Terms and Conditions in Contract of Service in Private Organisation/Bussiness/Enterprise

Contract of service may be oral or in writing (section 2 Employment Act 1955) (subjected to section 10)? However, under Regulations 5(b) and 8 Employment Regulations 1957 the following terms must be given to an employee in writing on or before the commencement of his or her employment:

(a)           Name of employee and National Registration Identification Card No;

(b)           Occupation or appointment;

(c)           Wage rates (excluding other allowances);

(d)           Other allowances payable and rates;

(e)           Rates for overtime work;

(f)            0ther benefits (including approved amenities and services);

(g)            Agreed normal hours of work per day;

(h)            Agreed period of notice of termination of employment or wages in lieu;.

(i)             Number of days of entitlement to holidays and annual leave with pay; and

(j)             Duration of wage period

   Other optional clauses:

(a)           Transferability

(b)           Retrenchment benefit

(c)           Confidentiality clause

(d)           Restraint of trade clause

By virtue of section 10 Employment Act 1955, a contract of service for a specified period of time exceeding one month or for the performance of a specified piece of work, where the time reasonably required for the completion of the work exceeds or may exceed one month, shall be in writing.  Section 10(2) of the same Act states further that  in every written contract of service a clause shall be included setting out the manner in which such contract may be terminated by either party in accordance with Part ii of the Act.

According to section 7 of Employment Act 1955, term or condition in the contract of service cannot be less favorable than those prescribed under the provisions of the Employment Act. Section 7 provides,

“Subject to section 7A, any term or condition of a contract of service or of an agreement, whether such contract or agreement was entered into before or after the coming into force of this Act, which provides a term or condition of service which is less favourable to an employee than a term or condition of service prescribed by this Act or any regulations, order or other subsidiary legislation whatsoever made thereunder shall be void and of no effect to that extent and the more favourable provisions of this Act or any regulations, order or other subsidiary legislation whatsoever made thereunder shall be substituted therefor”

Section 7A. Validity of any term or condition of service which is more favourable.

“Subject to any express prohibition under this Act or any regulations, order or other subsidiary legislation whatsoever made thereunder, nothing in section 7 shall be construed as preventing an employer and an employee from agreeing to any term or condition of service under which an employee is employed, or shall render invalid any term or condition of service stipulated in any collective agreement or in any award of the Industrial Court, which is more favourable to the employee than the provisions of this Act or any regulations, order, or other subsidiary legislation whatsoever made thereunder”.

By virtue of section 8 of the Act, contract of service must not restrict the rights of an employee to join, participate in the activities or in the organizing of a trade union.

Terms and Conditions in the contract of service for a specified period of time or for the performance of a specified piece of work shall, (unless otherwise terminated in accordance with Part 11 of Employment Act 1955) terminate when the period of time for which such contract was made has expired or when the piece of work specified in such contract has been completed. Further, a contract of service for an unspecified period of time shall continue in force until terminated in accordance with Part 11 of this Act.

For the purposes as above-mentioned, the relevan provisions in Part 11 (especially section 12-15) of Emploment Act 1955 are as follows:

Section 12. Notice of termination of contract.

(1) Either party to a contract of service may at any time give to the other party notice of his intention to terminate such contract of service.

(2) The length of such notice shall be the same for both employer and employee and shall be determined by a provision made in writing for such notice in the terms of the contract of service, or, in the absence of such provision in writing, shall not be less than-

(a) four weeks' notice if the employee has been so employed for less than two years on the date on which the notice is given;

(b) six weeks' notice if he has been so employed for two years or more but less than five years on such date;

(c) eight weeks' notice if he has been so employed for five years or more on such date:

Provided that this section shall not be taken to prevent either party from waiving his right to a notice under this subsection.

(3) Notwithstanding anything contained in subsection (2) , where the termination of service of the employee is attributable wholly or mainly to the fact that-

(a) the employer has ceased, or intends to cease to carry on the business for the purposes of which the employee was employed;

(b) the employer has ceased or intends to cease to carry on the business in the place at which the employee was contracted to work;

(c) the requirements of that business for the employee to carry out work of a particular kind have ceased or diminished or are expected to cease or diminish;

(d) the requirements of that business for the employee to carry out work of a particular kind in the place at which he was contracted to work have ceased or diminished or are expected to cease or diminish;

(e) the employee has refused to accept his transfer to any other place of employment, unless his contract of service requires him to accept such transfer; or
(f) a change has occurred in the ownership of the business for the purpose of which an employee is employed or of a part of such business, regardless of whether the change occurs by virtue of a sale or other disposition or by operation of law,

the employee shall be entitled to, and the employer shall give to the employee, notice of termination of service, and the length of such notice shall be not less than that provided under paragraph (2) (a) , (b) or (c) , as the case may be, regardless of anything to the contrary contained in the contract of service.

(4) 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.

Section 13. Termination of contract without notice.

(1) Either party to a contract of service may terminate such contract of service without notice or, if notice has already been given in accordance with section 12, without waiting for the expiry of that notice, by paying to the other party an indemnity of a sum equal to the amount of wages which would have accrued to the employee during the term of such notice or during the unexpired term of such notice.

(2) Either party to a contract of service may terminate such contract of service without notice in the event of any wilful breach by the other party of a condition of the contract of service.

Section 14. Termination of contract for special reasons.

(1) An employer may, on the grounds of misconduct inconsistent with the fulfilment of the express or implied conditions of his service, after due inquiry -

(a) dismiss without notice the employee; or

(b) downgrade the employee; or

(c) impose any other lesser punishment as he deems just and fit, and where a punishment of suspension without wages is imposed, it shall not exceed a period of two weeks.

         (2) For the purposes of an inquiry under subsection (1) , the employer may suspend   the employee from work for a period not exceeding two weeks but shall pay him not less than half of his wages for such period:

Provided that if the inquiry does not disclose any misconduct on the part of the employee the employer shall forthwith restore to the employee the full amount of wages so withheld.

         (3) An employee may terminate his contract of service with his employer without notice where he or his dependants are immediately threatened by danger to the person by violence or disease such as such employee did not by his contract of service undertake to run.

Section 15. When contract is deemed to be broken by employer and employee.

(1) An employer shall be deemed to have broken his contract of service with the employee if he fails to pay wages in accordance with Part Ill.

(2) An employee shall be deemed to have broken his contract of service with the employer if he has been continuously absent from work for more than two consecutive working days without prior leave from his employer, unless he has a reasonable excuse for such absence and has informed or attempted to inform his employer of such excuse prior to or at the earliest opportunity during such absence.