Union leaders, union members, bros and sisters.
Let me first of all welcome everyone to this seminar.
1. This is the second in a three part series of collaboration between the NTUC and The Law Society of Singapore under our flagship programme called “Law Awareness and U”. We did one in February this year and the third seminar will be held on 23 September this year.
2. The topic that we are dealing with today is on “Understanding Your Employment Contract”. Knowing what are their rights and obligations under the employment contract is important for workers so that they do not end up in costly law suits which they can ill afford to pay. From my discussions with workers, my sense is that not all of them know very much about their legal position under the law. This is particularly so for those who are not covered under the Employment Act which applies to rank and file workers.
3. Even for those covered under the Employment Act, what the law provides is not always very legible to them. For example, section 14(1) of the Employment Act provides that an employer may after due enquiry dismiss without notice an employee employed by him on the grounds of misconduct inconsistent with the fulfillment of the express or implied conditions of his service..”. To an employee, this provision is confusing. He probably can understand what are the express terms of his contract, i.e., those terms that are expressly provided for, but what are the implied conditions of service which were never discussed but yet which he is expected to comply with?
4. For PMETs, who are completely governed by their employment contracts, knowing what are their obligations and rights are even more crucial so as to save them a lot of grief later on if they are sued by their employers for breach of contract. Most often, we do not bother with what is written in our contracts unless and until something happens to us then we start scrambling for our employment letter. For example, executives assume that they will be automatically paid compensation when they are retrenched. But this is not the case as they are so entitled only if this is provided under their employment contract unless they are represented by the union which has a legal right to represent them on retrenchment benefits. In addition, the terms of our employment contract are found not only in our letter of appointment but also in employee handbooks and other reference materials that could be referred to in our employment letter.
5. An increasingly common term of employment that we now find in many contracts is the restrictive covenants or anti-competition clauses that seek to restrict an employee’s right to work for a competitor or to set up business in the same line as the employer after he or she leaves employment. Restrictive covenants actually create post-termination obligations where an employee is made to agree not to do certain things after he/she leaves the company. They are designed to protect the employer’s business but often the covenants are so wide that they affect an individual’s ability to work and make a living in the industry in which they are experienced and in which they have developed a specific set of skills.
6. Recently, I came across one which restricts a security officer who had resigned from a company from working on assignments in her next job which she had done when she was working for the first company. This is extremely restrictive as being a rank and file employee she has no access to the clients or customers of her former employer except merely to work wherever she was assigned. Although we know that restrictive covenants which are unreasonable are not enforceable, nevertheless such a term cost a great deal of apprehension and anxiety to her especially when she received a notice reminding her of the restriction and the consequences for failing to comply. The dilemma is clear. To comply with it, she has to lose her job. In this context, such restrictive covenants are neither fair nor reasonable.
7. One objective of this seminar is to raise awareness about such practices and to educate workers on their rights. The rule is to read your contract very carefully before signing. Also, never sign a contract with unreasonable or unfavourable terms that may affect your ability to earn a living in future. But not everyone has that option as some employers do adopt a take it or leave it attitude making it very difficult for job seekers to reject particularly during such difficult times.
8. We also want to take this opportunity to educate employers as well and urge them to be reasonable and fair in whatever terms of employment that they impose. They should not take advantage of the unequal bargaining position that people find themselves in particularly when they are engaged by big companies with vast resources to have such contracts legally drawn up by lawyers. At the end of the day, it all boils down to corporate social responsibility and fair and responsible employment practices. Companies have a legitimate right to protect their business but at the same time they should not do so in a manner which prevents people form earning a living.
9. Also, instead of using such restrictive covenants as a way of making people continue to work for them, companies should be more creative in offering attractive career development paths, competitive remuneration packages and a supportive workplace environment that will motivate and encourage people to stay. Other than restrictive covenants, this seminar also seeks to highlight other issues related to the contract of employment which most employees may not be aware of.
10. I hope that you will find this seminar useful and contribute in some way to a better understanding of your contract of employment. Finally, please do not forget to attend our next seminar which is on the Work Injury Compensation Act and the Common Law Tort of Negligence on 23 Sept in the same place.
Happy National Day. Thank you.
