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Terminating a Fixed Term Contract

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frankie609
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Terminating a Fixed Term Contract

Postby frankie609 » Sun, 20 Jun 2010 10:47 pm

Hi everyone,

I'm currently employed in a fixed term contract for 2 years. The contract states that I need to pay the liquidated damages that it amounts to four times of my salary. I didn't receive any trainings or whatsoever. The contract did not specify on how it calculated the stated liquidated damage. I need an advice how can I resign from the job without paying such big amount or how can I mitigate my losses from resigning.

Can an employer just put any amount as the liquidated damages in a fixed term contract? As far as I know, the law of contract of Singapore says a party shouldn't be able to exact the liquidated damages without justifying the amount.

What would happen if I resign without serving my 2 years of contract?

Much appreciated and thanks.

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ksl
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Postby ksl » Sun, 20 Jun 2010 11:12 pm

There is a legal aid advisory within the heartlands, where you could pop the question, or talk with MOM about it. It's a very technical issue, that needs such cases to refer too in a court of law to test the area or not. If there isn't much chance the employer could win, you could just take the advice and walk away. however you need it in writing, just in case it all goes pear shaped and the employer tries to enforce the contract.

This link should guide you in the right direction to the local legal clinics, take your contract with you
http://www.lawsociety.org.sg/probono/CLC/aboutCLC.aspx

H Chinaski
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Re: Terminating a Fixed Term Contract

Postby H Chinaski » Mon, 21 Jun 2010 5:28 pm

frankie609 wrote:Hi everyone,

I'm currently employed in a fixed term contract for 2 years. The contract states that I need to pay the liquidated damages that it amounts to four times of my salary. I didn't receive any trainings or whatsoever. The contract did not specify on how it calculated the stated liquidated damage. I need an advice how can I resign from the job without paying such big amount or how can I mitigate my losses from resigning.

Can an employer just put any amount as the liquidated damages in a fixed term contract? As far as I know, the law of contract of Singapore says a party shouldn't be able to exact the liquidated damages without justifying the amount.

What would happen if I resign without serving my 2 years of contract?

Much appreciated and thanks.


Nope, that sounds more like the law of Malaysia, where the employer's duty to justify liquidated damages is statutory.

AFAIK Singapore follows the English legal position on liquidated damages and unenforceable penalties.

Likely obvious scenarios:
(1) They will withhold your last one or two month's pay depending on the timing of your resignation (they'll withhold 1 month for tax purposes anyway).
(2) As (1) plus they'll sue you for the rest.

I suggest you follow ksl's advice before proceeding further.

frankie609
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Re: Terminating a Fixed Term Contract

Postby frankie609 » Mon, 21 Jun 2010 10:44 pm

H Chinaski wrote:
Nope, that sounds more like the law of Malaysia, where the employer's duty to justify liquidated damages is statutory.



Thanks for giving some inputs. Though I'm a bit confused about your response if you meant nope, the employer cannot put just any amount like the law of Malaysia or nope, the employer can just demand any amount unlike Malaysia where it is statutory.

Thanks again, couldn't hope more than that.

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Re: Terminating a Fixed Term Contract

Postby Mad Scientist » Tue, 22 Jun 2010 5:11 am

H Chinaski wrote:Nope, that sounds more like the law of Malaysia, where the employer's duty to justify liquidated damages is statutory.


Where did you get the notion that this is statutory:???:Most compensation is based on monthly wage from what I understand is ONE month wage.Whether training is provided or not is a separate matter which can be argue against or for you.Employer has to proof that asking you to pay 4 months wages inlieu of contract early termination is due to certain factors like specialise skill, cost of relocating you , loss of sales due to your resignation etc. Again this can be arbitrated by MOM

Read this link

http://www.agc.gov.my/agc/Akta/Vol.%206/Act%20265.pdf

I have gone thru it and it does not state in Malaysia Labour Law unless I have missed it

How do you define statutory liquidated damages ?

There is no such thing under SG law too. The devil is in the detail

Under Chap 91 of the employment act

Termination of contract without notice
11. —(1) Either party to a contract of service may terminate the contract of service without notice or, if notice has already been given in accordance with section 10, without waiting for the expiry of that notice, by paying to the other party a sum equal to the amount of salary at the gross rate of pay which would have accrued to the employee during the period of the notice and in the case of a monthly-rated employee where the period of the notice is less than a month, the amount payable for any one day shall be the gross rate of pay for one day’s work.

Go to this link and read
http://statutes.agc.gov.sg/non_version/ ... epage.html
Althought the contract is binding but if it varies by a wide margin from the Standing Law it is deemed null and void as both party cannot take advantage of the other's weakness or position if the contract is detrimental and unlawful to one party base on the Act. All employment contract must have the guideline base on this Employment Law.
It is the same as Anti Competition Law in Singapore which does the same to prevent this such manipulation from employers or among competitors
If you are not able to provide concrete evidence based on law of the land please do not suggest it is the law. I find it very disturbing as the OP is looking for answers not to mislead OP .
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