Key takeaways:

KETs must be issued within 14 days of employment.
Mandatory terms include salary, working hours, leave, and termination conditions.
Additional clauses such as confidentiality, non-compete, and flexible work arrangements

Help align contracts with corporate best practices.

Regular contract updates ensure compliance with Singapore labour laws.

Introduction to Key Employment Terms (KETs)

A well-structured employment contract is essential for establishing a clear, legally compliant, and fair working relationship between employers and employees. In Singapore, the Ministry of Manpower (MOM) requires employers to provide Key Employment Terms (KETs) in writing to employees within 14 days of employment.

KETs define the essential terms of employment, ensuring transparency and preventing misunderstandings or disputes. For HR professionals, drafting employment contracts that align with both legal requirements and market best practices is crucial for workforce management.

This guide covers the mandatory employment terms under Singapore labor law and additional clauses that are common in corporate practice, helping businesses create comprehensive and enforceable contracts.

Essential Components of KETs

When drafting an employment contract, employers must include the following legally required KETs:

Basic Employment Details

Every employment contract should begin with:

Employer & Employee Information – The full legal names of both parties.
Job Title & Description – A summary of the employee’s responsibilities, reporting structure, and key performance expectations.
Start Date & Duration – Whether the role is permanent, contract-based, or temporary. For contract roles, the end date and renewal terms should be clearly stated.

Salary & Compensation

Compensation is a crucial component of employment terms. Employers must specify:

Basic Salary & Payment Frequency – Whether the salary is paid monthly, bi-weekly, or otherwise.
Overtime Pay – If applicable, include details of overtime rates and eligibility, in line with MOM regulations.
Bonus & Incentive Structures – Performance-based bonuses, commissions, and stock options (if applicable).

A clear salary structure reduces misunderstandings and ensures compliance with Singapore’s Employment Act and sectoral wage requirements.

Working Hours & Leave Entitlements

Employers must define:

Standard Working Hours & Rest Days – MOM regulations state that standard working hours should not exceed 44 hours per week.
Annual Leave & Sick Leave – The minimum annual leave entitlement starts at 7 days and increases with service. Sick leave and hospitalization leave must also follow MOM guidelines.
Parental Leave & Other Special Leave – Maternity, paternity, childcare, and compassionate leave provisions, in accordance with Singapore’s statutory entitlements.

Medical Benefits

Employers should clearly outline the medical benefits provided to employees, including:

Outpatient medical consultation coverage – Whether medical consultation fees at general practitioners (GPs) or specialists are reimbursed or covered under company insurance.
Hospitalization coverage – Details on inpatient care, surgical expenses, and whether coverage extends to dependents.
Medical insurance – If the company provides group health insurance, specify the policy details and coverage limits.
Work-related injury coverage – Compliance with the Work Injury Compensation Act (WICA), which mandates compensation for medical leave and treatment arising from workplace injuries.
Reimbursement policies – If employees need to pay medical costs upfront, outline the process for submitting claims and reimbursement timelines.

Clearly defining medical benefits helps ensure employees understand their entitlements and reduces disputes over healthcare claims.

Termination & Notice Period

To protect both employer and employee, contracts should clearly state:

Probation Period – Standard durations are 3-6 months, with performance evaluations before confirmation.
Notice Period – One month is common for junior roles, while two months is typical for managerial and senior-level positions.
Garden Leave Clause – Employers may place employees on garden leave, restricting them from work-related activities during the notice period while still receiving full pay.

These clauses prevent disputes and ensure smooth workforce transitions.

Additional Clauses Based on Market Practices

Beyond the mandatory KETs, many employers include additional contractual clauses to safeguard business interests and align with corporate policies.

Confidentiality & Non-Disclosure Agreements (NDA)

To protect sensitive business information, employment contracts often include:

A non-disclosure agreement (NDA), preventing employees from sharing confidential data with external parties.
A data protection clause, ensuring compliance with Singapore’s Personal Data Protection Act (PDPA).

Non-Compete & Restrictive Covenants

Some companies restrict former employees from joining direct competitors within a specific time frame and geographical region after leaving the company.

Common restrictive periods: 6 to 12 months post-employment.
Enforceability: Must be reasonable in scope, duration, and industry relevance.

Intellectual Property (IP) Rights

Clarifies that any work, invention, or creation produced during employment belongs to the company.
Particularly relevant for industries such as technology, research, and creative sectors.

Training & Bond Period (if applicable)

For employees who undergo company-sponsored training or certification programs, a bond clause may be included:

States that employees must remain in service for a minimum period after receiving training.
Requires employees to reimburse training costs if they leave before the bond period ends.

Code of Conduct & Workplace Policies

To maintain workplace professionalism, contracts may reference:

The company’s employee handbook, which details expected behaviour, disciplinary procedures, and workplace ethics.
Social media guidelines, regulating employees’ online conduct in relation to the company.

Including these terms ensures compliance with corporate governance standards.

Flexible Work Arrangements (FWA)

As remote work and hybrid models become more common, companies are including flexible work arrangements (FWAs) in employment contracts, such as:

Work-from-home (WFH) policies.
Staggered work hours for better work-life balance.
Compressed workweeks or part-time arrangements.

These align with the Tripartite Guidelines on Flexible Work Arrangements, ensuring clear expectations for both employees and employers.

Best Practices for Drafting Employment Contracts

Use Clear, Jargon-Free Language

Contracts should be legally binding but also easy to understand. Avoid complex legal jargon that employees may struggle to interpret.

Customize for Different Employee Types

Tailor contracts to different employment types (full-time, part-time, contract-based, or remote workers) rather than using a one-size-fits-all template.

Regularly Review & Update Contracts

Employment contracts should be reviewed periodically to reflect changes in labour laws, corporate policies, and industry trends.

Conclusion

A well-drafted employment contract incorporating both MOM’s KETs and industry best practices sets the foundation for a fair, legally compliant, and transparent employer-employee relationship.