Employment contracts are the cornerstone of every employer-employee relationship. These legally binding agreements set forth the terms and conditions of an individual’s employment.
However, employment contracts may result in conflicts, just like any other legally binding document. For all parties concerned, these disagreements may be costly, time-consuming, and even emotionally taxing.
In this article, we go over 5 common types of employment contract disputes you should know about.
1. Wrongful termination
Wrongful termination occurs when an employee believes they were fired in violation of their employment contract or for reasons that are not legal. The conditions under which an employee may be dismissed, such as for cause (including poor performance or misconduct), or without cause (such as layoffs), are usually outlined in employment contracts. A dispute can arise if the employer dismisses the employee without adhering to the terms of the contract or for reasons which are not legal.
2. Breach of contract
When one party doesn’t carry out his responsibilities as stated in the employment contract, there is a breach of the contract. Employment contracts may include specific information on duties, pay, perks, and non-disclosure agreements. If either party feels that the other party has failed to meet their contractual obligations, a dispute may arise.
For instance, an employee may file a claim for breach of contract if their employer fails to pay them in accordance with the terms of the contract. On the other hand, if an employee declines to carry out their work responsibilities or acts against the interest of the employer, the employer may also file a claim for breach of contract. It should be noted that the law implies certain terms into the employment contract – what this means is that even if it is not expressly spelt out, the law says that an employee owes certain duties to his employer or an employer owes certain obligations to his employee. For example, it is an implied term of the employment contract that an employee cannot work part-time for a competitor of his employer’s if it is against the interest of his employer and without his employer’s consent. It is also an implied term of the employment contract that the employer must ensure that the workplace is safe for his employees.
3. Disputes over wage
Disputes over wages can be a source of friction between employers and employees. The wage, payment schedule, and any other remuneration such as overtime pay, bonuses or commissions, are typically stated in employment contracts. Employees who feel that they were not paid correctly or in line with the contract requirements may have disagreements over their pay.
4. Discrimination and harassment
The law provides for non-discrimination and harassment even if these are not spelt out in the employment contracts. You can obtain more information on this from the website of Tripartite Alliance For Fair and Progressive Employment Practices (TAFEP).
An employee may file a complaint to TAFEP based on the violation of these contract conditions if he feels he has been the victim of discrimination or harassment by coworkers, managers, or the company. Alternatively, he can appoint a commercial litigation lawyer to obtain a court order to stop the harassment.
5. Non-compete clauses
Non-compete agreements are terms in employment contracts that prevent employees from competing with their employers when they leave the company, whether in starting their own competitive company or working for rival companies for a predetermined amount of time after leaving their present job. These clauses are meant to safeguard a company’s trade secrets, customer connections, and competitive advantage for a period of time upon the employee’s departure.
Employees should seek legal advice on the enforceability of the non-compete clause in their employment contracts because in some cases, it is possible to show that the non-compete clause is not enforceable if it is not reasonable in scope or duration.
Employment contract disputes can be complex and challenging, often requiring legal intervention to resolve. In particular, clauses in an employment contract may impede a person from moving on to other employment opportunities for a period. Thus, it is incredibly beneficial to appoint a lawyer to review your contracts. This helps the employee to know what are the clauses which apply or not apply when he leaves a company, which will allow him to plan his exit better. For employers, it is important to know their obligations under the employment contracts and to know what are the employment laws in Singapore which binds them without being needed to be stated in the employment contract.
Feel free to get in touch with us if you are looking for commercial litigation lawyers. We are a recognised and professional law firm that specialises in commercial litigation, general litigation, probate litigation and defamation law in Singapore.