Benefits of Having an Employment Contract
Over time the need to have a written employment contract has become a necessity. In the past employers and employees used to make verbal agreements concerning the rights and obligation of their employment relationship.
Since verbal agreements are difficult to prove, these days, contract of service are preserved in a written documents known as the “Employment Contract”. This document categorically states the terms and conditions that govern the employer and employee. In the event of dispute between the two parties, this written contract becomes evidence tat can be used in court to settle such disagreements. Furthermore, since job descriptions are not as simplistic as in the past, verbal conversations governing an employers / employee relationship will not prove as effective as a written contract.
The employment contract not only allows for certainty, it also allows for any collective agreement that an employer would want to negotiate with other employees of the organization. In addition where disciplinary procedures are drafted within the employment contract, it serves a two- fold purpose in that firstly, the employer can only enforces these particular procedures and secondly it also ensures that the employer does not take advantage of any statutory provisions or for that matter exploit his or her employee.
The benefits of documenting terms and conditions into an employment contract is that it provides for certainty and protection to both parties alike. Any variation in the agreement can be added to the document so that employment contract permits flexibility.
Basically the general principle of contract law applies to all and any employment contract. Before an employment contract is effectively concluded there could be several prior negotiations. An advertisement in the news paper or job website like about a pending job offer does not constitute an offer as it only operates as an "Invitation to treat". This means a party can enter negotiation to take up the offer but at this point it is not legally binding.
Interviews are held to further negotiations. Employers at interviews are only assessing the applicant as a potential candidate for the position. There may be a second or even a third interview and at this point still nothing is legally binding. Perhaps a final interview, there may be discussions held on terms and conditions, remuneration and other benefits. It is still a point of negotiation. If the employer soon thereafter offers the job to the potential candidate, it still does not bind the candidate as he or she would counter- offer by asking for a higher remuneration.
If the employer accepts these terms, an offer can be made on such terms and if the candidate accepts then there is an intention to create legal relations. A contract for employment may be verbally concluded at this juncture. It is at this point of appointment that the potential employee usually receives his employment contract stating all the terms and conditions agreed upon the negotiation stage.
If both parties agree to the terms and conditions in the employment contract they will subsequently sign the document constituting the agreement. Then for the agreed number of years or indefinitely, this document will govern the employment relationship.
One of the crucial elements for entering an employment contract is that parties must have the legal capacity to enter the contract. Examples where there is no such legal capacity if either party dies, is of unsound mind or falls sick so that the contract cannot be fulfilled. Under the Employment Act of Singapore, a person who is a minor (below the age of 21) can enter into a binding employment contract provided only if the person is qualified for the particular job description. For an illustration, an unqualified 18 year old cannot be employed as nurse in a hospital purely because he or she lacks the legal capacity to do so.
Tags: permit, singapore
Interested to set up a business in Singapore? We can help with your Singapore company formation.
