In Singapore, the Employment Act 1968 governs employment law alongside common law, which has developed principles and precedents based on cases heard in court.

The Employment Act is the baseline for the responsibilities and rights between employers and employees, and a contract of employment can develop or enhance these at the employer’s discretion. However, it cannot dip below the minimum statutory line.

Employment contracts contain duties and responsibilities for both the employer and the employee so that a breach can occur on either side.

The employer’s obligations and duties in a contract of employment

Understanding where a potential breach of contract by an employer can occur involves being familiar  with the duties and obligations placed on an employer by the Employment Act 1968 and other relevant legislation. Here are the key areas:

Essential contractual terms

The employer must include certain key things in the employment contract under Section 95A of the Act. They include the employee’s primary duties and responsibilities, working hours, leave entitlement, salary, and any other benefits, plus how to terminate the contract with a defined notice period.

A safe place to work

The Workplace Safety and Health Act governs the legal basis for providing a healthy and safe workplace. The requirements will differ according to the specific nature of the job – a factory floor would have vastly different needs to an office environment.

Freedom from discrimination

Employees must be able to work without discrimination. The requirements for this are set out in the Tripartite Guidelines on Fair Employment Practices.

Freedom from harassment

The Protection from Harassment Act protects employers from harassing employees in the workplace. This includes insulting, abusing, and threatening them, overt actions, and other more insidious behaviour.

Terminating employment and dismissal

Section 14 of the Employment Act states that an employer may not dismiss employees without just cause or excuse.

Breach of contract by the employer

An employer can breach their employment contract in many ways, essentially by failing to meet one of the duties or responsibilities required by their own agreement and/or the law.

Non-payment of salaries

Non-payment of salaries or wages is one of the most frequent employer breaches and contravenes Section 13 of the 1968 Employment Act, Part 3.

Non-payment of salaries can land an employer with a fine ranging from S$3,000 to S$15,000 or 6 months in prison, or both. These penalties are for a first offence; fines and prison terms are much more severe for repeat offences.

A disgruntled employee does not have a specific remedy under Section 13 of the statute, but they have different options for redress. They can leave without notice seven days from the due salary date if payment is not forthcoming. However, this is not always a realistic option unless other work is readily available.

An alternative is to file a salary-related claim with the Tripartite Alliance for Dispute Management (TADM). The maximum an employee can claim via this route is S$20,000, which may be non-payment of salary, overtime, or bonuses. The TADM offer mediation services to help resolve disputes amicably.

Wrongful dismissal

Wrongful dismissal is terminating an employee’s contract without just cause and can be with or without notice. It also includes forcing employees to resign.

There should always be a proper enquiry before dismissal, and the reason must be valid. Even if an employee has done something amounting to gross misconduct, a proper investigation must be held before dismissal.

Failure to observe the correct processes can land an employer in hot water, even if the reason for dismissal is valid. Failing to provide a reason or substantiate the dismissal can amount to wrongful dismissal.

Typical scenarios for wrongful dismissal include discriminating against an employee because of their race, religion, gender, age, or effectively forcing them to resign by withholding an employee right, such as maternity leave.

It’s always worth an employee seeking to resolve the situation with the employer as a first resort, as this may avoid the problem from developing beyond the point of no return.

Employees can also seek mediation through the TADM. If they are union members, the union will usually assist. If mediation via the TADM is successful, the settlement agreement issued as a result can be binding.

If mediation is unsuccessful, employees can claim with the Employment Claims Tribunal. The ECT has the power to order the employer to reinstate the employee and pay any salary due from the date of wrongful dismissal to the reinstatement date. Compensation is an alternative to reinstatement.

Employees who suspect they were dismissed because of their age can also appeal to the Ministry of Manpower (MOM) within one month of the dismissal.

Discrimination, harassment, and safety

Sometimes, employee issues fall outside their specific employment contract, but the law protects them when the employer fails to comply with their duties and gives them the right to redress in certain situations.

Discrimination and harassment claims are dealt with by the Tripartite Alliance for Fair & Progressive Employment Practices (TAFEP). They will investigate an issue on behalf of an employee.

Harassment can be an offence under the Protection from Harassment Act. An employee can seek a Protection Order against the employer or take the matter to the civil courts to claim compensation.

If the workplace is unsafe and an employee is injured, the Work Injury Compensation Act (WICA) allows employees to claim via the Ministry of Manpower (MOM). This is an alternative to pursuing a claim through the civil courts; an employee cannot do both.

Breach of employment contract by the employee

What happens when an employee breaches their contract of employment depends on exactly which term or terms they have breached.

A lesser breach may simply be the subject of a formal warning or disciplinary process, but a more serious breach which amounts to misconduct may allow the employer to dismiss the employee pretty much instantly.

Any breach must be fully and properly investigated by the employer so that outcomes are fair and transparent. This includes a breach which potentially amounts to misconduct. Otherwise, an employer runs the risk of later receiving a claim for unfair or wrongful dismissal.

It can make it easier for the employer to manage these situations if the employment agreement includes protocols for a potential breach of contract by the employee. These can be annexed in a separate document but referred to in the main contract.

Final thoughts on breach of employment contract

Employers and employees have a right to redress if the other party breaches the contract term, and employment disputes are more common than you might think. It’s always worth seeking legal advice from an experienced employment lawyer to protect your position and avoid taking the wrong step, whether you are an employee or an employer. It’s not always necessary to resort to litigation; quicker and less stressful alternatives like mediation are often available to resolve a breach of an employment contract.

This content was written and reviewed by a lawyer but it does not constitute legal advice. We always recommend engaging a lawyer before taking any legal action.

Frequently asked questions

Does the Employment Act 1968 govern all classes of employees?

No, not all types of employees fall under the remit of the Act, and the exceptions are domestic workers, seafarers, civil servants, and statutory board employees. The relationship with their employer is governed solely by their employment contract.

What are the most common breaches of contract by an employer?

The most common contractual breaches by an employer involve unlawful or wrongful dismissal or non-payment of salaries. Sometimes, the employer may have been justified in removing the employee but have failed to follow the correct protocols and procedures, leading to a claim for unfair or wrongful dismissal.

How can an employee claim for an injury sustained at work?

The Work Injury Compensation Act (WICA) allow employees to claim for work-related injuries via the Ministry of Manpower, so they don’t need to start a claim in the civil courts.

Employees can choose one route or the other. If they start an action in the civil courts, they cannot pursue a claim under the WICA.