What to check in a new employment contract before you sign | Work It

Negotiating Your Notice Period [0:48]

• Notice periods are typically contractually binding, but options exist if you need to start a new job before your current notice period ends.
• You can discuss buying out the remaining notice period with your future employer, who may fund it if they need you urgently.
• Alternatively, you can negotiate with HR to shorten the notice period or clear your leave during this time.

  "It really is not. It really is not. It's about having a sensible discussion, knowing what you bring to the table, what they want, why they are trying to hire you, and then trying to find a nice balance in there that works for them and for you."

Legal Workarounds for Notice Periods [2:07]

• If a contract is silent on notice periods, the Employment Act provides a statutory minimum.
• Both parties can agree to buy out the notice period, known as salary in lieu of notice.
• Prospective employers may fund this buyout, especially if they are headhunting you.

  "The Employment Act actually provides for the option of both parties to be able to buy out the notice period."

The Importance of Written Agreements [4:23]

• While oral agreements to shorten notice periods are common, it's crucial to memorialize them in writing via email.
• The content of the written communication is critical; it must explicitly state the intention to waive or shorten the notice period.
• A recent case highlighted that even with multiple forms of evidence, courts may not be satisfied if the intention isn't clear and unambiguous.

  "The conservative approach, the sound advice would be, after the meeting, when you come out, just drop a short email to say, as we discussed, we've agreed that I will only serve two months out of the six."

Contractual Formalities for Amendments [5:47]

• Always check your contract for specific formalities required for amendments, such as requiring mutual written consent or signatures.
• If the contract only requires amendments to be in writing, an email generally suffices.
• While WhatsApp messages are technically in writing, email is preferred for formal communication.

  "Always know what your contract says, because certain contracts will have formality set out for amendment."

Typical Notice Periods and Employer Concerns [7:01]

• For those with a few years of experience, one to two months is considered reasonable, with anything above three months often seen as excessive.
• Companies may require longer notice periods due to manpower shortages or the need for project handover.
• Some employers worry employees may be mentally checked out during their notice period, leading to decreased productivity.

  "So most of the people I spoke to are, you know, new to the working world, maybe a few years, under five years of working. So a lot of them said one to two months is pretty much reasonable."

The Enforceability of Notice Periods [9:39]

• Courts generally view notice periods as contractual undertakings and do not typically assess their reasonableness.
• There are ways out, such as paying salary in lieu of notice.
• A recent case involved a manager ordered to pay a significant sum for serving only two months of a six-month notice period.

  "The courts don't normally assess the reasonableness of the notice period because it is something that has been agreed and there are ways out of it."

Non-Compete Clauses Explained [11:50]

• Non-compete clauses, or post-termination restraints, are more common for senior or specialized employees.
• They are generally enforceable if the employer is protecting a legitimate proprietary interest (e.g., trade secrets, client connections) and the restraint is reasonable in duration, geography, and scope.
• Courts look at the substance of the role and the clarity of the clause, favoring narrowly drafted restrictions.

  "Non-compete actually relates to not competing. In most cases, it's called a post-termination restraint after you've left the employer."

Navigating Broad Non-Compete Clauses [14:28]

• It's crucial to check if your contract offsets notice periods or garden leave against the non-compete period.
• While non-competes are enforceable, pursuing legal action can be expensive and difficult for companies.
• Some companies may send cease and desist letters or take action to make an example of an employee, especially senior ones.

  "A lot of people think that non-competes are unenforceable in Singapore, full stop. That's not true."

Red Flags in Employment Contracts [17:38]

• Discretionary bonuses that contradict agreed-upon commercial terms are a red flag.
• Ensure that all agreed terms are accurately captured in the contract, not just vaguely mentioned or framed as discretionary.
• If HR insists on a standard template, explore options like side letters or emails, but seek legal advice to ensure they are properly incorporated.

  "If I have negotiated a deal and the commercial terms are agreed upon for example a starting bonus right and I see the contract says that this is discretionary and employer has absolute discretion to change it reduce it remove it that is a red flag."

Strategic Negotiation and Knowing Your Worth [20:00]

• Negotiation is a skill that requires practice and developing a thick skin to ask for what you want.
• Understand your leverage: if the employer really wants you, use it to your advantage.
• Focus on key deal-breakers and negotiate sensibly to avoid being perceived as difficult.

  "It's about having a sensible discussion, knowing what you bring to the table, what they want, why they are trying to hire you, and then trying to find a nice balance in there that works for them and for you."