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Offer letter received - legal review required - any advice?

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commander_frankfurt
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Offer letter received - legal review required - any advice?

Postby commander_frankfurt » Sat, 06 Apr 2013 7:06 pm

Hello and good evening @all!

I am about to move Singapore to work for a major international bank. EP/DP has been processed and I have the Offer Letter/contract in my hands ready to sign. I have however found a few clauses in there which at least sound unusual (termination notice periods and some other things). My future employer's HR ladies have time and again assured me this is "common in the Singapore context", but I have no way to confirm that. I have contacted an international law firm for a lawyer to have a look at this to tell me whether I can accept this or not - their initial quote for a "brief contract review" was SGD2,500. Well - that's a fair amount of money for something I can hardly see anyone taking more than 1 hour to do and I didnt ask for the senior partner to review this. Does anyone have some advice here? I am ok with most of the provisions in the contract but some really itch and I am concerned I may be signing something I might regret if I simply rely on the friendly HR partners word. Does anyone happen to know a reliable lawyer under Singapore law or anyone who could help here?

Thanks a mill!
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Postby x9200 » Sat, 06 Apr 2013 7:40 pm

Why don't you just post here the clauses (or their descriptions) that you are not comfortable with and we will try to help you?

BTW, how it is possible your EP/DP has been processed without you signing the contract? It seems strange.

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Postby JR8 » Sat, 06 Apr 2013 8:32 pm

You can pay a lawyer S$2,500 (a mind-boggling sum for what is involved).

Or rely on the knowledge here, which comes free. I know what the old saying is about 'the worth of free advice', but if that were true, fora such as this would not exist.

Consider also that one of the moderators (no less) here is an expat who is employed as head of HR for his company. And there might be other HR professionals here too. Maybe there are some legal people here too.

I'd test the collective knowledge here, and only then consider taking any outstanding matters elsewhere. But I'd venture to suggest that there is 90% likely nothing we could not collectively explain or advise upon, that a lawyer could.

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Postby offshoreoildude » Sat, 06 Apr 2013 9:22 pm

More to the point; what are you going to do if you don't like the contract? I love those career advisors who say "you must have your contract reviewed by a legal expert" - I mean if you're not Marissa Meyer's being poached from Google HR ain't going to give a rats arse when you return the contract redlined by your 'legal expert'. They'll just hire someone else.

There's always two views to the employment contract - what it says and what will actually happen or be enforced. Apart from the actual pay rate I've found there to be a fair amount of elasticity between the contract and actuality (both for and against one's favour) in Singapore.
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Postby commander_frankfurt » Sat, 06 Apr 2013 10:13 pm

Thanks to all for coming back so quickly, I am really touched!
I agree with grouchyoldexpat that there probably is some elasticity between what the contract says and what happens in reality. On the other hand - if there is something strikingly unfair it is worth speaking up against in my view. Might be a test there as well - how carefully is the person reviewing contracts?

Now without much further ado, here is what bothers me:
1) Both parties can terminate the contract giving 50 days notice and I could be suspended into "Garden Leave", receiving salary and all other benefits during the notice period. What bothers me now is I am asked to refrain from soliciting customers, team members etc. for a period of 6 months post termination for whatever cause. I read this to mean if the company decides to terminate me they'll pay me for 50 days but for the other more than 4 months I wont be able to start a job somewhere else. Somewhat unfair to me, in my view. On top of that, I currently have 6 months notice period in my contract so reducing this to less than a third sounds a bit harsh.

2) It says somewhere in the Offer Letter that this offer should not be construed as a promise or guarantee of employment for any defined time. I however am asked to commit myself entirely, declare I wont work for nobody else, have no outside business interests (profit or non-profit making) etc.. One could read this to say my employer guarantees me nothing and could tell me the day I walk in the door "Here is your 50 days notice, give us the money we already shelled out for your relocation and get lost". Obviously this is drastically overstated but again it feels one sided.

3) A smaller point is that my employment will be subject to internal policies and procedures. These include things like how much time off you get, when the salary gets paid, benefits etc.. These are all on an intranet webpage "so we can change them easily" as I was told. When I asked if I could have a printed version they told me off. This is I admit a smaller point, however, wherever I joined in the past (which includes Ireland, New York and Germany) a printed "Welcome/Policies Package" was always provided and it doesnt hurt, in my experience, to have a close look before signing and keeping it somewhere safe.

Really appreciate your views.
Have a great weekend!

Commander

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Postby sundaymorningstaple » Sat, 06 Apr 2013 11:45 pm

commander_frankfurt wrote:Thanks to all for coming back so quickly, I am really touched!
I agree with grouchyoldexpat that there probably is some elasticity between what the contract says and what happens in reality. On the other hand - if there is something strikingly unfair it is worth speaking up against in my view. Might be a test there as well - how carefully is the person reviewing contracts?

Now without much further ado, here is what bothers me:
1) Both parties can terminate the contract giving 50 days notice and I could be suspended into "Garden Leave", receiving salary and all other benefits during the notice period. What bothers me now is I am asked to refrain from soliciting customers, team members etc. for a period of 6 months post termination for whatever cause. I read this to mean if the company decides to terminate me they'll pay me for 50 days but for the other more than 4 months I wont be able to start a job somewhere else. Somewhat unfair to me, in my view. On top of that, I currently have 6 months notice period in my contract so reducing this to less than a third sounds a bit harsh.

Most contracts in Singapore have notice periods of between 30 and 90 days. However, Singapore law states the following in the Employment Act (which governs only certain low wage employees (e.g., labourers earning under 2000/mo generally speaking) Everybody else is negotiable but certain things like annual leave and notice periods have certain frameworks to follow. As long as a company gives at least the minimum required by MOM they are not running foul of the law, and as long as the notice period is equal (termination/resignation) as long as it is at least that which is required by the MOM it is okay. (In Singapore less than 6 months, only 1 days is required, over 6 months but less than 2 years - 1 week is required (minimums), over two years but less than 5, 2 weeks are required and over 5 years, one month is required. Therefore it usually only the high level negotiated contracts that have upwards of 3 months. (very few will have 6 months).

Most companies that deal with proprietary processes try to use a non-compete clause. Some can be upheld, but most cannot. If you have access to proprietary information (client lists are NOT proprietary. They are all in the phone book anyway.) like electronic/chemical/whathaveyou processes that are trade secrets of the company, then a non-compete clause can possibly be upheld, but usually for only a certain area/radius. Based on what you have written, it's only saying you cannot contact your current company's clients or your companys Staff (Obviously the don't want you leave and then try to poach their staff) This is fair and considerably fairer that most Non-compete clauses I've seen. Frankly, in Asia, contracts aren't worth the paper they are printed on. As most will have a clause somewhere that says you contract can be changed verbally if necessary, but but as little as a memo.


2) It says somewhere in the Offer Letter that this offer should not be construed as a promise or guarantee of employment for any defined time. I however am asked to commit myself entirely, declare I wont work for nobody else, have no outside business interests (profit or non-profit making) etc.. One could read this to say my employer guarantees me nothing and could tell me the day I walk in the door "Here is your 50 days notice, give us the money we already shelled out for your relocation and get lost". Obviously this is drastically overstated but again it feels one sided.

Welcome to Asia. This is standard in all contracts.

3) A smaller point is that my employment will be subject to internal policies and procedures. These include things like how much time off you get, when the salary gets paid, benefits etc.. These are all on an intranet webpage "so we can change them easily" as I was told. When I asked if I could have a printed version they told me off. This is I admit a smaller point, however, wherever I joined in the past (which includes Ireland, New York and Germany) a printed "Welcome/Policies Package" was always provided and it doesnt hurt, in my experience, to have a close look before signing and keeping it somewhere safe.

Go back and ready my first response to your initial paragraph, re changing the contract and it being not worth the paper is printed on. One thing you have to realize, Singapore is Pro Business NOT pro employee. However, you have to remember, what granted on one side has to be granted on the other as well. You could waltz in one morning as well and hand them a resignation letter giving them 50 days notice. At the point, they would accompany you to your desk, allow to to box up your personal items and then they would escort you out of the building collecting any keys you might possess and put you on garden leave to prevent you from causing any potential mischief prior to your departure. Of course, if you were up to no good, you would have already gotten anything you wanted out of the system anyway before you resigned. So you see, it's a two way street. .

Really appreciate your views.
Have a great weekend!

Commander

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Postby offshoreoildude » Sun, 07 Apr 2013 9:36 am

I see nothing particularly unusual.

What you might want to think about is your benefits (car, housing etc). I have never allowed HR control over those because HR sucks in Singapore - I always negotiate for a total sum payment to include those benefits as cash and then I do my own housing / car etc arrangements.
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Postby Wd40 » Sun, 07 Apr 2013 10:48 am

commander_frankfurt wrote:Thanks to all for coming back so quickly, I am really touched!
I agree with grouchyoldexpat that there probably is some elasticity between what the contract says and what happens in reality. On the other hand - if there is something strikingly unfair it is worth speaking up against in my view. Might be a test there as well - how carefully is the person reviewing contracts?

Now without much further ado, here is what bothers me:
1) Both parties can terminate the contract giving 50 days notice and I could be suspended into "Garden Leave", receiving salary and all other benefits during the notice period. What bothers me now is I am asked to refrain from soliciting customers, team members etc. for a period of 6 months post termination for whatever cause. I read this to mean if the company decides to terminate me they'll pay me for 50 days but for the other more than 4 months I wont be able to start a job somewhere else. Somewhat unfair to me, in my view. On top of that, I currently have 6 months notice period in my contract so reducing this to less than a third sounds a bit harsh.


The clause about soliciting customer, team members etc is to protect from you stealing away their clients, but you can jump to another company in the same industry immediately, no problem.

So you have 6 months notice period currently? Thats really long man. May be you are a director or something? If you are talking of an MNC bank, then the notice period is typically 1 month for the analyst level. 2 months for AVP level. Above that I guess its 6 months. The director in my department was lay'd off and he was given 6 months severance pay for the director level and then 2 weeks of severance pay for every year worked in the bank, so he actually took about a year's pay or more as severance . :o Typically MNC banks have really good severance pays at higher levels and thats not mentioned in the contract, so I guess it shouldn't be such a big issue.


2) It says somewhere in the Offer Letter that this offer should not be construed as a promise or guarantee of employment for any defined time. I however am asked to commit myself entirely, declare I wont work for nobody else, have no outside business interests (profit or non-profit making) etc.. One could read this to say my employer guarantees me nothing and could tell me the day I walk in the door "Here is your 50 days notice, give us the money we already shelled out for your relocation and get lost". Obviously this is drastically overstated but again it feels one sided.

Thats pretty standard, dont see anything wrong with it.

3) A smaller point is that my employment will be subject to internal policies and procedures. These include things like how much time off you get, when the salary gets paid, benefits etc.. These are all on an intranet webpage "so we can change them easily" as I was told. When I asked if I could have a printed version they told me off. This is I admit a smaller point, however, wherever I joined in the past (which includes Ireland, New York and Germany) a printed "Welcome/Policies Package" was always provided and it doesnt hurt, in my experience, to have a close look before signing and keeping it somewhere safe.

again pretty standard

Really appreciate your views.
Have a great weekend!

Commander

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Postby ulu ulu » Sun, 07 Apr 2013 9:49 pm

commander_frankfurt wrote:....
2) It says somewhere in the Offer Letter that this offer should not be construed as a promise or guarantee of employment for any defined time. I however am asked to commit myself entirely, declare I wont work for nobody else, have no outside business interests (profit or non-profit making) etc.. One could read this to say my employer guarantees me nothing and could tell me the day I walk in the door "Here is your 50 days notice, give us the money we already shelled out for your relocation and get lost". Obviously this is drastically overstated but again it feels one sided.

...


IMO they will ask you to pay back the relocation expenses only if you want to quit within certain period after joining (typically 1-2 years, this should be stated in your contract).

But if you are worried about this, you might want to send an email to HR and get it clarified.

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Postby Grumpy77 » Sun, 07 Apr 2013 10:02 pm

I'm just dealing with these issues and had a lawyer consultation last Wed on restraint of trade and other items in my agreement. Cost SGD500 for almost an hour of face-to-face going through my laundry list of concerns. If you want the name, PM me as she specialises in banking & finance, licensing, and MAS regulatory issues which was near and dear to my heart.

As SMS says, the restraint of trade clause is not often upheld in Sg. There is some latitude for a company to protect trade secrets through this clause but they have to specify what those secrets are and how you are not to abuse your knowledge of them. They need to be very specific.

To just say you can't work or talk to staff or solicit a client is simply too wide and absolutely constitutes an invalid agreement.

Don't worry about signing it, even if you do, it is still not a valid agreement. Agreeing to an invalid clause does not make it valid in the eyes of the court.

I just had this advice toward my exit document. Lawyer said to sign or not sign as I see fit. The clause was not enforceable under any circumstance. So I signed it... Why rock the boat, I'll deal with issues if they crop up later.

I see nothing in your letter you need to worry about.

Hope you enjoy your posting :-)

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Postby offshoreoildude » Sun, 07 Apr 2013 10:32 pm

Grumpy77 wrote:I'm just dealing with these issues and had a lawyer consultation last Wed on restraint of trade and other items in my agreement. Cost SGD500 for almost an hour of face-to-face going through my laundry list of concerns. If you want the name, PM me as she specialises in banking & finance, licensing, and MAS regulatory issues which was near and dear to my heart.

As SMS says, the restraint of trade clause is not often upheld in Sg. There is some latitude for a company to protect trade secrets through this clause but they have to specify what those secrets are and how you are not to abuse your knowledge of them. They need to be very specific.

To just say you can't work or talk to staff or solicit a client is simply too wide and absolutely constitutes an invalid agreement.

Don't worry about signing it, even if you do, it is still not a valid agreement. Agreeing to an invalid clause does not make it valid in the eyes of the court.

I just had this advice toward my exit document. Lawyer said to sign or not sign as I see fit. The clause was not enforceable under any circumstance. So I signed it... Why rock the boat, I'll deal with issues if they crop up later.

I see nothing in your letter you need to worry about.

Hope you enjoy your posting :-)


+1 - invalidating restraint or trade or profession clauses are one of the few protections courts do give employees here. I've seen a case of a friend upheld in this instance.
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Postby commander_frankfurt » Mon, 08 Apr 2013 3:57 am

Thanks to all for coming back. Your advice is a huge relief. You have to understand that I am coming from a background where you take agreements seriously and while courts in Germany are generally speaking more PRO-employee it doesnt hurt to make sure you understand what you sign. The irony is that in the position I will have I will be required to sign contracts on the behalf of the bank regularly, committing capital, resources etc.. Part of what has kept me in the job until now has been making sure I understand and agree to what I sign, or get legal to redraft it. It feels a bit strange now to be asked to sign something I dont yet understand and havent gotten vetted by legal. But again - that may be part of the learning curve on how things get done in Asia.

What is interesting is the bit about the clauses around non-solicitation being invalid - I thought the same, but didnt want to ask the HR reps. I'll get on the phone with them likely this coming week and ask them to clarify - we'll see what that turns up.

To clarify as there were questions here - I am by no means a senior rep in the bank; just a humble corp banking guy who raised his hand when an opportunity in Singapore came up. It will be quite a challenge from a lot of perspectives (family, climate, working environment) but I also see it as a bit of an opportunity to get out of the same-old, same-old mentality that would otherwise catch up with me sooner or later.

Thanks to all for your help, which comes as a great source of relief at this moment.

Commander

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Re: Non compete clause

Postby Girl_Next_Door » Mon, 08 Apr 2013 8:45 am

1) Both parties can terminate the contract giving 50 days notice and I could be suspended into "Garden Leave", receiving salary and all other benefits during the notice period. What bothers me now is I am asked to refrain from soliciting customers, team members etc. for a period of 6 months post termination for whatever cause. I read this to mean if the company decides to terminate me they'll pay me for 50 days but for the other more than 4 months I wont be able to start a job somewhere else. Somewhat unfair to me, in my view. On top of that, I currently have 6 months notice period in my contract so reducing this to less than a third sounds a bit harsh.

I am not sure about the exact position you are holding, but this clause is quite common if you deal with customers (private banking, investment banking, etc). I know for a German, these clauses are extremely challenging because you take every line you signed, very seriously.

Looking at your clause, it is obvious that you are holding either a Director or Managing Director level. Again, the clause is especially common for large organizations. You can definitely work for another organization, but there are many hurdles that you have to jump. Most of the time, resignations are followed by a long break, instead of immediate placement in another organization.

In the past, there has also been several "musical chairs movement" in the banking systems whereby key leaders who left a bank will bring the entire team plus customers with them, to the new bank that they are joining. This clause is created to deter individuals from doing it. Google Citibank sue UBS Singapore and you will get information on how Citibank have successfully sued ex-bankers who joined UBS and tried to take the customers along.

{edited by moderator}

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Postby Grumpy77 » Mon, 08 Apr 2013 10:55 am

Dude, don't get them to clarify... Sign it as is - knowing 100% it is unenforceable.

If you get them to rework your agreement, I can't see any upside. A tighter clause can only be to your detriment if you find a better position and wish to jump ship.

8^)

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Postby commander_frankfurt » Tue, 09 Apr 2013 4:47 am

Thanks to all for offering your help and views on this forum. I am really impressed. I am 99% ok to sign now "as is", as I am taking your advice that most likely what I am signing wont be effective from a legal perspective anyway.

I guess I have a lot to learn on how things get done in Asia and this is just the beginning of it...

THANK YOU all again!

Commander


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