PART II
CONTRACTS OF SERVICE
Illegal terms of contract of service
8.  Every term of a contract of service which provides a condition of service which is less favourable to an employee than any of the conditions of service prescribed by this Act shall be illegal, null and void to the extent that it is so less favourable.
[32/2008]
Termination of contract
9.—(1)  A contract of service for a specified piece of work or for a specified period of time shall, unless otherwise terminated in accordance with the provisions of this Part, terminate when the work specified in the contract is completed or the period of time for which the contract was made has expired.
(2)  A contract of service for an unspecified period of time shall be deemed to run until terminated by either party in accordance with the provisions of this Part.
Notice of termination of contract
10.—(1)  Either party to a contract of service may at any time give to the other party notice of his intention to terminate the contract of service.
(2)  The length of such notice shall be the same for both employer and employee and shall be determined by any provision made for the notice in the terms of the contract of service, or, in the absence of such provision, shall be in accordance with subsection (3).
(3)  The notice to terminate the service of a person who is employed under a contract of service shall be not less than —
(a)one day’s notice if he has been so employed for less than 26 weeks;
(b)one week’s notice if he has been so employed for 26 weeks or more but less than 2 years;
(c)2 weeks’ notice if he has been so employed for 2 years or more but less than 5 years; and
(d)4 weeks’ notice if he has been so employed for 5 years or more.
(4)  This section shall not be taken to prevent either party from waiving his right to notice on any occasion.
(5)  Such notice shall be written and may be given at any time, and the day on which the notice is given shall be included in the period of the notice.
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.
[21/84; 36/95]
(2)  Either party to a contract of service may terminate the contract of service without notice in the event of any wilful breach by the other party of a condition of the contract of service.
[21/84; 36/95]
Contractual age
12.—(1)  Notwithstanding anything in any other written law, a person below the age of 18 years shall, subject to the provisions of this Act, be competent to enter into a contract of service.
(2)  No contract of service as an employee shall be enforceable against a person below the age of 18 years and no damages or indemnity shall be recoverable from that person in respect of the contract of service unless it is for his benefit.
When contract deemed to be broken by employer and employee
13.—(1)  An employer shall be deemed to have broken his contract of service with the employee if he fails to pay salary in accordance with Part III.
(2)  An employee is deemed to have broken the employee’s contract of service with the employer if the employee is absent from work for more than 2 days continuously without prior leave from the employer and —
(a)the employee has no reasonable excuse for the absence; or
(b)the employee does not inform and does not attempt to inform the employer of the excuse for the absence.
[Act 27 of 2015 wef 22/08/2015]
Dismissal
14.—(1)  An employer may after due inquiry dismiss without notice an employee employed by him on the grounds of misconduct inconsistent with the fulfilment of the express or implied conditions of his service except that instead of dismissing an employee an employer may —
(a)instantly down-grade the employee; or
(b)instantly suspend him from work without payment of salary for a period not exceeding one week.
(2)  Despite subsection (1), but subject to section 3 of the Employment Claims Act 2016 (Act 21 of 2016), where a relevant employee considers that he has been dismissed without just cause or excuse by his employer, the employee may lodge a claim, under section 13 of that Act, for one of the following remedies:
(a)reinstatement in his former employment;
(b)compensation.
[Act 55 of 2018 wef 01/04/2019]
(2A)  For the purposes of subsection (2), a relevant employee means —
(a)an employee employed in a managerial or an executive position —
(i)who is dismissed with notice; or
(ii)who is dismissed without notice but receives payment of any salary in lieu of notice,
after having served that employer for at least 6 months in any position (whether or not a managerial or an executive position);
[Act 55 of 2018 wef 01/04/2019]
(b)an employee employed in a managerial or an executive position who is dismissed without notice and without salary in lieu of such notice; or
(c)an employee not employed in a managerial or an executive position.
[Act 26 of 2013 wef 01/04/2014]
(3)  If a Tribunal hearing the claim is satisfied that the employee has been dismissed without just cause or excuse, the Tribunal may, despite any rule of law or agreement to the contrary —
(a)in a claim for reinstatement of the employee in his former employment, direct the employer —
(i)to reinstate the employee in the employee’s former employment; and
(ii)to pay the employee an amount equivalent to the wages that the employee would have earned, if the employee had not been dismissed; or
(b)in a claim for compensation, direct the employer to pay, as compensation to the employee, an amount of wages determined by the Tribunal.
[Act 55 of 2018 wef 01/04/2019]
(4)  [Deleted by Act 55 of 2018 wef 01/04/2019]
(5)  [Deleted by Act 55 of 2018 wef 01/04/2019]
(6)  [Deleted by Act 55 of 2018 wef 01/04/2019]
(7)  [Deleted by Act 55 of 2018 wef 01/04/2019]
(7A)  [Deleted by Act 55 of 2018 wef 01/04/2019]
(8)  For the purposes of an inquiry under subsection (1), the employer —
(a)may suspend the employee from work for —
(i)a period not exceeding one week; or
(ii)such longer period as the Commissioner may determine on an application by the employer; but
(b)must pay the employee at least half the employee’s salary during the period the employee is suspended from work.
[Act 55 of 2018 wef 01/04/2019]
(9)  If the inquiry does not disclose any misconduct on the part of the employee, the employer shall immediately restore to the employee the full amount of the salary so withheld.
Termination by employee threatened by danger
15.  An employee may terminate his contract of service with his employer without notice where he or his dependant is immediately threatened by danger to the person by violence or disease such as the employee did not by his contract of service undertake to run.
Liability on breach of contract
16.  Subject to anything in the contract of service to the contrary, the party who breaks the contract of service shall be liable to pay to the other party a sum equal to the amount he would have been liable to pay under section 11 had he terminated the contract of service without notice or with insufficient notice.
Contract of service not to restrict rights of employees to join, participate in or organise trade unions
17.  Subject to any other written law for the time being in force, nothing in any contract of service shall in any way restrict the right of any employee who is a party to such contract —
(a)to join a registered trade union;
(b)to participate in the activities of a registered trade union, whether as an officer of the trade union or otherwise; or
(c)to associate with any other persons for the purpose of organising a trade union in accordance with the provisions of the Trade Unions Act (Cap. 333).
Change of employer
18.—(1)  If by or under any written law a contract of employment between any body corporate and an employee is modified and some other body corporate is substituted as the employer, the employee’s period of employment at the time when the modification takes effect shall count as a period of employment with such other body corporate, and the change of employer shall not break the continuity of the period of employment.
[36/95; 32/2008]
(2)  If on the death of an employer the employee is taken into the employment of the personal representatives or trustees of the deceased, the employee’s period of employment at the time of the death shall count as a period of employment with the employer’s personal representatives or trustees, and the death of the employer shall not break the continuity of the period of employment.
[36/95]
(3)  If there is a change in the partners, personal representatives or trustees who employ any person, the employee’s period of employment at the time of the change shall count as a period of employment with the partners, personal representatives or trustees after the change, and the change shall not break the continuity of the period of employment.
[36/95]
Transfer of employment
18A.—(1)  If an undertaking (whether or not it is an undertaking established by or under any written law) or part thereof is transferred from one person to another —
(a)such transfer shall not operate to terminate the contract of service of any person employed by the transferor in the undertaking or part transferred but such contract of service shall have effect after the transfer as if originally made between the person so employed and the transferee; and
(b)the period of employment of an employee in the undertaking or part transferred at the time of transfer shall count as a period of employment with the transferee, and the transfer shall not break the continuity of the period of employment.
[36/95]
(2)  Without prejudice to subsection (1), on completion of a transfer referred to in that subsection —
(a)all the transferor’s rights, powers, duties and liabilities under or in connection with any such contract of service shall be transferred by virtue of this section to the transferee;
(b)any act or omission done before the transfer by the transferor in respect of that contract of service shall be deemed to have been done by the transferee; and
(c)any act or omission done before the transfer by an employee employed in the undertaking or part transferred in relation to the transferor shall be deemed to have been done in relation to the transferee.
[36/95]
(3)  On the completion of a transfer referred to in subsection (1), it is hereby declared for the avoidance of doubt that the terms and conditions of service of an employee whose contract of service is preserved under that subsection shall be the same as those enjoyed by him immediately prior to the transfer.
[36/95]
(4)  Subsections (1) and (2) shall not transfer or otherwise affect the liability of any person to be prosecuted for, convicted of and sentenced for any offence.
[36/95]
(5)  As soon as it is reasonable and before a transfer under subsection (1) takes place, to enable consultations to take place between the transferor and the affected employees and between the transferor and a trade union of affected employees (if any), the transferor shall notify the affected employees and the trade union of affected employees (if any) of —
(a)the fact that the transfer is to take place, the approximate date on which it is to take place and the reasons for it;
(b)the implications of the transfer and the measures that the transferor envisages he will, in connection with the transfer, take in relation to the affected employees or, if he envisages that no measures will be so taken, that fact; and
(c)the measures that the transferee envisages he will, in connection with the transfer, take in relation to such of those employees as, by virtue of subsection (1), become employees of the transferee after the transfer or, if he envisages that no measures will be so taken, that fact.
[36/95]
(6)  As soon as it is reasonable, the transferee shall give the transferor such information so as to enable the transferor to perform the duty imposed on him by virtue of subsection (5)(c).
[36/95]
(7)  Where the Commissioner considers that there has been an inordinate delay —
(a)by the transferor in notifying the affected employees or a trade union of affected employees of the matters set out in subsection (5); or
(b)by the transferee in notifying the transferor of the information set out in subsection (6),
the Commissioner may, by notice in writing, direct the transferor to comply with subsection (5) or the transferee to comply with subsection (6), as the case may be, within such time as may be specified in the notice.
[36/95]
(8)  Where, immediately before a transfer referred to in subsection (1), a trade union is recognised by the transferor for the purposes of the Industrial Relations Act (Cap. 136) in respect of any employee who in consequence of the transfer becomes the employee of the transferee, the trade union shall, after the transfer —
(a)be deemed to be recognised by the transferee for the purposes of the Industrial Relations Act if, after the transfer, the majority of employees employed by the transferee are members of the trade union; or
(b)in any other case, be deemed to be recognised by the transferee only for the purpose of representing the employee on any dispute arising —
(i)from any collective agreement that was entered into between the transferor and the trade union while the collective agreement remains in force; or
(ii)from the transfer of the employee’s employment from the transferor to the transferee under this section.
[36/95]
(8A)  For the purposes of subsection (8)(b), any collective agreement that was entered into between the transferor and the trade union of the affected employees and in force immediately before the transfer shall continue in force between the transferee and the trade union of the affected employees for a period of 18 months after the date of the transfer or until the date of its expiry as specified in the collective agreement, whichever is the later.
[Act 26 of 2013 wef 01/04/2014]
(9)  A dispute or disagreement between the transferor and an employee or the transferee and an employee arising from a transfer under subsection (1), whether before or after the transfer, may be referred by a party to the dispute or disagreement to the Commissioner under section 115 and shall be deemed to be a dispute to which that section applies.
[36/95]
(10)  Where a dispute or disagreement has been referred to the Commissioner pursuant to subsection (9), the Commissioner shall, in addition to the powers conferred under section 115, have the powers —
(a)to delay or prohibit the transfer of employment of the employee to the dispute from the transferor to the transferee under subsection (1); and
(b)to order that the transfer of employment of the employee to the dispute from the transferor to the transferee under subsection (1) be subject to such terms as the Commissioner considers just.
[36/95]
(11)  The Minister may make such regulations as he considers necessary or expedient to give effect to the provisions of this section and, in particular, may make regulations —
(a)to provide for the form and manner of consultations between the transferor and the affected employees and between the transferor and a trade union of affected employees under subsection (5);
(b)for the type of information that must be communicated by the transferor to the affected employees and to a trade union of affected employees under subsection (5), or by the transferee to the transferor under subsection (6); and
(c)to provide for a mechanism for conciliation of disputes arising out of or relating to a transfer referred to in subsection (1) between any employer and employee.
[36/95]
(12)  Nothing in this section shall prevent a transferee of an undertaking referred to in subsection (1) and an employee whose contract of service is preserved under that subsection or a trade union representing such an employee from negotiating for and agreeing to terms of service different from those contained in the contract of service that is preserved under that subsection.
[36/95]
(13)  In this section —
“affected employee” means any employee of the transferor who may be affected by a transfer under subsection (1) or may be affected by the measures taken in connection with such a transfer;
“trade union” means a trade union which has been —
(a)registered under any written law for the time being in force relating to the registration of trade unions; and
(b)accorded recognition by the employer pursuant to section 17(1) of the Industrial Relations Act (Cap. 136);
“transfer” includes the disposition of a business as a going concern and a transfer effected by sale, amalgamation, merger, reconstruction or operation of law;
“undertaking” includes any trade or business.
[36/95]
Offence
19.  Any employer who enters into a contract of service or collective agreement contrary to the provisions of this Part shall be guilty of an offence.