Act (1993)
→ Child Development Co-Savings Act (2001)
→ Workplace Safety and Health Act (2006)
→ Protection From Harassment Act (2014)
→ Foreign Employees
Dormitories Act (2015)
→ Employment Claims Act (2016)
→ Work Injury Compensation Act (2019)
Employment regulation in Singapore
employs a system of tripartism — which
is essentially cooperation between the
government, employers, and trade unions.
6 | The essential guide to HR compliance in Singapore
The Ministry of Manpower (MOM),
National Trades Union Congress (NTUC) and
Singapore National Employers Federation
(SNEF) collaborate on issues such as fair
employment practices, through bodies
such as the Tripartite Alliance for Fair and
Progressive Employment Practices (TAFEP),
the Singapore Tripartism Forum (STF),
and the National Wages Council (NWC).
Tripartite guidelines regarding the
implementation of employment legislation in
various aspects such as wrongful dismissal,
harassment, and fixed term contracts are
additional resources that employers need to
be familiar with. Whilst these guidelines and
advisories are not legally binding, employers
are strongly encouraged to abide by them,
or else they can face stricter scrutiny by
the Ministry of Manpower, and have their
work pass privileges curtailed or revoked.
The Tripartite Alliance for Dispute
Management (TADM) was also set up
to provide employees and employers
with advisory and mediation services,
to resolve salary-related claims
and employment disputes.
Basic rights of employees
Both local and foreign employees are Managers and executives with a basic
Basic rights
covered by the Employment Act, as monthly salary of more than $4,500
long as they are an employee working were previously not covered by the Rest days Employees should be provided with at least 1 rest day per week —
under a contract of service with an Employment Act. However, after for shift workers, the rest day can be a continuous period of 30 hours.
employer. Employees can be employed amendments were made to the Act in The maximum interval allowed between 2 rest days is 12 days.
on a full-time, part-time, temporary 2019, all employees in Singapore with the
Public holidays Employees are entitled to 11 paid public holidays a year. If they are required to
or contract basis, and be paid hourly, exception of the aforementioned, are
work on a public holiday, the employer should pay the employee an extra day’s
daily, monthly, or by piece-rate. covered for core provisions such as:
salary, or grant them an off day in lieu.
Seafarers, domestic workers, and statutory → Minimum days of annual leave; Annual leave Employees are entitled to paid annual leave if they have worked for their
board employees or civil servants are → Paid public holidays and sick leave; employer for at least 3 months. Their annual leave will be pro-rated if they’ve
not covered under the Employment worked between 3 to 12 months.
→ Timely payment of salary; and
Act. The terms and conditions of their
→ Statutory protection against An employee’s annual leave entitlement depends on their years of service with
employment will be according to their
wrongful dismissal. their employer. It starts from 7 days during the first year of service, 8 days for
employment contract instead.
two years of service, 9 days for three years of service, and so on.
Sick leave Employees are entitled to paid outpatient sick leave and paid hospitalisation
Here’s an overview of the basic rights of employees in Singapore: leave if they are covered under the Employment Act and have served their
employer for at least 3 months.
Basic rights The full entitlement is 60 days of paid hospitalisation leave —
inclusive of 14 days for paid outpatient sick leave.
Working hours Contractual working hours are the hours that employers and
employees have agreed to in the contract of service. Maternity leave Working mothers are entitled to either 16 weeks of government-paid maternity
leave or 12 weeks of maternity leave, depending on whether the child is a
For common work arrangements, the contractual hours of work* are:
Singapore citizen and other criteria.
→ If you work 5 days or less a week — up to 9 hours a day or 44 hours a week
Paternity leave Eligible working fathers, including those who are self-employed, are entitled
→ If you work more than 5 days a week — up to 8 hours a day or 44 hours a week
to 2 weeks of paid paternity leave.
For other work arrangements, the contractual hours of work* are:
Shared Eligible working fathers can also apply to share up to 4 weeks of their wife’s 16
→ If you work less than 44 hours every alternate week — up to 48 hours
parental leave weeks of Government-Paid Maternity Leave, subject to their wife’s agreement.
a week, but capped at 88 hours in any continuous 2-week period
Childcare leave Eligible working parents of Singapore citizen children are entitled to 6 days
→ If you work shifts of up to 12 hours a day — up to an average
of 44 hours over a continuous 3-week period of paid childcare leave per year. Parents of non-citizens can get 2 days of
*These guidelines apply only to those covered under Part IV of the Employment Act (does not cover managers and executives).
childcare leave a year.
Unpaid Eligible working parents are entitled to 6 days of unpaid infant care leave a
Overtime pay Employees can claim overtime if they are:
childcare leave year, if the child is a Singapore citizen.
→ A non-workman earning up to $2,600; or
→ A workman earning up to $4,500. Salary Salary must be paid at least once a month, and within 7 days after the end of
For overtime work, employers must pay employees at least 1.5 times the the salary period. There are exceptions for overtime, resignation without notice
hourly basic rate of pay — and payment must be made within 14 days and other situations. Employers must also issue itemised pay slips to employees.
after the last day of the salary period.

8 | The essential guide to HR compliance in Singapore

 Basic rights

CPF Singaporean citizens and Singapore permanent residents

contributions are entitled to CPF contributions from their employer.
Employers are required to make two contributions to
an employees’ CPF account every month:
→ Employee’s contribution: deducted from their salary; and
→ Employer’s contribution: a fixed percentage of the employee’s
wage, provided on top of their existing salary.
If your employee is earning more than $500 per month, you’re permitted
to deduct the employee’s share of mandatory CPF contributions from their
wages — but rates will be lower for those earning between $500 to $750.
The CPF contribution rates are not fixed for everyone — they are dependent
on an employee’s age, and their permanent resident status (if applicable).
Work injury Employers are required to buy work injury compensation insurance
compensation for both local and foreign employees, if they are:
insurance → Doing manual work, regardless of salary level; or
→ Doing non-manual work and earning a salary of $2,600 or less a
month, excluding any overtime payment, bonus payment, annual wage
supplement, productivity incentive payment and any allowance.
If your employee doesn’t fall under any of the above categories, you have
the flexibility to decide whether you want to purchase insurance for them.
If your employees make a valid claim however, you will have to compensate
them regardless of whether they are insured.
It’s also important to note that you must buy or renew your insurance policy
from the list of designated insurers, and your policies must comply with
MOM’s compulsory terms.

Quinn’s Hero Tip

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10 | The essential guide to HR compliance in Singapore

Employment contracts
In general, Singapore follows a
freedom-of-contract approach.
Both employers and employees are free
to include whatever terms they wish in a
contract, provided that these terms are not
illegal. They should however, be compliant
with the requirements outlined by the
Employment Act if the employee is
covered by it.
Under the Act, as an employer you
must have a written contract of service
that defines the employer-employee
relationship, including the terms
and conditions of employment.
12 | The essential guide to HR compliance in Singapore
The contract must include key employment
terms (KETs) and essential clauses, such as:
1. Full name of employer and employee;
2. Job title, main duties and responsibilities;
3. Commencement date of employment;
4. Duration of employment (if employee
is on fixed term contract);
5. Working arrangements such as
daily hours of work, number of
working days per week, rest days;
6. Remuneration (salary period, basic
salary or basic rate of pay for those
paid by hour, day, or by piece);
7. Fixed allowances/deductions;
8. Overtime payment period and
overtime rate of pay;
9. Bonuses and incentives;
10. Type of leave (annual leave,
sick leave, hospitalisation leave,
maternity leave, childcare leave);
11. Insurance, medical benefits
and dental benefits;
12. Probation period (if any);
13. Termination of contract,
notice period; and
14. Place of work (optional).
You may choose to include restraint of
trade clauses, such as non-compete
clauses and non-solicitation clauses in
employment contracts (to protect trade
secrets and prevent poaching of employees/
clients), or impose penalties for contractual
breaches such as breaking a bond.
However, take note to not use unreasonable
or unfair clauses in an employment
contract which cannot be justified.
Contract of service vs As defined by the Ministry of Manpower,
contract for service a contract of service is an agreement
between an employer and an employee;
Knowing the differences between these
whereas a contract for service refers
two types of contracts is important, when
to an independent contractor, such
it comes to legal liability as an employer
as a self-employed person or vendor,
or service-buyer. Errant companies
who is engaged for a fee to carry
who have misclassified their workers
out an assignment or project.
will be subject to warnings and late
payment fees amongst other things.
In summary, the main differences are:
Contract of service Contract for service
Has an employer-employee relationship Has a client-contractor type of relationship
Employee does business for the employer Contractors carry out business on
their own account
May be covered by the Employment Not covered by the Employment Act
Act (depending on eligibility)
Includes terms of employment such as Statutory benefits do not apply
working hours, leave benefits, etc
Contractors spend their money buying all
Employers usually provide the employee with
necessary work equipment and tools, and
the necessary tools,equipment, and work gear.
other assets. They also incur running costs.
Employer must maintain employee records such Contractors manage their own documents.
as employees’ employment contracts, wages,
timesheets, and holidays and leave records.
Employers are obliged to contribute Contractors manage their own
to employees’ CPF accounts. CPF contributions.
Businesses should follow the Tripartite Standard on Contracting with Self-Employed Persons (SEPs)
when writing and documenting a contract for service with SEPs, to ensure clarity in the
expectations and conduct of the relationship. This will also come in handy should there
be any payment disputes that arise.
Workplace policies
Workplace policies are a critical aspect of
your employment toolkit — they help you
articulate your organisation’s mission and
values, and set the standard for expected
employee behaviour and performance.
They also help to provide a decision-
making framework, so you can ensure
integrity and fairness when issues arise,
as well as minimise legal, financial, and
safety risks for you and your business.
A policy is only effective if properly
communicated and uniformly enforced to
all employees. Ensure that your employees
are aware of the policies, understand how
to comply with it, and the consequences
if they breach it. Make sure employees
sign off on each policy, acknowledging
that they understand it completely.
Some workplace policies that you may
consider for your business include:
→ Code of Conduct
→ Health and Safety Policy
→ Recruitment Policy
→ Digital Policy
→ Alcohol and Drug Policy
→ Discrimination, Bullying and
Harassment Policy
→ Use of Internet and Social Media Policy
→ Grievance Handling Policy
→ Leave Policy
→ Performance Management Policy
→ Discipline and Termination Policy
→ Working From Home Policy
→ Social Functions Policy
Where necessary, you can also choose
to issue a non-disclosure agreement
(NDA) to employees. Known as
confidentiality agreements, they help
to protect a company’s data and ability
to maintain a competitive advantage.
A legally binding contract between a
provider and recipient of confidential
material, knowledge, or information, NDAs
allow businesses to work on innovative
ideas and processes without letting them
fall into the hands of their competitors.
They should typically include
essential terms like:
→ Scope of agreement
→ Obligations of signatories
→ Duration

Should you wish to terminate an employee → Prohibition against assignment

for breaching a workplace policy, it’s
essential that there’s evidence to prove
that the employee was aware of the
policy but did not comply with it.
→ Limitation of liability
Quinn’s Hero Tip
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sitting down to write all these policies can
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Customise them to your business and send
them out to all your staff with one click.

Your policies should apply to all employees

and be easily accessible at any time.With
the Employment Hero platform, you can
easily add them to an employee’s profile
during the onboarding process. They can
then view it and acknowledge it in their
own free time.

14 | The essential guide to HR compliance in Singapore

Performance
management
Performance management is a key aspect
of employment. It helps to ensure that your
employees are producing their best work,
in order to help you grow your business.

Through the use of formal appraisals, regular

feedback, and identification of training
and development needs, a performance
management system helps employees
tackle challenges, and also contribute
more effectively towards business goals.

The Tripartite Guidelines require

you to do the following to ensure
that you are a fair employer:

Develop measurable standards for

evaluating job performance;
Review your criteria regularly to check
against discrimination;
 ocument and keep all performance
D
reviews for at least one year (this will
help you appraise objectively during
the next appraisal);
 et up an internal appeal process to
S
address employees’ questions or
concerns on their appraisals; and
Communicate posting and training
opportunities to all eligible employees.

16 | The essential guide to HR compliance in Singapore

 Performance improvement plan
(PIP)
According to the Tripartite Guidelines on
Wrongful Dismissal, when poor performance
is cited as the reason for the dismissal,
the employer bears the burden of proving
that ground for dismissal. The dismissal is
considered wrongful if the employer is
unable to do so. That is why a performance
improvement plan is often put in place as
a last resort, to prove that the employer
had no choice but to dismiss the employee
due to poor performance.
A performance improvement plan is a
management tool used when an employee
is deemed to be severely underperforming
in their role. It usually comes into play
only when warning letters have proven
to be ineffective. However, it should
be used as a commitment to help the
employee improve, and not for a biased
or frustrated manager to kickstart the
termination process of an employee.
HR will get involved to determine whether
a PIP is an appropriate response to the
current situation, and if so, will administer
all PIP reviews together with the manager
to prevent any bias. HR should also be
providing guidance to both managers and
employees throughout the entire duration
of the PIP process.
Having a PIP benefits both employers
and employees, by ensuring that there
is clarity and transparency regarding an
employee’s responsibilities, expectations,
and the potential consequences
of persistent underperformance
— which includes dismissal.
18 | The essential guide to HR compliance in Singapore
PIPs usually last for 3 months with regular
reviews but can be extended further if
deemed necessary. How to kickstart a
performance improvement plan you ask?
Here are some steps to guide you:
1. Identify the areas of improvement
that need to be addressed
What are the key reasons that necessitate
a PIP? Is it something that can be
corrected with additional training? Or is
it quantifiable goals that can be reached
with practical steps — like sales targets?
2. Create a draft plan
The manager involved should create a draft
plan, outlining SMART goals (specific and
measurable objectives that are achievable,
relevant and time-bound). The plan should
also dictate a reasonable timeframe to reach
these goals, and outline what the company
will do to assist the employee, such as
providing additional resources or training.
It should also detail how often reviews
will be conducted — usually weekly, but
depends on the circumstances. The
consequences of not reaching these
goals should also be stated clearly so the
employee is aware, such as a demotion,
transfer, or termination of contract.
3. HR to review the draft plan 6. Conclusion of the PIP
Once the draft plan is complete, HR should As the PIP draws to a close, employers
review it to ensure that it is not unfairly biased need to evaluate the progress thus far and
against the employee. The performance determine the outcome. If the employee
issues should be clearly pointed out and has met the objectives, made significant
well-substantiated, the timeframe and improvements and maintained a positive
objectives should be reasonable, and the attitude throughout the PIP, they should
employee should be given the proper tools be allowed to continue employment.
and training to succeed. The plan needs However, if the employee’s performance
to be attainable and not unreachable. does not improve, or even worsens, that
a possible reassignment, demotion, or
4. Implementation of the PIP termination should be considered.
It’s probably up top in the list of most If the employee has been committed
painful meetings, but once the plan is towards improving but falls slightly short
complete, it is crucial to communicate it of the objectives, you can also provide
to the employee, and ensure that both the the option of extending the PIP.
manager and employee are committed
to making it work. Any feedback from
the employee should be listened to, and
changes should be made if necessary,
before submitting it to HR for a final review.
Once HR has reviewed any changes, both the
manager and employee should sign off on
the final plan and HR should be given a copy.
5. Progression of the PIP
Throughout the duration of the PIP, all
progress meetings should be held as
scheduled. Any relevant progress should
be documented and discussed, and
it’s crucial to identify if improvements
have or have not been made.
Employees should be encouraged to lead
these meetings, so they can give an accurate
assessment of how they are doing, any
realisations they have, and where else they
may need help or guidance to succeed.
Termination and dismissal
Either the employer or employee
can terminate a contract of service,
and termination happens when:
→ The employee resigns;
→ The employer dismisses
the employee; or
→ The contract terms have expired.
Both parties must follow the terms and
conditions for termination as stated in
the contract of service, with regards to
notice periods and compensation.
Take note that employers are unable
to reject a resignation. Employees
can choose to resign at any time, by
serving their notice period or by paying
compensation in lieu of notice.
Termination with notice
A termination letter is mandatory and must
be in writing. The length of the notice
period must be the same for both the
employer and employee, and as agreed
according to the employment contract.
However, if the notice period is not stated in
the employment contract, the notice period
required will depend on the employee’s
length of service. Both parties may also
mutually agree to waive the notice period,
but this should be done in writing.
Employers are also required to make
CPF contributions during an employee’s
notice period, as they are still considered
employees of the company.
20 | The essential guide to HR compliance in Singapore
Termination without notice
Employers and employees may terminate
a contract without serving a notice
period — you will just have to pay the
other party compensation in lieu of
notice. This is equivalent to the salary
that an employee would have earned
during the required notice period.
Termination without notice can
happen in situations when:
→ Terms of employment have been
breached (e.g salary not paid).
→ Employees are absent from work
without notice/cause/approval.
→ Terms and conditions of work have
been changed without consent.
Termination due to
employee misconduct
If the termination of an employee’s
contract is due to misconduct,
employers must hold a formal inquiry
before taking any disciplinary action.
According to the Ministry of Manpower,
there is no fixed procedure you need to
follow for an inquiry, but as a general guide:
→ The employee should be told of
their alleged misconduct.
→ The employee should have the
opportunity to present their case.
→ The person hearing the inquiry
should not be in a position
which may suggest bias.
In accordance with the Employment Act, Wrongful dismissal
employers may suspend the employee
Whilst valid reasons for dismissal
from work during an inquiry but you
include misconduct, poor performance,
cannot suspend your employee for more
or redundancy, employees can file a
than 1 week without the Commissioner
wrongful dismissal claim with the Tripartite
for Labour’s approval. Also, you have
Alliance for Dispute Management
to pay your employee at least half their
(TADM) if they feel otherwise.
salary during their suspension period.
Employees may feel that they were unfairly
If you need more than 1 week to complete
dismissed without just or sufficient cause
the inquiry, you will have to seek the
— hence it is important for employers
Commissioner for Labour’s approval at
to refer to the Tripartite Guidelines on
least 3 working days before the end of the
Wrongful Dismissal to ensure that they
1 week suspension. You will also be required
uphold fair employment practices.
to explain the reason behind the extension,
and it will have to include the following: For managers and executives who were
dismissed with notice or salary in lieu
→ Description of the alleged misconduct;
of notice, they can only file a wrongful
→ Reasons for the extended inquiry;
dismissal claim if they have served the
→ Salary amount payable to the
employee during suspension; and
employer for at least 6 months.
→ Estimated end date of the inquiry.
If no misconduct is found, employers
are required to restore the full
salary (that was withheld during the
suspension period) to the employee.
However, if the inquiry establishes
misconduct, employers can either:
→ Instantly downgrade the employee;
→ Instantly suspend the employee
from work without pay, for
not more than 1 week; or
→ Terminate employment without
notice, and no salary in lieu
of notice will be paid.
 Case guidance
Employee misconduct: Resolving
misunderstandings in dismissal claims
Background:
Janet* (not her real name) received not one,
but three warning letters all at once and was
then dismissed from her post as a beauty
consultant on the same day. She believed
it could be due to a heated argument she
had with a colleague a few days prior.
She emailed her employer, Mr Teo and
requested to discuss the incident further
but was turned down. She felt that she
was getting punished while her colleague
received no punitive action, and was
aggrieved by the perceived injustice.
The fact that an inquiry into her actions
was conducted the same day she
was dismissed made her feel that her
dismissal was unjust. Though she wanted
to explain herself further about the
incident, she did not raise the matter
again with her boss, and approached
the Tripartite Alliance for Dispute
Management (TADM) to seek recourse.
TADM intervention:
The TADM mediator listened to both parties
— Janet voiced her grievances while Mr
Teo, the employer, voiced his concerns and
unhappiness over Janet’s work performance
and confrontational attitude. He explained
that the dismissal was not premised on the
argument she had with her colleague, but
the fact that the argument had disrupted
the shop’s operations. Mr Teo also shared
that the company had dismissed the other
employee who was involved in the argument.
22 | The essential guide to HR compliance in Singapore
While Janet’s behaviour might be
tantamount to misconduct, the mediator
highlighted to the company that it was only
right for Janet to be given an opportunity
to explain herself, prior to the company’s
decision to dismiss her. Janet should
have been issued with warning letters as
soon as the conflict with her colleague
was brought to the attention of the
company, to give Janet the opportunity
to take steps to improve herself.
Issuing the three warning letters all at
once and dismissing her on the same day
deprived her of the opportunity to change.
The company agreed that they could
have managed the situation better and
committed to improving their practices.
When Janet found out that she was not the
only one who had been dismissed because
of the argument, she felt relieved that she
was not singled out and unfairly dismissed.
Outcome:
Mr Teo acknowledged that he could have
handled the dismissal better and offered a
goodwill ex-gratia payment to Janet.
In order not to jeopardise her future job
search in Singapore, Mr Teo also retracted
the termination letter to allow Janet to resign
from service. Janet accepted the outcome
and decided to move on from the episode.
The dispute was thus resolved amicably.
Retirement and
re-employment
In accordance with the Retirement
and Re-employment Act (RRA), the
minimum retirement age is 63 years.
Employers cannot ask employees
to retire before that age, or dismiss
employees based on their age.

Employees are protected by the Act if

they are a Singapore citizen or permanent
resident, and if they’ve joined the business
before they turned 55 years old.

Employees are supposed to retire on the

day they turn 63 years old. Nevertheless,
employers must offer re-employment to
eligible employees who turn 63, up until
they turn 68 years old. This is part of the
Singaporean government’s efforts to help
older workers who wish to continue working,
as long as they are willing and able.

As an employer, if an employee is eligible

for re-employment but you are unable to
offer them a position, then you must:

→ Transfer the re-employment

obligation to another employer with
the employee’s agreement; or
→ Offer the employee a one-off
Employment Assistance Payment
(a payment equivalent to 3.5 months’
salary, subject to a minimum of
$6,250 and maximum of $14,750).

24 | The essential guide to HR compliance in Singapore

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