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Penalty Clause in Employment Contract

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TommyD
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Penalty Clause in Employment Contract

Postby TommyD » Fri, 10 Jul 2009 4:24 pm

Hi,

My partner just got an offer for a teaching position and the offer seems very biased towards the employer, mainly that there is a penalty clause in the contract to the effect that if the full term of the contract is not served then she will have to pay the employer 6 months of her salary as a penalty.

Is this
a) legal?
b) a common occurance in Singapore?
c) something that can usually be negotiated out?

Any help is greatly appreciated.

Tom.

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sundaymorningstaple
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Postby sundaymorningstaple » Fri, 10 Jul 2009 5:22 pm

1. It's only legal if the reverse is also true that if they let you go before the same terms, then they have to pay you 6 months penalty as well.

2. common occurance? Yes but the quantum is normally 1 month either side up to 3 months either side.

3. That depends on your negotiating skills and how badly you want the job.

TommyD
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Postby TommyD » Fri, 10 Jul 2009 5:34 pm

Thanks sms.

i found some info on the MOM site saying that penalty clauses are legal under civil law but are not covered under the employment act, but i couldn't find anything about it when i did a search for civil law.

we'll try to negotiate it out, but can't accept it as is because my job will almost certainly see me leaving Singapore within 2 years and i certainley don't want to leave her behind.

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Postby Addadude » Fri, 10 Jul 2009 5:34 pm

The other point I would add to SMS excellent reply is that if the company is so desperate to 'lock in' an employee for 6 months with a clause like that, it can't really be a great place to work. These kind of clauses would indicate a company that finds it hard to retain staff, usually for a good reason!
"Both politicians and nappies need to be changed regularly, and for the same reasons."

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Postby sundaymorningstaple » Fri, 10 Jul 2009 5:56 pm

Addadude wrote:The other point I would add to SMS excellent reply is that if the company is so desperate to 'lock in' an employee for 6 months with a clause like that, it can't really be a great place to work. These kind of clauses would indicate a company that finds it hard to retain staff, usually for a good reason!


Good Point! :o

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Postby jpatokal » Sat, 11 Jul 2009 10:19 am

TommyD wrote:i found some info on the MOM site saying that penalty clauses are legal under civil law but are not covered under the employment act, but i couldn't find anything about it when i did a search for civil law.

The Employment Act is mainly for manual laborers and does not cover positions with "specialized skills", including teaching.

http://www.mom.gov.sg/publish/momportal ... overs.html

If there is a summary of civil law covering other employees, I'd be quite interested in hearing about it...
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Postby sundaymorningstaple » Sat, 11 Jul 2009 10:55 am

I think what he's trying to say is that there are provisions under standard contract law that can be enforced on employment contracts as well for those things that fall outside the purview of the MOM but only by using the civil court and not MOM.

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Postby TommyD » Sat, 11 Jul 2009 4:21 pm

Thanks guys, all responses have been helpful.

We've responded with a counter offer and are waiting for a reply. We won't be accepting any penalty clauses (1-3 months notice is fine though) so she'll either get the job on the terms we're happy with or we look for another job.

It's a bit annoying since she's been looking for work for so long, but i guess it's an employers market at the moment, so we just have to keep trying.

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Postby jpatokal » Mon, 13 Jul 2009 2:51 pm

sundaymorningstaple wrote:I think what he's trying to say is that there are provisions under standard contract law that can be enforced on employment contracts as well for those things that fall outside the purview of the MOM but only by using the civil court and not MOM.

I understand -- I'd just be interested in knowing what these provisions are and how they affect employers/employees.
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Postby morenangpinay » Sat, 18 Jul 2009 11:00 am

You can check the labour standards and ratifications in the International Labour Organization site


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