MOM proposes Leave Benefits for Contract Staff
Granting of leave benefits to term contract employees with long term working relationship
Term contract employees are entitled to statutory leave benefits under the Employment Act (EA), and the Child Development Co-Savings Act (CDCA), if they meet a minimum service period of 3 months without a break in service . These leave benefits are, annual leave, sick leave, maternity leave, paternity leave, adoption leave, childcare and extended childcare leave.
However, some term contract employees who have been working for the same employer for a long time do not get to enjoy these leave benefits, as they are on separate contracts that are each shorter than the minimum service period of 3 months, and renewed with a break in between the contracts.
Employers are encouraged to grant such term contract employees leave benefits accordingly:
(a) For contracts of 14 days or more, employers are encouraged to treat contracts renewed within one month of the previous contract as continuous2 , and grant or accrue leave benefits based on the cumulative term of the contracts. This means that if the cumulative term of the contracts exceeds the respective qualifying period as spelt out in the EA and CDCA, employers are encouraged to provide the relevant leave benefits to term contract workers.
In the above example, during the 4th one month contract where the employee has completed 3 months of service with company X, he will be entitled to:
- 2 days of paid annual leave (pro-rated based on 3/12 ×7)
- 5 days of paid sick leave (non-hospitalisation leave); or if hospitalisation is necessary, the lesser of the following: (i) 15 days of hospitalisation leave; (ii) the aggregate of 5 days plus the number of days on which he is hospitalised
- 2 days of paid childcare leave
Notifying in advance of intention not to renew contracts
For work arrangements that involve term contracts on a recurrent basis (i.e. contracts are renewed multiple times), it is good practice for both employer and employee to give sufficient notice3 before the contract’s expiry on whether either party wishes to renew the contract. This will allow sufficient time for either party to make alternative arrangements.
1 Term contract employees would need to satisfy the other eligibility criteria to qualify for the relevant leave benefits under the respective Acts.
2 Breaks between contracts will not be counted as service
3 The notice period that employers should give may be the same as the notice period required for early contract termination as mutually agreed, or in the absence of such an agreement, should be not less than:
a. one day’s notice if his cumulative employment is less than 26 weeks;
b. one week’s notice if his cumulative employment is 26 weeks or more but less than 2 years; c. 2 weeks’ notice if his cumulative employment is 2 years or more but less than 5 years; and d. 4 weeks’ notice if his cumulative employment is 5 years or more