Key employment terms (KET) guide for employers in Singapore
To maintain a harmonious employer-employee relationship in Singapore, understanding and properly documenting Key Employment Terms (KETs) is crucial. These KETs serve as the foundation for the employment agreement and provide clarity to both parties, helping to avoid potential disputes down the road.
In this comprehensive guide, we will delve into the specifics of Key Employment Terms, shedding light on what they are and why they matter. We will also highlight the key components that must be included in KETs, emphasising their significance while offering practical insights for employers. Read on to find out more!
What are Key Employment Terms (KETs)?
KETs must include the following items, unless they are not applicable to the employee. For instance, if the employee falls under the Professional, Manager, or Executive (PME) category and overtime pay does not apply, KETs need not include item 11 (overtime payment period) and item 12 (overtime rate of pay).
Duration of employment (if the employee is on a fixed-term contract)
6
Work arrangements, such as:
Daily working hours (e.g., 8.30 am – 6 pm)
Number of working days per week (e.g., six)
Rest day (e.g., Saturday)
Use the KETs verification tool to check if work arrangements meet the Employment Act requirements.
7
Salary period
8
Basic salary
For hourly, daily, or piece-rated workers, employers should also indicate the basic rate of pay (e.g., $X per hour, day, or piece).
9
Fixed allowances
10
Fixed deductions
11
Overtime payment period (if different from item 7 salary period)
12
Overtime rate of pay
13
Other salary-related components, such as:
Bonuses
Incentives
14
Types of leave, such as:
Annual leave
Outpatient sick leave
Hospitalisation leave
Maternity leave
Childcare leave
15
Other medical benefits, such as:
Insurance
Medical benefits
Dental benefits
16
Probation period
17
Notice period
18
(Optional) Place of work
Used if the work location is different from the employer’s address.
Although optional, you are strongly encouraged to include this information.
Is issuing Key Employment Terms(KETs) compulsory for all employers?
Employers in Singapore are required to issue Key Employment Terms (KETs) to all employees, provided the following conditions are met:
Contract Date: Employees who enter into a contract of service on or after 1 April 2016.
Coverage by Employment Act: Employees who fall under the purview of the Employment Act. This includes part-time employees, casual workers, and even senior executive employees (e.g., CEO, CFO, CHRO).
Duration of Employment: Employees who are employed for a period of 14 days or more. This duration is determined by the length of the employment contract, not by the number of working days.
Is a written form of Key Employment Terms(KETs)necessary?
While employment agreements can take various forms, including verbal, expressed, or implied, it is highly advisable to have Key Employment Terms (KETs) documented in writing. This not only ensures clarity but also minimises the potential for disputes and misunderstandings in the employer-employee relationship.
There are several reasons to choose a written contract for KETs:
Clarity for All Parties: A written employment contract provides a clear and unambiguous record of the agreed-upon terms and conditions. This clarity is invaluable in preventing disputes and ensuring that both employers and employees understand their obligations and entitlements.
Payment and Benefits: A written contract outlines critical details such as salary, payment frequency, and employment benefits. This transparency enables employees to know when they will receive their compensation and what additional benefits they may be eligible for, contributing to their financial security and peace of mind.
Trust and Transparency: The act of providing written KETs demonstrates an employer's commitment to transparency and fairness. It fosters trust between employers and employees, leading to a more positive working relationship. When both parties are confident in their understanding of the terms, misunderstandings and disputes are less likely to arise.
Dispute Prevention: By clearly documenting KETs in writing, employers can reduce the likelihood of disputes. In the event of a disagreement, a written contract serves as a reference point that can help resolve issues efficiently and fairly.
Do I need to issue a separate set of Key Employment Terms(KETs)if my employees are already given an employment contract?
Employers in Singapore often wonder if they need to provide a separate set of Key Employment Terms (KETs) when they have already issued an employment contract. The answer depends on whether the employment contract already contains all the prescribed terms applicable to the employee.
If the employment contract already comprehensively covers all the prescribed terms that apply to the specific employee, there is no need to issue a separate set of KETs. The employment contract serves as the official document outlining the agreed-upon terms and conditions of employment.
What should I do if some of the applicable Key Employment Term(KET)items were not stated in my employee’s employment contract?
If some of the applicable KET items were inadvertently omitted from the employee's employment contract, it's essential to rectify this situation to comply with the Employment Act (EA) requirements.
To ensure compliance with EA requirements and provide employees with a complete understanding of their employment terms, employers can take the following corrective actions:
Attach an Addendum: Employers can issue the missing KET items as a separate addendum to the employee's existing employment contract. This addendum should clearly outline the omitted terms, ensuring that both parties have a comprehensive record of the employment arrangement.
Incorporate into Company Documentation: For common employment terms that apply to multiple employees, employers can add these terms to the company's employee handbook, intranet, or similar platforms. It's crucial to inform employees about where and how they can access and retain a copy of these terms.
By taking these corrective measures, employers can rectify any omissions in the employment contract, ensure compliance with EA requirements, and maintain transparency and fairness in the employment relationship. It is essential to keep accurate and up-to-date records to facilitate smooth employer-employee interactions and minimise potential disputes.
Is there a sample of Key Employment Terms (KETs)?
An employer can manually create a set of KETs by using the Key Employment Terms (KETs) template provided by the Ministry of Manpower (MOM). Here’s a sample of what a completed itemised payslip looks like:
Is there any penalty for not issuing complete and accurate Key Employment Terms (KETs) to my employees?
Employers who do not provide complete and accurate KETs to eligible employees may face an administrative penalty. This penalty can amount to up to $400 per affected employee. It is therefore essential for employers to be well-informed about the requirements for issuing KETs, including the list of items that must be included, and to ensure that their employment policies and practices align with the EA.
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