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Contract employee for a consultancy with penalty for breaking contract - advice

Posted: Tue, 29 Jan 2019 1:22 pm
by opunsoars
Hi folks.

I am an Indian working for a company (A) via a consultancy (B) payroll contract. B is an employment agency consultancy. They basically help share headcount for A by putting people like me on a contract. My contract is for 1 year while the conditions for breaking the contract are:
  • 1. 2 months notice period
  • 2. AND 1 month's salary as penalty
I have found a better job offer and would like to switch. But these conditions seem ridiculous. Some of my friends (and even my potential new employer) told me to approach Ministry of Manpower to confirm if this is legal.

Please advice. Hoping to get fruitful answers from the forum as always.

Re: Contract employee for a consultancy with penalty for breaking contract - advice

Posted: Tue, 29 Jan 2019 2:20 pm
by singaporeflyer
opunsoars wrote:Hi folks.

I am an Indian working for a company (A) via a consultancy (B) payroll contract. B is an employment agency consultancy. They basically help share headcount for A by putting people like me on a contract. My contract is for 1 year while the conditions for breaking the contract are:
  • 1. 2 months notice period
  • 2. AND 1 month's salary as penalty
I have found a better job offer and would like to switch. But these conditions seem ridiculous. Some of my friends (and even my potential new employer) told me to approach Ministry of Manpower to confirm if this is legal.

Please advice. Hoping to get fruitful answers from the forum as always.
Contract looks OK. No issues. If you were not comfortable with the contract, in the first place you should not have signed it.

Re: Contract employee for a consultancy with penalty for breaking contract - advice

Posted: Tue, 29 Jan 2019 2:58 pm
by opunsoars
singaporeflyer wrote: Contract looks OK. No issues. If you were not comfortable with the contract, in the first place you should not have signed it.
Yes I understand the onus of having signed it is on me. But I just wanted to know if this is acceptable (was I taken advantage of?) as per MoM. Or is it common to have a 2 month notice period AND a penalty pay (generally it is one or the other)

Re: Contract employee for a consultancy with penalty for breaking contract - advice

Posted: Tue, 29 Jan 2019 3:54 pm
by PNGMK
Is this a permanent condition or does it expire after 1 year of work or so? Also how are they going to get it out of you? I guess you give two months notice and they hold a month of salary back... that "might" be an illegal act (strictly speaking they should pay you both and then bill you for the month owed).

Personally I would give notice, work one month - collect pay for that month and disappear. there maybe hiccups with transferring WP/EP tho.

Re: Contract employee for a consultancy with penalty for breaking contract - advice

Posted: Tue, 29 Jan 2019 4:30 pm
by opunsoars
The condition applies if I am to break my contract term.
I assume they would withold my 2nd notice month's pay to ensure they get they penalty from me.

Well, if it is common practice, I am disappointed at having agreed to it.

Re: Contract employee for a consultancy with penalty for breaking contract - advice

Posted: Tue, 29 Jan 2019 4:43 pm
by PNGMK
If you're paid in arrears then just don't give notice - just leave. It's quite unreasonable I agree. They'll try to sue you but IME the courts and employers don't usually succeed.

I helped a couple pack and leave over night when they wanted to leave a similarly bad contract. The school they worked for threatened to sue so we paid a local solicitor a retainer and he wrote a letter reminding the school that slavery was illegal.