Writ of Seizure and Sale: Forcing Debtors to Pay Up in Singapore

writ of seizure and sale singapore

Lelong! Lelong! Lelong!

If you’ve just won a lawsuit, congratulations. If your opponent has not complied with the Court’s judgement, you can apply for a Writ of Seizure and Sale to take their property away, and recoup debts owed. If, however, you’ve just lost a lawsuit, then I offer my deepest commiserations. If you don’t pay your debts according to the Court’s judgement, your opponent has the right to seize your belongings, and sell them off to repay the money you owe. Depending on your case, this may even involve taking away personal assets like your house, car, and more (frightening – I know).

In all civil lawsuits, the winner (technically called the “Judgement Creditor”) is responsible for enforcing the judgement against the loser (“Judgement Debtor”). This means that although one party has won the lawsuit, the winner still needs to incur further expense and effort in making sure their opponent pays their debts.

One of the most popular methods of judgement enforcement is a Writ of Seizure and Sale (WSS).

In this guide, we’ll go over:

  • What is a Writ of Seizure and Sale?
  • What’s an example of a Writ and Seizure Sale?
  • How do Creditors determine a Debtor’s assets?
  • What can Creditors seize?
  • What can Creditors not seize?
  • How do Creditors get a Writ of Seizure and Sale?
  • Can Debtors temporarily pause a Writ of Seizure and Sale?
  • How is property seized?
  • How is property sold?
  • How can I protect myself from a Writ of Seizure and Sale?

What is a Writ of Seizure and Sale (WSS)?

A Writ of Seizure and Sale is a legal document authorizing the winning party to seize the losing party’s belongings. The winning party can apply to the Court for permission to do this, so that the winner can have their debts repaid. The Court will appoint Bailiffs (officers of the Court) who will assist in enforcement of the Court’s judgement.

Under Section 16 of the Subordinate Courts Act, the bailiff can forcibly enter the Judgement Debtor’s premises to seize his/her property. Property that is seized can be sold via auction to pay the debts owed.

If the Judgement Creditor believes the Debtor owns valuables physical assets, a Writ of Seizure and Sale can be a useful way to force the liquidation of these assets.

What’s an example of a Writ of Seizure and Sale?

In 2017, news broke of a businesswoman, Song Fan Rong, who was being sued for $9.5 million. Ms. Song was the founder of a chain of 8 kindergartens in Singapore. Ms. Song was being sued for defrauding three businessmen from China. She had made multiple misrepresentations of being able to help them acquire Singaporean citizenship, in exchange for the businessmen investing in her business. She lost the case.

Although it was not publicly revealed whether the creditors pursued a Writ of Seizure and Sale against Ms. Song, such an option would certainly have been open to them. The three businessmen could have filed for a WSS to seize the kindergartens. The kindergartens could then be auctioned off to recover the money they were cheated of.

How do Creditors determine a Debtor’s assets?

When considering whether to apply for a Writ of Seizure and Sale, a Judgement Creditor should first determine whether the Debtor has physical assets of value that could be sold. The Judgement Creditor will also need to understand the value of these assets, and where these assets are located. To do this, the Judgement Creditor can apply for the Court’s permission to examine the Judgement Debtor.

The Judgement Creditor can do this via the eLitigation system. If the Judgement Creditor has a lawyer, the lawyer will do these steps for them.

If the Court grants permission, the Court will order the Judgement Debtor to attend a Court session. The session will involve questioning the Judgement Debtor on:

  • What assets they own
  • The value of these assets
  • Where these assets are kept

This will allow the Judgement Creditor to decide whether it’s worth it (or not) to seize the assets and sell them off. Debtors can be imprisoned for not appearing at the examination.

What can be seized under a Writ of Seizure and Sale?

Almost all kinds of property can be seized. Property that can be seized are divided into two classes: movable vs immovable.

Writ of seizures for movable property include (but are not limited to):

  • Inventory
  • Machinery and equipment
  • Electronic equipment
  • Furniture
  • Artwork
  • Jewellery

Writ of seizures for immovable property include:

  • Buildings
  • Houses (HDB flats, condominiums, landed properties, etc.)
  • Land

What cannot be seized under a Writ of Seizure and Sale?

The following property cannot be seized under a WSS:

  • $1,000 worth of clothing, bedding, and tools of trade which belong to the Judgement debtor or their family must be left to them. Any combination of such items worth over $1,000 can potentially be seized.
  • Cannot seize Judgement Debtor’s salary/wages (however, bank accounts can be seized via “garnishee proceedings”, which is another type of legal enforcement for debts).
  • Cannot seize CPF, pensions, gratuities, or allowances provided for by the government.
  • Cannot seize Judgement Debtor’s shares in a registered Partnership.
  • If the Judgement Debtor is an artist, cannot seize tools that they need to earn a living (e.g. sculpting equipment for sculptors, pottery equipment for potters, etc.)
  • If the Judgement Debtor is a farmer, cannot seize their animals, crops, seeds, and farming tools.
  • Cannot seize HDB flat, unless the Judgement Creditor seeks permission from HDB.

How do Creditors get a Writ of Seizure and Sale?

There’s two methods to apply for a WSS.

Method 1: Online Application (most convenient)

Creditors can apply online using the eLitigation system. If you have a lawyer, they will likely do this for you.

Method 2: In-Person

If you prefer to do it in person, you can apply for a WSS at a CrimsonLogic Service Bureau.

This is located at 133 New Bridge Road, Chinatown Point #19-01/02, Singapore 059413.

Contact:

Phone: 6538 9607
Email: apollosb@crimsonlogic.com.sg

Operating hours:

Monday to Friday: 8:30am – 5:00pm
Saturday: 8:30 am – 12:30 pm
Sunday and Public Holidays: Closed

What are the types of Writ of Seizure and Sale?

There are 2 types of Writs of Seizure and Sale:

  • Writ of Seizure and Sale for movable property
  • Writ of Seizure and Sale for immovable property

Getting a Writ of Seizure and Sale for movable property

Usually, Creditors don’t have to apply for the Court’s permission specifically for movable property. When the Writ is granted by the Court, and the Bailiff has been engaged, most movable property can be seized upon entry into the Creditor’s premises.

However, there are some exceptions to this where permission is required.

Examples of such exceptions include:

  • The Judgement was delivered 6 or more years ago. It’s rare that one would wait that long to enforce the judgement, though.
  • The Judgement Creditor has passed away.
  • The Judgement Debtor has passed away. The Debtor’s assets have since been transferred to their family, executors or administrators.
  • If the Debtor has been making payments to the Creditor, but the Creditor disputes this and wishes to seize the Debtor’s property. Example: A Debtor has been making monthly payments to their Creditor. The Creditor disputes this, and wishes to seize the Debtor’s belongings to enforce the judgement. The Creditor will have to apply for permission from the Court and prove their case before they can seize the Debtor’s property.
  • When a Debtor enters bankruptcy, and their property is being handled by a receiver. Creditors must apply for permission, because Debtors may have multiple creditors. The receivers must balance the interests of the Debtor’s various creditors.

To apply for the Court’s permission to claim the above properties, Creditors must state the following to the Court:

  • Identify the specific Court judgement against the Debtor.
  • If the Court has awarded monetary damages, state the amount awarded, plus any interest accrued since then.
  • If the Judgement was delivered 6 or more years ago, and no enforcement action has been taken, explain why enforcement should now be taken.
  • Argue that the property to be seized does belong to the Debtor
  • Provide other supporting arguments on why the Judgement Creditor should have the right to enforce the Writ of Seizure and Sale

Getting a Writ of Seizure and Sale for immovable property

Immovable property refers to buildings, homes, and land. Creditors must apply for the Court’s permission to seize immovable property. Creditors should submit similar arguments to applications for seizing movable property.

There are some complexities with seizing and selling immovable property that Creditors should be aware of.

Firstly, Debtors can try to frustrate the auctioning process by repeatedly changing the locks on their seized property. Remember that the Bailiff does not actually have the power to possess the property. Before the property is auctioned off, the property is still owned by the Debtor. The Bailiff only has the power to forcibly enter the Debtor’s premises. In such scenarios, every time a Creditor has a potential buyer who wants to view the seized property, Creditors will have to send a locksmith to break the locks. This can be quite a hassle, adds yet another expense to enforcing the judgement, and makes for a poor experience for the potential buyer. The Bailiff must also be present at these viewings, which can be administratively cumbersome since both the buyers’ and Bailiff’s schedules need to be accommodated.

Secondly, if the Debtor’s seized property has a mortgage on it, the seized property cannot be auctioned off below the “forced sale value”. This is the minimum value that mortgage lenders (e.g. banks) expect to sell the property at. When seized properties are being auctioned, it’s not easy to get a fair asking price that is above the forced sale value, since buyers know the property is being auctioned off to pay debts. It is likely that Creditors will face a long-drawn auction process when trying to sell Debtor’s buildings, homes, or land.

Can an HDB flat be seized to repay creditors, under a Writ of Seizure and Sale?

HDB flats can only be seized if all the owners of the flat are not Singapore Citizens. If at least 1 owner of the flat is a Singapore Citizen, the flat cannot be seized. HDB flats owned by at least 1 Singapore Citizen are protected from seizure under Section 51(3) of the Housing and Development Act.

Can Debtors temporarily pause a Writ of Seizure and Sale?

Yes, but the keyword here is “temporarily”. If Debtors can prove that they do not have sufficient assets to repay the debts even via a seizure of their property, then they can apply for a “Stay of Execution” to the Court. If approved, the Court will issue an order to temporarily stop the Judgement Creditor from enforcing the Writ of Seizure and Sale. Durations of the stay can range from a few days to a few months, depending on the circumstances. But eventually, the stay will run out, and the debtor will have their property seized unless they repay the full amount of their debt.

Debtors who wish to apply for a Stay of Execution must explain the following points to the Court:

  • Judgement Debtor does not have sufficient assets to repay debts
  • Judgement Debtor’s income level is insufficient to repay debts
  • List of Judgement Debtor’s assets owned, along with their values
  • List of Judgement Debtor’s liabilities, along with their values

How is the Writ of Seizure and Sale executed?

If the Court approves the Creditor’s WSS application, the Bailiff will send the Creditor an appointment letter. This appointment letter will inform you of the date that has been fixed for you to meet the Bailiff, and other important details related to the Writ’s execution.

Before Creditors meet the Bailiff, they will need to pay a deposit of $300 (or the amount requested by the Bailiff) at the Finance Section of the State Courts. If you’re a Creditor, make sure you pay this deposit, otherwise the seizure cannot be carried out.

On the appointment date, either the Creditor, or their authorised representative, will need to provide the following items to the Bailiff:

  • The appointment letter that Creditors received from the Bailiff
  • The deposit receipt from the Finance Section of the State Courts
  • A Letter of Authorisation and Indemnity signed by the Creditor. If the Creditor is a business entity, make sure to apply the company stamp on the Letter.
  • If requested by the Bailiff, Creditors will need to pay for the Bailiff’s transportation fees to execute the WSS.

Entering the Judgement Debtor’s premises:

If the Debtor’s premises are not locked, the Bailiff will enter the Judgement Debtor’s premises. They will seize items by pasting an official sticker on items that are to be claimed for sale. If the Creditor accompanies the Bailiff, they can also point out items that they want to have seized.

After the items have been marked, the Bailiff will serve a notice on the Judgement Debtor ordering them to not touch, move, or otherwise interfere with the marked items. These items are seized and no longer belong to the Debtor.

If the Judgement Debtor’s premises are locked, or the Debtor resists the execution of the Writ of Seizure and Sale, the Bailiff will leave the notice of seizure outside the premises.

Although the Bailiff has the power to forcibly enter the Debtor’s premises, in practice, they usually will not break into the premises on their first trip to seize property. If the Bailiff cannot seize property on their first try, Creditors will have to apply for another attempt to seize property. Creditors will have to apply for a new appointment with the Bailiff, and pay the required application fees.

The Bailiff may choose to forcibly enter the premises on the second attempt onwards. Bailiffs are allowed to break down doors or windows to enter the premises. However, in practice, Bailiffs will usually bring a locksmith with them. Creditors must pay for the services of the locksmith if a forced entry is conducted.

What happens after the bailiff seizes the property?

After the seizure is conducted, the Judgement Debtor will have 7 days to pay the full debt owed to the Creditor.

If after 7 days the Creditor still has not received full payment, then the Creditor can auction off all the seized property. A large, legalised lelong, if you will.

What happens if someone else claims that seized property actually belongs to them?

Sometimes, seized property may belong to parties other than the Debtor. For instance, a third-party may have lent or stored their property at a Debtor’s office or warehouse. If a party (who is not the Debtor) claims that seized property is actually theirs, they will have to file a “Notice of Claim”. If Creditors want to dispute this claim, they must then file an “Interpleader Summons”. Both parties will present their case in Court, and the Court will decide ownership of the contested property.

If Creditors don’t file the Interpleader Summons, the party claiming the property will be allowed to simply reclaim their property.

How is seized property sold?

Creditors can apply for seized items to be auctioned off via the eLitigation system.

Creditors may have to submit a valuation of the seized items to the Bailiff. The Creditor must pay for expenses incurred in valuing the seized items (e.g. engaging an art appraiser to value seized art pieces).

The Bailiff will select an auctioneer to hold the auction, and put up a Notice of Sale. Creditors will have to contact the auctioneer at least 7 days, or 3 weeks (the Bailiff will inform the Creditor of this) before the auction. The Creditor must pay the auctioneer a service fee.

Auctions will usually be held within 3 to 5 weeks after the Notice of Sale is put up.

What happens if Creditors do not hold the auction?

If Creditors choose to not carry out the auction, then the Writ of Seizure will be terminated. The Bailiff will then have the authority to either keep all the seized items, or return them to the Debtor. The Bailiff can return some or all of the items, based on their discretion.

How much does applying for a Writ of Seizure and Sale cost?

The total costs depend on the specific Court that you are applying to.

Small Claims Tribunal / Employment Tribunal Magistrate’s Court State Court
Claim amount Under $20,000 (or $30,000 with the mutual agreement of both parties) Under $60,000 Under $250,000
WSS application fee $60 $155 $270
Undertaking, declaration and indemnity $10 $10 $10
Request for appointment with bailiff to conduct seizure $10 $50 $100
Request to hold auction for seized items $10 $10 $10

Misc. fees

Deposit $300 onwards $300 onwards $300 onwards
Bailiff fee $50 onwards $50 onwards $50 onwards
Bailiff transportation fee, if requested by bailiff Depends on distance to Debtor’s premises
Court commission (for seizure of items) $50 onwards $50 onwards $50 onwards
Court commission (for auction) $50 onwards $50 onwards $50 onwards
Auctioneer’s service fee For items worth under $2,000 in total: $150 onwards

 

For items worth over $2,000 in total: $800 onwards

Valuation fees Depends on seized property
Locksmith fees (if required for forcible entry) Market rate (likely $100 onwards)
Auxiliary police fees (if required to handle aggressive Debtors) Market rate
Total fees From $690 onwards From $795 onwards From $990 onwards

 

Creditors can recoup these expenses through the auction. Hopefully, the auction generates enough revenue for the Creditor to recover both the debt, and the additional expenses for enforcing the judgement.

Creditors should take note of these costs during the examination stage. If the assessment of the value of the Debtor’s property is not significantly higher than these costs, it is perhaps not worth pursuing a Writ of Seizure and Sale.

If the auction sale does not generate sufficient revenue to cover the Bailiff’s expenses in executing the seizure, the Creditor’s deposit (which is $300 or more) will be deducted accordingly.

What are some other methods of enforcing judgements?

Besides a Writ of Seizure and Sale, Singapore law provides for other methods that Creditors can use to make sure Debtors pay their dues. These include:

Garnishee proceedings:

Allows the Creditor to garnish (i.e. seize) money held in the Debtor’s bank accounts. Joint accounts may also be seized. This can be more useful than a Writ of Seizure and Sale if the Debtor doesn’t have a lot of physical assets to sell off.

Committal proceedings:

If the judgement involves commanding the Debtor to perform, or refrain from, certain acts, but the Debtor does it anyway, the Court can fine and/or jail the Debtor. For instance, a Court may impose a Mareva Order on a Debtor, which is a command for the Debtor to not to sell off any assets, so that Creditors can lay claim to these assets. If the Debtor defies the Order and sells their assets, the Court can punish them. A good example of this is the case of Song Fan Rong, mentioned near the beginning of this guide. Ms. Song was accused of defrauding several Chinese businessmen. She owned 8 kindergartens, and was given a Mareva Order by the Court, which prohibited her from disposing of her assets. She was jailed for 12 months when she tried to sell off her assets secretly, so that her debtors would not be able to reclaim their debts from her.

How can I protect myself from a Writ of Seizure and Sale?

Isn’t it absolutely frightening to think that someone else could seize your property for sale? This is doubly frightening if you run a Sole Proprietorship, because there is no separation of liability between your company and personal assets. Even if you operate a Pte. Ltd., the limitation of liability can be set aside by the Court in specific circumstances (called “piercing the corporate veil”, in legal terminology). When that happens, you become personally liable for your company’s debts. That means your house, car, bank savings, wages, and other personal belongings can be seized.

As a business owner, it’s critical that you take up Professional Indemnity Insurance to protect yourself from ever having to endure a Writ of Seizure and Sale. It is a thoroughly humiliating experience to go through.

With Professional Indemnity Insurance, the insurance company will pay for your legal defense, and also your damages/settlement costs. This means the other party won’t need to apply to seize your belongings, because the insurer will pay for damages if you lose the case.

Professional indemnity insurance protects you from a broad range of lawsuits, including (but not limited to):

  • Negligence lawsuits
  • Errors & omissions lawsuits
  • Defamation lawsuits
  • IP infringement lawsuits
  • Lawsuits related to subsidiaries
  • Employee dishonesty lawsuits
  • Breach of confidentiality lawsuits
  • …and much more

Buy Professional Indemnity Insurance online in 3 mins. From only $42/month!

 

Categories Law

Non-Disclosure Agreements (NDAs) in Singapore: 7 Must-Knows

non disclosure agreement

Non-Disclosure Agreements (NDA) are an important way to protect a company’s trade secrets. They prevent people from leaking private information, and potentially even profiting off it at someone else’s expense. It’s a good idea to have your employees and vendors sign Non-Disclosure Agreements when they work with you. If someone signs an NDA with you and breaches it, you can sue them for it. Of course, the same also holds true if you breach an NDA. In such scenarios, you can be held liable, and face a very expensive lawsuit. We explain what an NDA is, the key things you should include in an NDA, what to do if you (or someone else) breaches an NDA, and more.

We’ll go over:

  • What is a Non-Disclosure Agreement?
  • What are the different types of Non-Disclosure Agreements?
  • What is the purpose of an Non-Disclosure Agreement?
  • What terms should a Non-Disclosure Agreement have?
  • How can you stop others from breaching a Non-Disclosure Agreement?
  • What happens if you breach a Non-Disclosure Agreement?
  • How can you protect yourself from breach of confidentiality lawsuits?

What is a Non-Disclosure Agreement?

A Non-Disclosure Agreement is a legal contract between two parties to keep information confidential. Each party that signs an NDA must not disclose the information specified in the NDA. If a party breaches the NDA terms, they can be sued for breach of confidentiality.

What are the different types of Non-Disclosure Agreements?

There are two types of NDAs in Singapore:

  1. Unilateral NDA
  2. Mutual NDA

Type 1: Unilateral NDA

This is the most common type of NDA. A unilateral NDA is a one-way agreement where Party A agrees to protect Party B’s information. However, Party B doesn’t have an obligation to protect Party A’s information.

This is commonly seen in employers requiring their workers to sign NDAs. Unilateral NDAs are also commonly used when clients engage external contractors to work on sensitive projects.

Type 2: Mutual NDA

A mutual NDA is a two-way agreement where Party A and Party B must each protect each other’s information. For instance, two companies that embark on a joint venture may sign a mutual NDA. Two business associates who decide to start a company may also sign a mutual NDA.

What is the purpose of a Non-Disclosure Agreement?

An NDA protects information that you don’t want others to know about. Importantly, because an NDA is a contract, it provides you with a means to hold the other party legally accountable if they breach these terms. An NDA provides you legal grounds to sue for damages, negotiate a settlement, or claim some kind of compensation for losses you suffer from confidentiality breaches.

What terms should a Non-Disclosure Agreement have?

NDAs generally contain the following essential terms:

Scope of agreement:

This sets out the definitions and list of confidential information which will be covered by the NDA. It also lists the information which won’t be covered by the NDA (i.e. can be revealed).

The scope of agreement lays the foundation of what information is (or is not) considered confidential. If a party breaches the NDA, the scope of agreement will play an important role in determining whether the information that was leaked was indeed protected by the NDA.

Usually, parties will include the following as protected by the NDA:

  • Intellectual Property (IP) and trade secrets
  • Company financials
  • Product/strategy roadmap
  • Customer database
  • Employee database
  • Source code (if applicable)
  • Product components and manufacturing processes (if applicable)
  • Supply chain information
  • Passwords and other access codes
  • Details of company operations
  • Internal company communications
  • Information about third-parties related to the business, e.g. marketing partners
  • Other sensitive information that should not be made public

Typically, the following will be excluded from the NDA:

  • Information that the recipient already knows before signing the NDA
  • Information required to be disclosed to law enforcement or the government
  • Information that is generally available in the public domain
  • Personal particulars of the parties signing the NDA

The law does not restrict the kind of information that an NDA can cover. As long as both parties sign the document willingly, the information contained in the NDA will be protected.

Obligations of signatories:

This is the meat of the NDA. This section sets out the responsibilities which the parties of the NDA must abide by.

These obligations will specify restrictions/prohibitions on the use of confidential information. It will also state the circumstances in which information may be released, and to whom it may be released.

Some common examples of what the obligations section will include:

  • Only allow parties to use confidential information for the benefit of the company.
  • Prohibit parties from using confidential information for their own personal gain.
  • Prohibit parties from sharing confidential information with third-parties, without permission.
  • Prohibit parties from transferring confidential information to others after they leave the company. Confidential documents must be returned or destroyed upon termination of employment/professional engagement with the company.
  • Allow selected disclosure of confidential information only to specific persons (e.g. colleagues, law enforcement, government, white-listed individuals, etc.).

These obligations must be stated in the NDA. If they are not stated, the Courts can deem the NDA invalid.

Duration of NDA:

There are two parts to the duration of an NDA: i) duration of the NDA itself, and ii) post-NDA confidentiality period. These two periods must be stated in the NDA.

The duration of the NDA itself could last for as long as the business relationship is being carried out. For employees, this duration is usually while they’re employed. For joint-ventures, it’s usually for as long as the JV is in existence.

The post-NDA confidentiality period (technically called the “term of continued confidentiality”) will extend beyond the NDA. This post-NDA confidentiality period is usually 2 to 5 years. Generally, one will find it difficult to enforce a lifelong continued confidentiality period.

Example: Tim is employed in a 2-year contract with your company. Tim signs an NDA for the duration of his employment, plus a continued confidentiality period of 5 years. Tim must therefore not divulge any confidential information revealed to him for a total of 7 years.

Prohibition against assignment:

An NDA should state that it does not transfer any rights, licenses, or ownership to the parties receiving the confidential information. This is meant to prevent arguments that signing an NDA, and receiving the confidential information, qualifies the recipient as being an owner of the confidential information.

Applicable law and governing jurisdiction:

The NDA should clearly state which laws will govern the Agreement. For Singapore companies, it’s ideal to use local law, unless there are some special circumstances where you need to have a foreign law oversee the NDA.

Limitation of liability:

Limits the liability of the signatories of the NDA. Often seen in unilateral NDAs.

How can you stop others from breaching a Non-Disclosure Agreement?

Sometimes, other parties may breach an NDA that they’ve signed with you. For example, a disgruntled employee may quit to join a competitor, and start poaching your customers using their knowledge of your clients. A co-founder may fall out with you, and start their own competing business using confidential technology you developed. You can contact a lawyer to get an injunction against the offending party to stop divulging, or using, the confidential information. An injunction is a legal order to stop doing something. The injunction can also compel the offending person to destroy the confidential information.

Besides only relying on an NDA, you should take additional steps to stop your private data from being misused in the first place. Here are some tips that you can implement to safeguard your confidential data:

  • Be very careful about which employees can access private information. Set permissions to allow only designated employees to view private information, and only an allotted segment of the universe of private information. For instance, only allow salespeople to access their own customers, and not the entire customer database. Don’t allow anyone in your company to access your entire customer database, unless absolutely necessary.
  • Encrypt important documents. This means only individuals whom you’ve given the password to can access it. You can also disable printing for such documents to hamper offline dissemination. Dishonest individuals can still take photos or screenshots, but if you’ve got 10,000 pages of confidential data, it will take time and be difficult to copy it all. The goal is to make it as difficult as possible to discourage leaks.

What happens if you breach a Non-Disclosure Agreement?

If you breach an NDA, the same legal actions above will be taken against you. If someone else finds out they you’ve leaked confidential information, or are using confidential information in ways you’re not supposed to, they can sue you for it. The other party can lodge an injunction to get you to stop spreading or using the private information. Also, the other party can demand compensation for losses they’ve suffered as a result of this breach of confidentiality.

Such lawsuits can easily set you back hundreds of thousands, or even millions, of dollars. Lawyer’s fees alone will be tens or hundreds of thousands. Add to that the potential cost of damages, and you could be facing a huge bill that you might not be able to pay.

How can you protect yourself from breach of confidentiality lawsuits?

If you’ve signed an NDA and run a business, make sure that you carry Professional Indemnity Insurance. This type of coverage protects you from a very a wide range of business-related lawsuits, including lawsuits for breach of confidentiality. You may break an NDA inadvertently. The scary part is you may not even have broken the NDA, but the other party accuses you of doing so. You don’t have any control over whether someone else sues you for breaking the NDA, but you do have control over the defenses that you can mount against such lawsuits.

Professional Indemnity Insurance pays for:

  • Lawyer’s fees (which can be hundreds of thousands, if not millions!)
  • Damages/settlements (also can cost hundreds of thousands or millions)

Professional indemnity insurance covers a wide range of lawsuits, like:

  • Breach of confidentiality lawsuits
  • Negligence lawsuits
  • Errors & omissions lawsuits
  • Defamation lawsuits
  • IP infringement lawsuits
  • Lawsuits related to subsidiaries
  • Employee dishonesty lawsuits
  • …and much more

Buy Professional Indemnity Insurance online in 3 mins. From only $42/month!

Categories Law

What Is A “Without Prejudice” Letter & How Should You Respond?

without prejudice

If you are involved in a dispute or negotiation, you may receive a legal letter with the words “without prejudice”. It’s very important that you handle your response to such a letter with great care. The concept of “without prejudice” is an important one in lawsuits. We’ll discuss the meaning and implications of this legal term in this article.

We’ll explain:

  • What does “without prejudice” mean?
  • What does “without prejudice save as to costs” mean?
  • What is the purpose of “without prejudice” rules?
  • When is a letter considered to be “without prejudice”?
  • Can “without prejudice” rules be struck down?
  • How should I protect myself from lawsuits?

What does “Without Prejudice” mean?

A “without prejudice” letter is sent to settle a legal dispute between two parties. The label of “without prejudice” means that if the dispute ends up in court, you can’t use these “without prejudice” letters as evidence against the other party.

“Without prejudice” labels thus function as protection for specific communications that could potentially be damaging if brought into a lawsuit. However, this protection is not universal, and can be ignored in specific situations. We talk about this more in a later section.

What does “Without Prejudice Save as to Costs” mean?

A “without prejudice save as to costs” label means that the letter can only be produced as evidence after judgement has been delivered, but before damages to be awarded have been finalised. Such letters are used during the process of determining damage amounts/legal costs to be awarded for the party that won the case.

Example: You’re involved in a legal dispute with another party who damaged your business property. The other party sends you a “without prejudice save as to costs” letter, offering to pay $30,000 to settle the dispute. You reject the offer as it’s too low. The dispute goes to Court. The Court decides to award you $20,000 instead. Your lawyer could then introduce this “without prejudice save as to costs” letter as evidence. Your lawyer could argue that the other party should pay all your legal costs on top of the $20,000 court-awarded damages. This is because all of the legal costs the other party has incurred in fighting the lawsuit could have been avoided if they had just settled earlier on.

A “without prejudice save as to costs” letter is often used to pressure the other party into accepting a settlement offer. This is because the other party will know that if they receive and reject such an offer, there is a possibility that their rejection can be used in Court as evidence against them. A “without prejudice save as to costs” letter provides leverage for parties to consider reasonable negotiation offers, and not just make unreasonable compensation demands.

If you’ve received a “without prejudice save as to costs” letter, discuss the offer with an experienced lawyer. If you don’t handle the negotiation properly, and you lose the case, this “without prejudice” letter (and your response to it) may be used by your opponent to increase the damages you have to pay. For more information on protecting yourself against legal action, read our guide on how to defend a lawsuit.

What is the purpose of the “Without Prejudice” rule?

The purpose of the without prejudice rule is to allow parties to negotiate honestly, in confidence and good faith, so that the matter can be resolved without evolving into a lawsuit.

“Without prejudice” rules allow parties to make sincere offers for settlements or compensation. Parties don’t have to worry that these offers will be used against them in Court. For instance, let’s say you’re involved in a contractual dispute, and you make an offer to settle for $100,000. The offer was a sincere negotiation effort and qualifies as “without prejudice”. If the other party takes the dispute to trial, you won’t have to worry about your $100,000 settlement offer being used as a benchmark figure, so that the other party can argue for even higher compensation amounts.

This helps disputing parties to come to amicable settlements without the cost and effort of going to Court.

How does a letter qualify to be “without prejudice”?

Simply slapping on these two words doesn’t automatically make something “without prejudice”. The letter needs to meet a few key criteria to be truly protected from being admitted into Court as evidence.

Here are some key qualities:

  • Letter must involve a negotiation
  • Letter must be made in a genuine attempt to resolve the negotiation/dispute

Also, the label “without prejudice” doesn’t need to be explicitly stated on the letter for it to be protected from Court admission. It just needs to fulfil the criteria above. Writing the labels ““without prejudice” simply makes it easier during the lawsuit to identify which documents are clearly earmarked for protection. If all communication didn’t carry the “without prejudice” labels, then parties would have to sort through potentially thousands of documents to determine which ones are protected.

When does the “Without Prejudice” protection not apply?

It’s important to note that “without prejudice” protections are not universal. Letters with the label “without prejudice” can still be admitted in Court as evidence, if they are not genuinely made in the spirit of attempting to negotiate a solution.

Let’s take a look at a good example of this. In the case of Buckinghamshire County Council v Moran [1990] 1 Ch 623, a council sued a homeowner for illegally encroaching on council property. The plaintiff (the party initiating the lawsuit) was a council which had purchased a plot of land, to be used later for constructing a road. The defendant (the party being sued) had a house that was connected to the council’s plot of land. The defendant started using the land for his own purposes. The council found out about this, and put the defendant on notice to stop his illegal actions. The defendant responded with a letter to the council marked “without prejudice”. The defendant’s letter stated that he had a right to use the land, until the council built the road.

The Court ruled that the defendant’s letter was not “without prejudice”, because it was not an attempt to negotiate a settlement. Rather, the letter was merely asserting the defendant’s right to use the land until the council used it for their own purpose. This example illustrates very well that point that “without prejudice” letters must be attempts at negotiation. Merely stating one has a right to this or that may not qualify a letter as “without prejudice”. Now, had the defendant attempted to negotiate with the council (e.g. on whether he could compensate the council, or use a small portion of the land), that letter might well have been counted as “without prejudice”, and thus been prevented from being used as evidence in Court. The defendant lost the case. He had to pay for the council’s lawyer’s fees and other legal expenses.

Some other scenarios where “without prejudice” rules don’t apply:

  • Waiver through mutual consent: If both parties agree, “without prejudice” letters can be made admissible as evidence. The entire document must be waived – parties cannot agree to waive only a portion of a document. When a “without prejudice” letter becomes admissible, other related documents may then become admissible also. This can trigger a large wave of fresh evidence to be introduced to the Court.
  • Dishonest case: If a party is pursuing a case built on false evidence/claims/statements, or a party has committed a criminal act, then the Courts can remove “without prejudice” protections.

What should I do if I get a “Without Prejudice” letter?

If you don’t have liability insurance, contact a lawyer immediately. It’s probably not the best idea to respond to such a letter without first speaking to an experienced legal professional. If you don’t handle your response correctly, it could be used as evidence against you in Court.

If you have Professional Indemnity Insurance, contact your broker or insurer ASAP. Your insurance company will provide you with assistance as part of your policy protections. This can come either in the form of in-house lawyers, referral to lawyers, and/or paying for you to engage your own lawyers.

Protect yourself from business lawsuits now

We’ve established that “Without prejudice” letters must be handled very carefully. It’s a highly technical area of the law, with potentially massive implications for whether you win, or lose, a lawsuit. It also has significant impact on determining the amount of damages you have to pay, should you lose the lawsuit.

If you run a business, strongly consider taking up Professional Indemnity Insurance. This type of coverage protects you from a very a wide range of business-related lawsuits.

Professional Indemnity Insurance pays for:

  • Lawyer’s fees (which can be hundreds of thousands, if not millions!)
  • Damages/settlements (also can cost hundreds of thousands or millions)

Professional indemnity insurance covers a wide range of lawsuits, like:

  • Negligence lawsuits
  • Errors & omissions lawsuits
  • Defamation lawsuits
  • IP infringement lawsuits
  • Lawsuits related to subsidiaries
  • Employee dishonesty lawsuits
  • Breach of confidentiality lawsuits
  • …and much more

Buy Professional Indemnity Insurance online in 3 mins. From only $42/month!

Categories Law

Starting Sole Proprietorships in Singapore: 4 Easy Steps

how to start a sole proprietor

Thinking about starting a sole proprietorship in Singapore? Sole proprietor companies are a simple and easy way to get your business off the ground. In this guide, we’ll go through all the steps you need to start your very own sole proprietorship.

The 4 steps to start a sole proprietor business in Singapore are:

  • Reserving a name for your sole proprietor company
  • Registering an address
  • Appoint a local authorized representative, if you’re living outside of Singapore
  • Register your business with ACRA

We’ll also answer some common questions, like:

  • What is a sole proprietorship?
  • Why should I set up a sole proprietorship?
  • Who can set up a sole proprietorship?
  • What should I do after setting up my sole proprietorship?
  • Can foreigners start a sole proprietorship?
  • Can I use my home address to register my sole proprietorship?
  • What is the tax rate for sole proprietors?
  • Can sole proprietors set up subsidiaries?
  • Can sole proprietors raise capital for business expansion?
  • What compliance obligations do sole proprietors have?
  • What are the pros and cons of a sole proprietorship?
  • How do I protect my sole proprietor company?

Step 1: Reserving your sole proprietorship name

It costs $15 to reserve your name with ACRA. It’s easy to do via ACRA’s online BizFile+ portal.

Here’s the steps:

  1. Go to BizFile+ (log in using SingPass. If you’re a foreigner and don’t have one, contact a corporate secretarial company to help you with this).
  2. Submit your name application
  3. Pay the fee
  4. Wait 1-14 days for the name to be approved

Rejection of company names:

If your name gets rejected, you can file an appeal. It will cost you another $15 per appeal.

There are no refunds for rejected names, or rejected appeals. Get it right the first time to save yourself money.

Disallowed company names:

To get your name approved quickly, without hiccups, ensure that your chosen business name is:

  • Not already reserved by someone else
  • Not identical to, or very similar to existing business names
  • Not infringing upon trademarks, copyright, or other intellectual property
  • Not prohibited by the Minister of Finance – e.g. “Temasek” is not allowed in business names
  • Not vulgar, obscene, sexually explicit, or generally offensive

Also, names that include controlled words like “bank”, “school”, “university”, etc. will take additional time for approval. If you want this done fast, don’t include these words in your application.

Validity of business names:

Once approved, your name is reserved for 120 days (4 months). If you don’t get to step 4 (registering with ACRA) within 120 days, your name will be released and you’ll have to fork out another $15 to reapply.

Step 2: Registering business address

You’ll need to register an official business address in Singapore with ACRA. If you live in Singapore, you could potentially use your home address. HDB has a scheme for HDB dwellers to use their flat as their business address. URA has a scheme for private home dwellers to use their condominium/landed property as their business address. It’s convenient to use your home address, but it’s not great for privacy, because this information will be made publicly available.

A better option is to use a virtual office. Many corporate secretarial firms in Singapore will offer you a virtual office address. This is an official-looking address (frequently in the CBD) that you can use as your business address. Depending on the extent of services offered by your corporate secretary, you can even receive mail, have your mail scanned and emailed to you, and even entertain visitors in-person. Check out our guide on Singapore’s top 5 online corporate secretaries, and learn more about Singapore’s 5 cheapest virtual offices.

Step 3: Appoint an authorized representative (only if you’re not living in Singapore)

If you’re residing outside of Singapore, then you’ll need to appoint an authorised representative who is ordinarily resident in Singapore. This authorized person must be:

  • A Singapore citizen, OR
  • A Singapore PR, OR
  • An Employment Pass/EntrePass holder

The authorized person must also be at least 18 years old.

You must also engage a registered filing agent (e.g. a corporate secretarial firm, or a lawyer) to submit your application on BizFile+.

Step 4: Registering your sole proprietorship with ACRA

Registering your business will cost you $115 (1-year validity), or $175 (3-year validity). If you’re in this for the long-haul, go with the longer registration to enjoy good savings.

To register with ACRA, log on to BizFile+. You’ll need to provide the following documents:

  • Approved business name
  • Description of business activities
  • Registered business address in Singapore
  • Home address of sole proprietor owner
  • Scanned copy of ID (e.g. NRIC, passport, etc.)
  • Statement of Non Disqualification

The online process to register with ACRA takes under 15 minutes generally. The entire process can be done within 1 day, if you have all the necessary documents at hand.

Documents Issued by ACRA

Once ACRA has approved your business registration, they’ll send you an email confirming your new business profile. Congratulations! You’ve officially registered your new sole proprietorship. You can then use your profile to do all the other necessary tasks, like signing up for a bank account.

Step 5: Key things to do after registering sole proprietorship

Open a business bank account

Once you’ve officially registered your sole proprietorship, you should open a bank account for doing business. It’s a good idea to keep your business account separate from your personal bank account.

You can choose from the multitude of local, regional, or global banks located here. DBS, Morgan Stanley, OCBC, etc. are all good brand names to consider. You should note that most banks require the business owner to be physical present in the bank to open the account.

Banks will usually ask for the following documents:

  • Completed bank account application form
  • Copy of owner’s identification (NRIC, passport, etc.)
  • Latest copy of your ACRA profile
  • Minimum deposit amount. Will vary depending on the specific account type and bank. Could be as low as $250, and up to $5,000 onwards.

Frequently asked questions on sole proprietorships

What is a sole proprietorship?

A sole proprietorship is the simplest type of business in Singapore. Unlike a Pte. Ltd. business, a sole proprietorship does not offer its owners the protection of limited liability. Sole proprietors have unlimited personal liability for actions performed by their company.

Why should someone set up a sole proprietorship?

Sole proprietorships are good only for business owners who run very small-scale operations. Typically, these are one or two-man shows. They could also be part-time businesses that the owner doesn’t put a lot of time into.

Sole proprietorships are the easiest and cheapest type of corporate entity to set up. It costs $115 to set up a sole proprietorship, compared with $315 for a private limited.

The minimal compliance is another draw for sole proprietors. Private limiteds have to file annual returns with ACRA. Generally, these returns are prepared by an accountant or a corporate secretary, and such services typically cost $300 to $500 for each round of filing. However, sole proprietorships don’t have to file these annual returns. This saves the owner time and money.

Who can set up a sole proprietorship?

To register a sole proprietorship, you have to be either a:

  • Singapore-registered company that is not another sole proprietor (e.g. a Pte. Ltd. setting up a sole proprietor subsidiary), OR
  • Singapore citizen, Singapore PR, or Employment Pass/EntrePass holder. You must also be at least 18 years old.
  • Foreigners can also be sole proprietors. If you’re a foreigner, skip to the next section.

Sole proprietors must appoint at least one company representative who is 18 years or older. This person must be ordinarily resident in Singapore. In most cases, the owner will appoint themselves as the company representative capacity.

Can foreigners set up a sole proprietorship?

Yes, but there are certain steps foreigners must take.

Foreigners residing outside of Singapore:

When registering a sole proprietorship, you must appoint at least one person living in Singapore to be your authorized representative. This person must be a:

  • Singapore citizen, OR
  • Singapore PR, OR
  • Employment Pass/EntrePass holder

You must also engage a registered filing agent (e.g. a corporate secretarial firm, or a lawyer) to submit your application on BizFile+.

Foreigners residing in Singapore:

When registering a sole proprietorship, you must appoint at least one person living in Singapore to be your authorized representative. This person must be a:

  • Singapore citizen, OR
  • Singapore PR, OR
  • Employment Pass/EntrePass holder

You must also engage a registered filing agent (e.g. a corporate secretarial firm) to submit your application on BizFile+.

Can I use my home address to set up my sole proprietor?

Yes you can. There are two home office schemes in Singapore. If you live in HDBs, apply for the HDB Home Office Scheme. If you live in a private property (condo or landed), apply for the URA Home Office Scheme. Both owners and renters are eligible for these schemes.

A local Singapore address needs to be used to as the business address.

What is the tax rate for sole proprietors?

Profits of the sole proprietorship are taxed at the personal income tax rate of the owner. This is because in the eyes of the law, both the sole proprietor entity and the owner are one person. A Pte. Ltd. has a 8.5% corporate tax rate for profits under $300,000 and a 17% tax rate for profits above $300,000. Personal income tax rates start from 0% all the way to 22%.

If you draw a salary as an owner of a sole proprietorship, you will not face double-taxation. If you draw a salary as an owner of a Pte. Ltd., you will face double taxation. Your Pte. Ltd. profits are taxed at the corporate rate, and your salary is taxed at your personal income tax rate.

The key implication for this is that at most income levels, you’ll probably end up paying a higher effective tax rate while running a sole proprietorship. For instance, let’s take a look at an example of two business owners earning the same amount of profit ($320,000/year). Businessman A runs a sole proprietorship, while Businessman B runs a Pte. Ltd.

Sample Comparison of Effective Tax Rates for Sole Proprietorship vs Private Limited

  Sole Proprietorship Pte. Ltd.
Profit $320,000/year $320,000/year
Effective tax rate 13.9% 9.0%
Effective tax amount $44,450 $28,900
Difference +4.9%, or +($15,650)

 

For the owner of the private limited, they can decide to draw their income by declaring dividends. Dividends are not subject to personal income tax. This lowers the effective tax rate of the private limited owner to just 9%. The limitations of this strategy are that the private limited has to be profitable (it’s illegal to declare dividends if the company reports a loss), and the owner has to seek agreement with other shareholders/directors when deciding on the dividend amount. Both these factors may get complicated, depending on your individual circumstances. However, this example does show that if you’re running a profitable company, and have agreeable shareholders, running a sole proprietorship is not as profitable tax-wise compared to a private limited.

Can sole proprietors set up subsidiaries?

A sole proprietorship is not a standalone legal entity. It is part of the legal persona of its owner. Therefore, a sole proprietorship cannot set up a subsidiary.

What compliance obligations do sole proprietors have?

Compliance requirements for sole proprietors is quite light. Here are the key list of requirements (or the lack thereof):

  • Sole proprietors need to renew their ACRA registration annually. This is similar to Pte Ltds.
  • Sole proprietors do not need to audit their accounts, or file annual returns with ACRA. This is because profits are counted as personal income.
  • Sole proprietors should ensure all company letterheads, invoices, etc. carry their UEN number.
  • Sole proprietors should update ACRA on changes to business details (e.g. change of address, change of business activity, etc.) within 14 days of the change occurring. Late notifications may result in a penalty, so don’t put this off.

Can sole proprietors raise capital for business expansion?

Equity capital: No. Sole proprietors have only one owner, and cannot take on additional shareholders.

Debt capital: Yes. However, getting a loan for a sole proprietor is usually more difficult than other types of businesses. Banks and other capital providers are typically less keen to extend loans. Even if they do loan you money, they will loan smaller amounts, or impose stricter loan conditions.

It’s generally not as easy to get capital to expand sole proprietorships compared to private limiteds or other business types. Then again, if you’re setting up a sole proprietorship, business expansion probably isn’t on the top of your priorities.

Pros and cons of sole proprietorships

Summary of pros vs cons of sole proprietorships

Pros Cons
Easiest to set up compared to all other types of business entities. Unlimited personal liability for all actions taken by company
Cheapest to set up compared to all other types of business entities. No corporate tax benefits. For instance, you cannot benefit from tax-loss carry forwards if you declare a loss for a financial year.
Complete control of all aspects of business. No Board of Directors to report to. No other shareholders to object. Cannot take on shareholders. This limits the ability of the business to raise equity capital for expansion.
Easiest to strike off business compared to all other types of business entities. Potentially has higher personal income tax rate than corporate tax rate (17%), depending on profits of the sole proprietor.
Least amount of compliance compared to all other types of business entities.

 

No need to file annual returns.

Business does not carry on in perpetuity. The business and the owner are considered one person (in the eyes of the law), and so the business will cease to exist if you pass away.
No double-taxation. Profits are taxed at personal income tax rate, and only taxed once. Poor for public relations. Sole proprietorships are taken less seriously by customers, suppliers, employees, the public, and other stakeholders in general. May be more difficult to win big accounts, or hire top-tier talent compared to a Pte. Ltd.
No need to share profit with other shareholders/investors, as there are none. Owner takes home 100% of after-tax profit. More difficult to transfer business to another owner. Cannot transfer by shares. Can only transfer by selling business assets.

 

Should I set up a sole proprietorship?

A sole proprietorship is good if you’re running a very small business (or part-time business). It’s also good if you want the most minimal amount of fuss, since compliance requirements are the lowest amongst all business types. However, the fact that sole proprietorships attach unlimited liability to the owner should give you some pause. The amount of compliance needed for a private limited is not significantly higher (Singapore is an easy place to do business), and the cost of registering a private limited is also only marginally higher. If you’re intending on building a big business, then a sole proprietorship may be an acceptable choice for you.

Protect your sole proprietor business

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Covers building structure, renovations, fixtures & fittings, equipment, & more.

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Public Liability Insurance Covers lawsuits related to injuries or property damage to third-parties (e.g. members of the public). From $9/month
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From $5/month, per worker

 

How To Remove Shareholders in Singapore: 3 Quick & Legal Methods

remove shareholder

Sometimes, companies need to remove shareholders. Shareholders may have disagreements with the company’s directors, or with other shareholders. They may choose to block a sale of your company, block an acquisition you’re trying to make, or in general just make life very difficult for you. Disagreeing shareholders can impact your company’s profitability, and potentially even affect the value of the shares you own.

Generally, removing a shareholder involves some form of buying out the other party’s shares. In well-drafted Shareholder Agreements, these share purchase will be provided for under special “buy-out clauses” or “escape clauses”. Only in certain circumstances can you remove a shareholder without their consent, and without compensating them appropriately. Usually, such circumstances involve the shareholder breaching their Shareholder Agreement.

Companies cannot simply just eject shareholders because they want to. Shareholders are owners of the company (to the extent of how many shares they own), so you can’t fire them like you would an employee, or Board Director. Think about it this way: if you invested your hard-earned money into another business, or a stock, how would you feel if other shareholders had the power to unilaterally terminate your ownership? The law recognises the significance of ownership rights, which is why it is very difficult to remove a shareholder without their consent.

Here’s what we’ll go over:

  1. Commence legal proceedings if shareholder breached Shareholder Agreement
  2. Remove shareholder via terms found in the Shareholder Agreement
  3. Remove shareholder by buying their shares
  4. FAQ section on removing shareholders
  5. Considerations before taking on shareholders
  6. Key takeaways
  7. Protecting your directors and officers from shareholder lawsuits

Method 1: Remove shareholder via lawsuit, if shareholder breached Shareholder Agreement

A Shareholder Agreement is a legally-binding contract between all of a company’s shareholders. The Shareholder Agreement sets out a list of key responsibilities that all shareholders must abide by. If shareholders breach a part of the Agreement, other shareholders can sue them.

For instance, many Shareholder Agreements often contain a “Right of First Refusal” provision. This provision means shareholders must first offer shares for sale to fellow shareholders, before selling to outsiders. If a shareholder sells their shares to a third-party without first offering it to other shareholders, that constitutes a breach of the Agreement. The other shareholders can initiate a lawsuit against the offending person.

In extreme cases, breaching shareholder agreements may cause the Court to compel a shareholder to transfer their shares to other parties. Note that such forced removals of shareholders are rare, and would require a significant dereliction of shareholder duties.

It’s best to speak with a legal professional to see whether legal action, under your circumstances, would succeed in forcibly removing a shareholder. If there hasn’t been a breach of the Shareholder Agreement, then methods 2 or 3, outlined below, would be more appropriate.

Method 2: Remove shareholder via terms found in Shareholder Agreement

A well-drafted Shareholder Agreement should have set out terms for removing a shareholders. Generally, these terms will revolve around some kind of buy-out clause. These buy-out clauses will specify the condition which can trigger a compulsory share sale, and also the price per share for such a sale.

Here are some of the most common shareholder removal clauses:

Russian Roulette Clause:

This is a clause with a fun name, but deadly serious effectiveness. Russian Roulette Clauses are most commonly used to remove shareholders during deadlocks. Deadlocks occur when two shareholders (or groups of shareholders) own a 50:50 split of the company and disagree on an issue. Here’s how a Russian Roulette Clause works:

  1. Party A can offer to buy out Party B’s shares, at price “X”.
  2. If Party B rejects the share acquisition offer, Party B must buy Party A’s shares, at price “X”.
  3. This guarantees either Party A or B full control of the company, if the clause is activated.

Russian Roulette clauses are sometimes alternately called “Savoy Clauses”. This clause takes its name after the deadly game of chance because if the person making the acquisition offer sets the price too high, then they would have to buy the other party out at a very expensive price. If they set the price too low, then the other party could simply swallow their shares up at a discount. This game of psychology therefore encourages a balancing act when making the acquisition offer, and naturally helps both parties arrive at a price that is mutually beneficial.

Russian Roulette clauses are a good clause to consider including in your Shareholder Agreements, if you haven’t done so already. They allow for the removal of a shareholder in a quick and (arguably) cost-effective manner.

Drag-Along Clause:

Allows a majority shareholder to force a minority shareholder to sell their shares when the company is being sold. The majority shareholder who “drags along” the minority must offer the minority the same price and purchase terms as other sellers.

Drag-Along clauses are important to have. If you receive a good acquisition offer for your business, you don’t want to be held hostage by a 1% shareholder. With such a clause, you can “remove” the shareholder (and their objections) by forcing them to go along with the sale.

Sealed Auction Clause:

Allows all shareholders to submit bids to buy out other shareholders. These bids are submitted to an independent third-party mediating the auction process. The highest bid wins, and all shareholders will have to sell their shares to the winner, at the bid price.

This is also known as a “Texas Shoot-Out Clause”.

Special situations that allow for compulsory share transfers:

A Shareholder Agreement also usually provides for other events where share sales are mandatory, even without the shareholder’s agreement. These situations are highly circumspect, though.

Examples are:

  • Corporate shareholder becomes bankrupt: If a shareholder is a corporate entity (as opposed to an individual), and the corporate shareholder goes bankrupt, their shares can be forcibly transferred to another shareholder.
  • Shareholder death: If a passes away, their shares can be transferred to someone else. Often, these shares pass to the person(s) nominated in the deceased’s will.

You can see that forced transfers of shares, without compensation, is very difficult. Only in very limited circumstances can shareholders be compelled to give up their shares. Although uncooperative shareholders are a real pain, on the whole, this difficulty is a good thing. It protects your own shares in whatever companies you own, too. Other people will have a tough time litigating or intimidating you into giving up your shares, without them paying you a fair price for it.

This also brings home the importance of why it is critical to include buy-out clauses in Shareholder Agreements, so that you can quickly (and fairly) remove shareholders if you need to.

Method 3: Remove shareholder by buying them out directly

If you can’t use methods 1 or 2, you’ll just have to bite the bullet and buy the unwanted shareholder out. In such scenarios, it’s the only way to remove shareholders.

Negotiate with the shareholder and see what a reasonable purchase price would be. If tensions are high between yourself and the shareholder, you may wish to engage a third-party mediator to facilitate discussions.

How to transfer shares:

If you have a buy-out clause or if you managed to get the shareholder to sell their shares, you’ll have to go through the share transfer process. This will legally transfer shares away from the unwanted shareholder.

You can contact your corporate secretary to assist you. Most good secretaries will be able to easily get this done. Read our guide on the 5 best online corporate secretaries in Singapore. You can also contact a lawyer, although that would cost more than a corporate secretary. If you want to do it yourself, here’s the 8 steps you need to be aware of:

Step 1: Prepare the Share Transfer Agreement

You can find Share Transfer templates online, or contact a corporate secretary or lawyer to prepare one for you.

Step 2: Determine if there are any restrictions to share transfers, for example, pre-emptive share purchase rights

Have a look at your Shareholder Agreement (if you have one) to see if there’s any applicable restrictions. If not, you’re good to go.

Step 3: Sign an instrument of transfer

An instrument of transfer is a document specifying that one party is willingly moving their shares to another party.

Step 4: Hold a shareholder’s meeting. Pass a general solution to approve the transfer.

You’ll need to do the following:

  1. Send a shareholder’s meeting notice to all shareholders
  2. Arrange the meeting at least 14 days in advance. If at least 95% of shareholders agree, you can hold it earlier than this.
  3. Hold a vote. You must receive at least 50% of the vote for the resolution to be passed.

Step 5: Pay stamp duty to IRAS

The stamp duty is 0.2% of the purchase price of the shares.

Step 6: Cancel the original share certificate

Cancel the share certificate of the shareholder who’s giving up their shares.

Step 7: Update ACRA on share transfer

Log in to Bizfile+ (use your SingPass). Go to File eServices > Local Company > Update Share Information > Transfer of Shares/Update Memebrs.

Step 8: Issue a new share certificate to the shareholders who’ve purchased the shares

The entire process can be completed within a day or two if all parties involved sign the necessary documents quickly.

FAQs on removing shareholders in Singapore:

Can a director remove a shareholder?

A director doesn’t have the power to remove shareholders, unless provided for in the Shareholder Agreement. Of course, it would be rare for a shareholder to willingly sign a Shareholder Agreement that allows directors to simply remove their shares without consent. In the absence of a provision in the Shareholder Agreement allowing directors to remove shareholders, only the 3 methods described in the above will work.

Can you remove a shareholder from a private limited company?

Yes. The procedures outlined above don’t change based on the company’s type of incorporation (e.g. Pte Ltd v.s. LLP). What’s more important is the individual company’s Shareholder Agreement.

Can majority shareholders remove minority shareholders?

Yes. The percentage of ownership doesn’t really matter. It depends more on the clauses in the Shareholder Agreement; specifically, the buy-out clauses. There are many cases in business history of minority shareholders buying the majority shareholders to get rid of them from company management.

Of course, majority shareholders need to be careful of shareholder oppression when doing this. Which bring us to our next question…

Can minority shareholders sue for oppression if you try to remove them?

Yes, potentially. It depends on the individual case. The threat of minority oppression lawsuits is something to bear in mind when going about the process of trying to remove shareholders. Majority shareholders should be careful of behaviour that may constitute oppression.

Some examples of oppressive behaviour include:

  • Unfairly preventing dividend payments being made to minority shareholders, or to shareholders you want to get rid of
  • Diluting minority shares, or the shares of shareholders you want to get rid of, by issuing more shares to other shareholders
  • Deliberately excluding minority shareholders, or shareholders you want to remove, from oversight and management of the company

Under Section 216 of the Companies Act, oppressed shareholders can launch legal action against such practices.

What if the shareholder I’m trying to remove is also a company director?

There is no impact on the person’s holding of the directorship. There is no legal ban against removing a shareholder who’s also a company director. A person can have 0% shareholdings and be a director. A person can go from 90% shareholdings to 0% shareholdings, and remain a director. The only exception to this is if your company’s Constitution specifically requires directors to also hold shares. Such requirements aren’t super common, but check your Constitution to be sure.

Of course, if things get ugly while trying to remove the shareholder, then you probably don’t want that individual as a director. If you want to also take away the individual’s directorship, read our guide on removing a company director in Singapore.

Considerations before taking on shareholders

Even if you do manage to remove a shareholder without their consent, you generally will have to buy out their shares in order to remove them. Owning shares is just like owning a house, or other assets. In most circumstances, it would be quite unjust to terminate ownership, without proper compensation.

This is why it’s important to consider who you allow to own a portion of your business. Really think about the potential shareholders and investors that you allow in to your business. Can you see yourself working alongside them for the rest of the time you run your business? If the answer is no, it may be best to turn them down as a shareholder. If you really need to remove a shareholder, read on for the two ways to remove them.

Key take-aways from removing shareholders

  • Draft a Shareholder Agreement and have all shareholders sign it, if you don’t already have one. This will be critical for protecting your interests.
  • Include buy-out clauses in your Shareholder Agreement, if you don’t already have them. These could save your company if your relationship with other shareholders turn bad!
  • Don’t just let anyone into your company that easily. Evaluate each shareholder’s qualifications and character before you let them own a slice of your business.

Protecting your company directors and officers from lawsuits:

Running a business is rewarding, but also comes with significant legal exposure. No one in the company is more legally exposed than its directors and officers (e.g. C-Suite office holders). Directors and officers can be sued personally. The oft-assumed limitation of liability via “Pte Ltd” entities is not universal, and may not apply when directors and officers are personally targeted in lawsuits. That’s why Directors and Officers Liability Insurance is critical. It covers a broad range of lawsuits, like:

  • Oppression and other shareholder lawsuits
  • Negligence lawsuits
  • Employee harassment lawsuits
  • Wrongful termination lawsuits
  • Defamation lawsuits
  • …and more

Directors and Officers Liability Insurance pays for legal expenses and court damages/settlements. Having this policy could potentially save you millions.

Get Directors and Officers (D&O) Liability Insurance, from $42/mth

Categories Law

How To Change Company Address in Singapore: 5 Simple Steps

change company address

Changing your registered business address in Singapore is a simple procedure. We’ve written this guide to walk you through the 5 steps to change your address. We’ll also go over some best practices when changing your address, like notifying your customers and business partners.

Here’s a summary of the 5 steps:

  1. Pick a location
  2. Notify ACRA
  3. Pass a general Board resolution
  4. Update additional entities
    • Bank
    • MOM
    • CPF
    • Other regulatory/government agencies
    • Investors
    • Suppliers
    • Customers
  1. Execute the physical move, if you have a commercial space

Step 1: Picking a location

If your business relies on foot traffic, then the address you choose will be absolutely critical. For instance, if you’re running a restaurant, or retail store, you’ll want an address that’s got a good amount of foot traffic. The location’s rent also needs to be cost-effective, and within your budget. You’ll want to physically scout several locations. For such businesses, picking a location will be a much more involved process.

If your business doesn’t rely on foot traffic, and you just need an address for administrative procedure (e.g. receiving mail, having an official-sounding address that isn’t your home), then it’s a simpler process. You can consider using virtual offices, which provide an official-looking registered address for you. This protects your home address from being exposed. Check out our guide on Singapore’s 5 cheapest virtual offices. Some virtual offices are run by corporate secretarial firms, which also offer other services like mail scanning, and helping with various company administrative tasks. You can read about the best online corporate secretaries here.

Step 2: File a Board Resolution for the change of address

So you’ve picked your new address, and you’re going to get rid of your old one. To officially change your address, your company’s Board of Directors will need to grant approval. You can do this by passing a general resolution.

Here’s how to pass a general resolution to change your company address:

  1. Prepare a written resolution to change the company address
  2. Set up a date for the resolution, and inform all company directors of this resolution. The resolution must be scheduled at least 14 days in advance, but if the directors (who hold at least 95% voting rights) agree you can schedule it earlier.
  3. Hold a vote amongst the directors. You must receive at least 50% of the directors’ votes to pass the resolution.

Once the resolution is passed, you have official approval to change your registered address.

Step 3: Update ACRA on your new address

You’ll need to update ACRA within 14 days of the resolution passing. Updating your address is free. If you update your address late, though, you’ll have to pay a $350 fine. So do it early!

Here’s the steps to do so:

  1. Go to ACRA, and log in to BizFile+ (click here for the link). Use your SingPass.
  2. Go to Change in Company Information > Change in Registered Office Address and Office Hours
  3. Enter your new address. Provide the date of address change. Upload required supporting documents.
  4. Submit the update. You’re done!

Updating your address online is a quick process – it only takes around 10-15 minutes. ACRA will usually require around 3 working days to process your address change.

How do I change my address with IRAS?

There’s no need to update IRAS specifically. When you file an address change request with ACRA, IRAS will be automatically updated.

If you want IRAS to send you documents to an address other than the one registered with ACRA, you’ll have to file a request. Use IRAS’ myTax portal to do so.

Step 4: Update other entities about your new address

ACRA is not the only entity that you should update on your new address. You’ll want to update your bank, other government agencies, and certainly your customers and business partners about your new location. Make sure to do this after ACRA has updated your latest address, as some of these entities will require your latest ACRA profile.

Here’s a list of who else to update:

Your bank

You’ll definitely want to update your bank quickly on your new address. Your bank may send you physical statements, and you certainly don’t want this confidential information ending up in the wrong hands!

MOM (Ministry of Manpower)

Use MOM’s online service, called EP Online, to update your company address.

This is especially important if you hire foreigners. MOM will require your latest address to issue documents like Work Passes.

CPF (Central Provident Fund)

Use CPF’s online application to change your registered address. You’ll need your SingPass to log in.

Other regulatory/government agencies

Some businesses are governed by other regulatory agencies. For instance, F&B establishments with food licenses should update the SFA (Singapore Food Agency). Financial firms regulated by MAS (Monetary Authority of Singapore) should update the authority. Law firms should update the LSRA (Legal Services Regulatory Authority). Engineering firms should update the PEB (Professional Engineers Board).

Your suppliers

If you have suppliers delivering physical goods, definitely let them know your new address in advance. This way, someone else won’t be profiting from a free delivery.

Your investors and business partners

It’s best to seek your investors consent before changing your address. But late is better than never, and if you forget, make sure to update them once ACRA has processed your address change.

If you rent a physical space, let your business partners know about it too. For instance, if you’re moving your restaurant from one location to another, drop a message to your business associates so they can come and support you.

Your customers/followers

Depending on how important physical foot traffic is to your business, this could range from redundant to mission-critical. It also depends on whether you’re changing your actual location of business, or just your postal address.

If you’re running, say, a professional consultancy from home, then it really doesn’t matter where your business is located. However, if you’re running a restaurant or retail shop, then a change in physical address could alter the entire course of your business.

For businesses that depend on customers actually stepping into your premises, make sure to announce a change in address as clearly and as broadly as possible. Shout it from the top of the hills. If you do it right, changing address can even make for a nice marketing boost!

Here’s some helpful tips for changing addresses, for businesses that rely on in-person business:

  1. Make sure all online listings of your address are updated. This means all social media pages, your website, your Google listing, and anything else that is in the public sphere.
  2. Announce the change on social media
  3. Promote the post if you have to, so it reaches maximum followers
  4. Don’t just announce the change once. Do it a couple of times because some people might not see the first post. For example, if you’re moving a restaurant from Orchard to Bugis, you can run a “change of location campaign” for 2-3 weeks
  5. Google your company, and check for online mentions (e.g. blog posts) about your business. If those mentions include your old address, contact the author of the post to update them on your new address. For instance, if you run a restaurant and you’ve moved, make requests to people who’ve publicly reviewed your food before to update their posts on your location.

Step 5: Arranging the move, if you rent a physical space

Firstly, if you rent a commercial space, you’ll need to plan the logistics of the move. If yours is an office-based business with not a lot of equipment to move around, you could do it yourself. If you’re shifting large quantities of items though, you’ll need professional assistance. Search for a reputable moving company to help you with this. Ask around for recommendations, and check the company’s online reviews.

Secondly, if you need to break your current lease agreement, review the lease document carefully before you do anything. Many leases will either block you from getting out of the lease unless you can find a replacement, or levy a penalty for early cancellation. You may wish to engage a lawyer to review your agreement. Try negotiating with your landlord to see whether they’re willing to let you out of the lease, or try finding someone else who’s willing to take over the balance of the lease.

Beyond the lease agreement, you’ll also need to review any services that you’re using for the current commercial space. Examples include:

  • Land line contracts
  • Internet contracts
  • Utilities contracts
  • Equipment servicing contracts
  • Miscellaneous business service contracts (e.g. pest control)

Protecting your commercial space

a. Commercial Property Insurance

Renting a commercial premise isn’t cheap. You’ve invested a good sum of money into rent, and potentially equipment and other physical business items. Don’t let your investment get ruined by property damage. Fire, explosions, water damage, and all sorts of other nasties could cause you significant losses. Commercial Property Insurance protects you from a wide range of these risks, safeguarding the capital investments you’ve made.

Commercial Property Insurance covers:

  • Physical structure of building
  • Renovations
  • Fixtures and fittings
  • Inventory/stocks
  • Equipment and machinery
  • Electronic equipment
  • …and much more

Get Commercial Property Insurance from $9/month


b. Business Insurance Package Deals

If you want more coverage than just for property, a Business Insurance Package is perfect for you. A Business Insurance Package is an all-in-one cover that includes:

  • Commercial Property Insurance
  • Public Liability Insurance
  • Work Injury Compensation Insurance
  • Business Interruption Insurance

Get Business Package Insurance from $19/month

10 Key Intern and Trainees Employment Rights Singapore

intern trainee employment right singapore

Bringing onboard interns and trainees is an excellent exchange between the hirer and hired. Interns and trainees get valuable access to first-hand experience in their chosen industry. They can build networks, which can be invaluable in landing good full-time roles. Employers also are able to get closer access to talent, since internships provide employers with an ability to really suss out their competencies.

It’s important to know that just like regular full-time employees, interns and trainees have employment rights too. Business owners should familiarise themselves with these rights, so that they don’t fall astray of labour regulations in Singapore.

Contents:

  1. Employment Rights of Interns in Singapore
    1. Compensation for work-related injuries/sickness
    2. Basic pay
    3. Overtime pay
    4. Intern pay deadlines
    5. CPF
    6. Annual leave
    7. Sick leave
    8. Rest days
    9. Work hours and breaks
    10. Deductions
  2. Employment Rights of Trainees in Singapore

Employment rights for interns in Singapore

If you employ an intern under a contract of service, the intern is an official employee of your company, and the intern will be covered by the Employment Act and the rights that it provides. If you have an employment contract with your interns, chances are that they are working for you under a contact of service.

Criteria Covered by Employment Act Not Covered by Employment Act
Employment contract Intern has employment contract Intern does not have employment contract (i.e. hired as freelancer or independent contractor)
School vs non-school internship Intern is not performing internship as part of graduation/school requirements. Intern is performing internship as part of graduation or school requirements. For instance, polytechnic work attachments.

 

Contracts of service are different from contracts for service. Contracts for service apply to independent contractors or freelancers. Freelancers are not covered by the Employment Act. Students doing internships as part of graduation/curriculum requirements are also not covered under the Employment Act. Do note that this only refers to internships required by the school curriculum. If the student performs an internship that is not required by the school, e.g. summer internship to gain experience, earn pocket money, etc., then they will be covered by the Employment Act.

It is more common for internships to be structured as contracts of service, since interns are not often taken in as freelancers. Therefore, this guide will be written for interns employed under a contract of service.

Here’s a table summarising the list of intern employment rights. We’ll go through each of these rights in this guide.

Summary of intern employee rights in Singapore

Employment right Explanation
Compensation for work-related injury/sickness, including Covid-19 Employers must compensate interns for work-related injuries/sicknesses, including Covid-19.

 

Employers must pay for:

·       Medical expenses, up to $45,000 per intern

·       Lost salary while on MC

·       Temporary/permanent disability compensation, up to $289,000 per intern

·       Death compensation, up to $225,000 per intern

 

If interns sue under Common Law, employers have potentially unlimited civil liability for work-related injuries/sicknesses.

Basic pay No legal requirement to pay intern a salary/allowance. However, from a business perspective, best to pay interns to attract talent.

 

If hiring interns under a government scheme (e.g. SGUnited), must pay interns a minimum monthly allowance.

 

Overtime Intern cannot work more than 72 hours of overtime a month.

 

If intern works more than 9 hours a day, or more than 44 hours a week, employers must pay overtime.

 

Overtime pay is 1.5x basic pay.

Annual leave Interns are entitled to 7 days of annual leave, per 12 months of service. Employers will pro-rate this leave according to the number of months the intern will work for the company.

 

Intern must work for company for at least 3 months to qualify for pro-rated annual leave.

Sick leave Interns are entitled to paid sick leave.

 

Outpatient (non-hospitalised) sick leave: Varies from 5 days to 14 days, depending on length of internship.

 

Inpatient (hospitalised) sick leave: Varies from 5 days to 14 days, or even up to 60 days, depending on circumstances.

Rest days Minimum of one rest day per week,

 

OR

 

Additional pay for rest day work. Must have employee’s consent to work on rest day.

Work hours and breaks Must have 45-minute break for every 8 hours of continuous work.

 

Intern cannot work more than 12 hours a day, unless there are exceptional circumstances

Pay deductions Employers can make deductions from intern pay for legitimate reasons, like:

·       Damaging company assets/equipment

·       Absences from work

·       Providing interns with accommodation, amenities, or other services

 

#1. Interns must be compensated for work-related injury/sickness, including Covid-19

Under the Work Injury Compensation Act (WICA), employers are liable to pay for their interns’ work-related injuries/sicknesses, including Covid-19.

Employers must pay for the following costs:

  • Medical expenses, up to $45,000 per intern
  • Lost salary while on MC (up to 1 year for hospitalisation leave, and up to 1 year for outpatient leave)
  • Temporary/permanent disability compensation, up to $289,000 per intern
  • Death compensation, up to $225,000 per intern

WICA regulations set out a comprehensive set of expenses that employers are liable for, if their interns get injured or sick due to work. The $45,000 cap for medical expenses is high. The compensation for lost wages is also high – interns who get injured or diseased from work can claim up to 1 years’ worth of salary from you. If interns sue under Common Law, employers can face unlimited civil liability for work-related injuries/sicknesses.

If you’re hiring interns, it’s important to consider covering them with Work Injury Compensation Insurance, which will cover all these costs for you.

Example: Mark is an intern with an architectural firm. Mark goes to a site visit to check on the progress of a new house being built. While at the work site, a concrete block falls and strikes Mark on the head. Mark suffers a severe head injury. He has to undergo extensive surgery to clear a blood clot in his head. The blood clot unfortunately caused Mark to lose vision in one eye. He also falls into a coma for 2 months. His medical bills are $90,000. While he was an intern, his monthly pay was $1,000.

Medical expenses: Mark’s employer will have to pay the maximum of $45,000 for his medical expenses.

Lost salary: The employer will have to pay $2,000 ($1,000 times 2 months) for the 2 months that Mark was hospitalised due to the work-related incident.

Permanent disability: The loss of one eye is a permanent disability. Mark’s employer will have to pay $144,500 as permanent disability compensation.

Total cost to employer: $191,500

#2. Basic pay

Do employers have to pay interns?

No. The law does not require employers to pay their interns. It is perfectly legal to take in unpaid interns. If you choose to pay interns, there is no minimum wage that you must pay them.

Of course, just because something is legal doesn’t mean it’s always the best thing to do for business. Internships are a great way to recruit new talent into your company. Unless your company has a super strong and visible brand (e.g. Goldman Sachs, Grab, etc.), offering an unpaid internship is probably going to turn most potential applicants off. You’re probably not going to get top-tier talent without paying a salary. You should compensate your interns with at least enough money for necessities (e.g. travel, food, etc.). Otherwise, they might not have a very favourable view of you as an employer. This might reduce your pipeline of talent once the interns graduate and are available for full-time employment. Also, if your employment contract with the intern has stipulated a salary, you can’t just cut their pay off when you feel like it. You have to honour the terms of your employment contract.

The only exception to minimum pay on interns this concerns government grants. There are national grants available to reduce the costs of intern compensation. For instance, under the SGUnited Traineeship Scheme, employers must pay a minimum of:

  • $1,800/month for university graduates
  • $1,100/month for ITE graduates

Under the Global Ready Talent Programme, employers can receive subsidies of up to 70% of their interns’ pay. However, employers must offer interns a minimum pay (before subsidies) of:

  • $800/month to ITE and polytechnic students,
  • $1,000/month to university students

#3. Overtime pay

Interns who earn $2,600/month or less are protected by Part IV of the Employment Act, and therefore must be paid overtime if they work more than their regular hours.

Employers must pay overtime for work in excess of 44 hours in a week. Overtime refers to each hour of work done that exceeds the hours stated in their employment contract. For every hour of overtime, MOM requires employers to pay 1.5x the intern’s basic salary.

Businesses cannot make interns or employees work more than 72 hours of overtime per month.

#4. Intern pay deadlines

How often do employers have to pay their interns?

Employer must pay their interns at least once per month. They are free to pay them more often than that (e.g. once a week). However, employers are not free to delay payments over a longer duration (e.g. once a quarter).

Deadlines for salary:

Employers must pay their interns within 7 days of the last day of the payable month.

Example: Sally starts work on 1st January. Her allowance period is from the first to last day of each month. Sally’s employer must pay her for the work she did in January, by 7th February.

Deadlines for overtime pay:

Overtime compensation must be paid within 14 days after the last day of the payable month.

Example: Jim starts work on 1st January. His allowance period is from the first to last day of each month. He does overtime work. Jim’s employer must pay his basic allowance for the work he did in January, by 7th February. The employer must also pay his overtime compensation by 14th February.

Pro-rated pay:

You can pro-rate your intern’s pay if they miss some days of work. This is the same process as with regular full-time employees. Common reasons for pro-rating pay include:

  • Intern taking unpaid leave
  • Intern ends employment before the end of the month
  • Intern starts work after the first day of the month;

Use this formula to calculate pro-rated pay:

(Number of days worked/Number of days the intern is supposed to work) * Monthly gross pay

Note: Gross pay is basic pay + allowances (e.g. transport/food allowance) + overtime pay. It doesn’t include CPF.

Example: Sammy is an intern at your company. His monthly gross pay is $600. Sammy’s contract requires him to works 20 days a month, but he only works for 10 days. Sammy’s pro-rated pay is therefore $300.

Paying interns when they leave the company:

There are deadlines for paying your interns their salary when they leave your company. There are two deadlines, depending on whether your intern have given you proper notice in accordance with their employment contract, or not.

Intern provided you with proper notice, as stated in their employment contract: Pay the salary owed to them on the day itself. You cannot delay this payment till the next day.

Intern did not provide you with proper notice, as stated in their employment contract: Pay the salary by the 7th day after their employment ends.

Required notice periods for interns:

Your employment contract should state the notice period. If you didn’t specify a notice period, then apply the minimum notice periods below:

Minimum required notice periods for interns

Employment duration Minimum notice period
Under 26 weeks (i.e. 6 months) 1 day
Over 26 weeks (i.e. 6 months) but less than 2 years 1 week

These minimum notice periods are provided for under Part II, Paragraph 10 of the Employment Act.

Notice periods apply to both employers and interns. A 1-day notice period means your intern can up and leave by giving you 1-day’s notice. It also means that you can terminate your intern’s employment by informing them 1 day in advance.

#5. CPF contributions

The majority of interns will qualify for CPF contributions. The only exceptions are:

  • JC students interning during school holidays
  • Polytechnic, ITE and university students performing internships required to graduate (whether during the school term or school holidays)
  • Foreign university students who take internships in Singapore

Apart from the individuals in the categories above, you will have to make CPF contributions for all interns who receive a salary or allowance. The employer CPF contribution rate for employees under 55 years old is 17%. This means if you pay your interns $1,000/month in salary, you have to contribute an additional $170/month for their CPF. That’s a total of $1,170/month.

#6. Paid leave

Are interns entitled to take leave?

Yes. If your interns have worked for your company for at least 3 months, they are entitled to take i) pro-rated paid annual leave, and ii) paid sick leave. Take note that such paid leave is a legal entitlement. Employers must grant this leave to their interns. It’s not a benefit that employers can retract as and when you wish.

Pro-rated paid annual leave

Interns are entitled to take paid annual leave, just like your regular full-time employees. Since many internships are less than a year (most are 3-6 months long), employers will likely be pro-rating the annual leave entitlements of interns. The amount of leave is pro-rated to the number of months that the interns will work.

MOM has stipulated that all employees in their 1st year of service are entitled to a minimum of 7 days of paid annual leave. You can give more than this, but you can’t give less. The vast majority of internships are under a year, so in most cases you’ll be using this 7-day figure to do your pro-rating of leave.

Helpful tips for calculating pro-rated annual leave for interns:

  1. Round to the closest whole number when pro-rating annual leave.
  2. When calculating the number of days of work, don’t include days where interns work less than half a day. Only count days where they work more than half a day.

Example: Tim is an intern at your company. Tim will intern for 4 months. Tim’s pro-rated annual leave is 4 months (Tim’s internship duration) divided by 12 months (length of a year), times 7 days (minimum leave entitlement). That gives us 2.33 days. Round this to the closest whole number, which is 2.

Therefore, you must provide Tim with at least 2 days of annual leave.

Going AWOL, and its impact on leave

If an intern goes absent without official leave (AWOL) for more than 20% of their working days, they will not be entitled to claim any annual leave at all.

#7. Sick leave

Similar to full-time employees, interns are entitled to take sick leave. You must provide for a minimum number of sick leave days, depending on how long the intern will work for your company. The table below summarises this:

Sick leave entitlements for interns in Singapore
Employment duration Minimum amount of outpatient sick leave Minimum amount of inpatient (hospitalisation) sick leave
At least 3 months, and less than 4 months 5 days 15 days, OR

5 days + number of days of hospitalisation,

whichever is lesser

At least 4 months, and under 5 months 8 days 30 days, OR

8 days + number of days of hospitalisation,

whichever is lesser

At least 5 months, and under 6 months 11 days 45 days, OR

11 days + number of days of hospitalisation,

whichever is lesser

At least 6 months or more 14 days 60 days, OR

14 days + number of days of hospitalisation,

whichever is lesser

 

You are free to provide your interns with more sick leave than the amounts stated above. However, you cannot provide less than these minimums amounts.

Employment contracts with interns

You should provide employment contracts to your interns. In your employment contracts, you must list out the Key Employment Terms (KETs). This is a similar requirement to taking on full-time employees.

Here are the KETs you should state in the employment contracts with interns:

  • Intern full name
  • Company full name
  • Intern job title
  • State intern’s main work duties/responsibilities
  • Employment start date
  • Employment duration
  • Work schedule: daily working hours, number of working hours per week, and non-working or rest days
  • Salary amount
  • Salary payment period (e.g. 1x a month)
  • Allowances
  • Bonuses, commissions, and other additional incentives
  • Overtime pay rate (e.g. $5 per hour)
  • Overtime payment period (e.g. 1x a month)
  • Company benefits (if applicable): medical insurance, recreational benefits, dental benefits, etc.
  • Amount of leave: annual leave, sick leave, maternity/paternity leave
  • Probation period (if applicable)
  • Notice period
  • Place of work (optional, but recommended to include this if the employee will work from an address different from the company’s registered address, e.g. WFH arrangement)

Having a clearly-drafted set of KETs will minimise the possibility of employer-employee disputes later on.

#8. Rest days

The Employment Act requires businesses to provide office-based workers earning $2,600/month or less with rest days. Most interns will have a salary under this threshold. This means employers will have to provide such interns with at least one rest day, per week.

The employer can determine the rest day – for instance, a Saturday. When employers decide on the rest day, they also need to share a rest day roster with the employees in advance (at least before the start of each month), so that interns are aware of the days they don’t need to work. A rest day is 24 hours long.

If employers want to have their intern work on a rest day, that is permissible. However, employers must pay their interns extra salary for such work.

Pay for rest day work for interns
Duration of work on rest day Extra pay for intern
Half day 1 day extra pay.

 

Use the basic daily rate of pay (basic monthly salary/working days).

Full day 2 days extra pay.

 

Use the basic daily rate of pay (basic monthly salary/working days).

Full day + overtime 2 days extra pay + 1.5x hourly pay, per hour of overtime

 

Use the basic daily rate of pay (basic monthly salary/working days).

 

#9. Work hours and breaks

In keeping with the spirit of protecting lower-wage workers, Singapore law stipulates maximum consecutive work hours and mandated breaks for these employees.

Employers must provide a 45-minute meal break for every 8 hours of work.

Maximum work hours

Employers cannot make interns who $2,600/month or less work more than 12 hours a day. This is legislated under Paragraph 38 of the Employment Act.

An intern may be required to exceed these limits only if there are exceptional situations such as:

  • Intern’s work involves defending Singapore’s security
  • Intern’s work involves urgent repairs to machinery and equipment
  • Intern is part of an industry integral to Singapore’s industrial economy
  • Intern is required to assist with an accident at work
  • Intern is required to assist with a threat to the business

Employers must provide a 45-minute meal break for every 8 hours of continuous work the intern performs.

#10. Deductions

Business owners can make deductions from intern salaries in some situations. Here are some common situations where such claw-backs are permissible:

  1. Intern damages business property: Deduction amount has to be the same value of the damage caused. Maximum deduction is 25% of one month’s salary.
  2. Intern is absent without official leave (AWOL): Deduction amount has to be the same value of the wages payable for days AWOL. Maximum deduction is 25% of one month’s salary.
  3. Intern receives accommodation, amenities, or other services: Deduction amount has to be the same value of accommodation, amenities, or other services provided. Maximum deduction is 25% of one month’s salary. For deductions in point (3) only, employers must seek consent from the employee.

If an employee is liable for multiple deductions, the total deductions employers can make is 25% for all deductions combined. This protects employees from potentially having their entire salary deducted.

Consequences of breaching interns’ employment rights

MOM takes a serious view of employers who don’t comply with their obligations to workers. If you breach the various employment rights described here, you can be convicted of a criminal offence. Under Section 112 of the Employment Act, significant penalties apply.

First offence:

You can be jailed up to 6 months, and/or fined up to $5,000.

Second offence onwards:

You can be jailed up to 12 months, and/or fined up to $10,000.

Employment Rights of Trainees in Singapore

Generally, trainees do not sign employment contracts, and are therefore not considered employees. Non-employees do not benefit from the employment rights described above. Most terms of employment, like types of leave, leave days, benefits, etc. will be mutually agreed between the trainee and the employer. Non-employees do not receive CPF contributions.

Trainees who sign an employment contract (specifically, a contract of service), are likely to be considered employees and therefore have the above employment rights.

SGUnited Trainees

Workforce Singapore has issued statements that SGUnited trainees are not considered employees, and are not covered by the Employment Act. This has a range of important implications for employers.

This applies to both the i) SGUnited Traineeship, and ii) SGUnited Mid-Career Trainees.

Here are some key employment facts for employers who hire SGUnited trainees:

Employment regulations Applicability for SGUnited Trainees
CPF contributions No need to make CPF contributions
Rest days Reach a mutual agreement with employee
Work hours and break times Reach a mutual agreement with employee
Overtime pay Reach a mutual agreement with employee
Annual paid leave Reach a mutual agreement with employee
Sick leave Reach a mutual agreement with employee

 

Employers are encouraged to treat trainees fairly. From a business perspective, this makes perfect sense. If businesses treat trainees unfairly, it’s likely to retain the trainees after the traineeship period ends. In this age of accountability that’s fueled by social media, businesses who mistreat their trainees can expect to receive very bad online PR that will likely affect their sales, and general ability to do business.

Employers should offer trainees similar terms as their interns, such as by providing:

  • Adequate salaries/allowances,
  • Overtime pay
  • Reasonable work hours
  • Annual paid leave
  • Sick leave

Mandatory insurance for SGUnited Trainees

If you wish to hire an SGUnited trainee, you must purchase Work Injury Compensation Insurance for them. This is a requirement set out by SGUnited.

Buy Work Injury Compensation Insurance from $5/month

Buy your work injury compensation insurance online. Provide is the easiest & quickest way to get Work Injury Insurance immediately.

How to Fight a Lawsuit in Singapore: 9 Critical Steps

defend lawsuit singapore

Business-related lawsuits are a dime a dozen in Singapore. Your client could sue you for mistakes made in your work. Your business partner could you sue you over a disagreement. Your shareholders could sue you for mismanaging the company. Even your own employees can sue you for employment disputes, or harassment. Legal action can be taken against you from almost any source. It’s vital that, as a business owner, you know how to protect yourself. A firm understanding of legal processes, a trusted lawyer, and a good lawsuit insurance policy are vital to defending your interests.

This is Lawsuit MMA 101. Class is in session.

Summary of the 9 steps to defend a lawsuit:

  1. Receive Letter of Demand from plaintiff
  2. Receive Writ of Summons from plaintiff
  3. Respond to Writ of Summons
  4. Serve a Defence pleading
  5. Begin Discovery process
  6. Begin Pre-Trial Conference
  7. Go to Trial
  8. Judgement passed
  9. Appeal

9 Steps To Defending a Lawsuit in Singapore

Step Action Timeline
1 Receive Letter of Demand and respond When you fail to amicably resolve differences with the other party
2 Receive Writ of Summons When you fail to comply with the Letter of Demand by the deadline. Could be days/weeks/months after the Letter of Demand is sen9
3 Respond to Writ of Summons

 

Either:

·       Accept the other party’s demands, or

·       File a Memorandum of Appearance

Within 8 days of receiving Writ of Summons
4 Serve a Defence Pleading Within 14 days of filing Memorandum of Appearance
5 Begin Discovery Lawyers will file summons/affidavits with Courts for discovery
6 Attend Pre-Trial Conference (PTC) Court will schedule a date. Usually within 2 months after the filing of Writ of Summons, or Memorandum of Appearance.
7 Go to trial Trial will usually start within 28 days of the PTC.

 

Depending on case complexity, trials can go on for several months to many years.

8 Judgement Judgement is handed down when trial is concluded. Could be months or years after you first get involved in the lawsuit.
9 Appeal (if you have a case to do so) Depending on case complexity, could take months or years for cases to be re-heard and resolved.

 

#1. You’ll be served a Letter of Demand

Before a lawsuit begins, the plaintiff (the party initiating the legal complaint) will often serve you a Letter of Demand first. A Letter of Demand lists out all of the plaintiff’s demands, and the reasons for these demands. For instance, if the plaintiff feels you didn’t comply with a contract you signed with them, a Letter of Demand might call for you to fulfill the terms of your contract.

It is not compulsory for a Letter of Demand to be first sent to you. However, it does allow the plaintiff, and you (the defendant) to resolve matters relatively more amicably, without going to trial. Court trials are long, tiring, and costly. A Letter of Demand gives you a final opportunity to resolve differences, before legal proceedings begin. If you wish to avoid a costly trial, you can speak with the plaintiff at this stage to negotiate some kind of settlement. Alternatively, if the claim amount is small and/or you know you’re at fault, you can choose to agree to the Letter’s demands.

If you don’t comply with the Letter of Demand’s terms, or reach a mutual settlement, the next step is to sue you in court. Saddle up and get your wallet out, because things are about to get very expensive.

#2. You’ll have a Writ of Summons filed against you

The plaintiff will file a Writ of Summons with the Singapore Courts. A Writ of Summons is a legal document which is used to commence legal proceedings.

Service of Writ

The Writ will be personally delivered (“served”, in legal terminology) to your lawyer, or yourself. It will be served as a physical letter. It will be delivered either by the plaintiff’s lawyer, legal assistant, or a court process server. Once the Writ is delivered to you, the lawsuit is considered to have officially begun. If the plaintiff cannot locate your lawyer or you after 2 attempts, they can then apply to the Courts to serve the Writ via email, either to your lawyer or yourself.

The Writ will be served to you within 6 months of the Court’s issuance of the Writ. If you are overseas, the plaintiff will have up to 12 months to serve you the Writ.

Statement of Claim

The Writ of Summons is usually served together with a Statement of Claim. This document essentially identifies the relevant parties in the case, lays out the facts of the case, and will state what compensation/damages are being sought.

The Statement of Claim generally contains the following information:

  1. Identity of plaintiffs and defendants,
  2. Relationship between plaintiffs and defendants,
  3. Legal obligations which the defendants have breached,
  4. Facts of the defendants’ wrongdoings,
  5. Plaintiffs’ losses that were caused by defendants’ wrongdoing,
  6. Compensation sought by the plaintiffs,

Court Jurisdiction

Singapore has several different Courts. The specific Court that will hear your case will depend primarily on the dollar-value that is being claimed against you (amongst other factors).

Here’s a breakdown the various Courts that you can be sued in:

Claim amount (SGD) Court which will hear your case
Up to $20,000

Up to $30,000, only if both plaintiff and defendant agree

Small Claims Tribunal

 

$60,000 and under Magistrate’s Court
Above $60,000, and under $250,000

 

For personal injury claims only, stemming from road traffic or industrial activity accidents:

Up to $500,000

District Court
$250,000 and above High Court

 

Time limits for the plaintiff to sue you

There are different time limits (called “statutes of limitation”), depending on the type of legal claim being made. The plaintiff can initiate legal action against you within these time frames. Time limits are provided for under the Limitation Act.

Here are some examples of time limits:

Type of legal action Time limit
Contractual claims 6 years
Tort claims 6 years
Small claims court cases 2 years
Personal injury claims 3 years
Wrongful act causing death claims 3 years

 

#3. Respond to the Writ of Summons

The moment that Writ of Summons lands on your desk, you must act rapidly to defend yourself. Immediately seek out a qualified lawyer whom you trust. A good lawyer will advise you on the best course of action. They will evaluate whether the plaintiff’s lawsuit is strong or weak, what kind of defence you can mount, and whether you can potentially counter-sue the plaintiff.

File a Memorandum of Appearance

If, after consultation with your lawyer, you believe you have a strong case, you can contest the Writ of Summons. Your lawyer will file a Memorandum of Appearance within 8 days of receiving the Writ of Summons and Statement of Claim. Yes – you only have slightly more than a week to respond! (So, lawyer up ASAP).

If you don’t file your Memorandum of Appearance by this deadline, the Court may pass down a default judgement. This means you might not have the chance to present your side of the case at all, and you could stand to lose the case with highly unfavourable rulings passed against you. The Court will decide on the amount of damages you must pay to the plaintiff.

Trial vs Settlement

One of the most important decisions you’ll make is whether to take the case to trial, or negotiate a settlement. Most people may have an emotional reaction when they first become aware that they’re being sued. It’s common for defendants to think to themselves: “I’ll sue them back! See them in court!” You should not allow emotion to cloud your judgement. Approach the issue in a calm, level-headed manner.

Going to trial may not always be the best move. Court cases have less predictability than settlements, since it’s up to the judge to make the final ruling. Even if you have a strong case, it’s not an iron-clad guarantee that you’ll win. Also, going to trial is very costly and time consuming. You’ll spend a lot of money on legal fees. This could easily be hundreds of thousands, or millions. You’ll have to set aside time from work to spend long days in court. It’s also likely that the trial will suck up a lot of your mental energy.

Here are the alternatives to a court trial:

  1. If the claim is small, you can consider accepting the plaintiff’s claim against you. You can accept their terms, and have the case wrapped up. Try to see this as the lesser of two evils – the bigger evil being a big, costly lawsuit. For small claims, this option may end up costing you less than hiring a lawyer.
  2. You can also negotiate with the plaintiff to arrive at a settlement. Throughout the entire process, you have the option to come to a settlement with them. If both parties can agree to a set of terms, the case can be settled without taking the trial any further. If you can reach an agreement, your lawyers will inform the Court. The lawsuit will then be dropped, and you won’t have to continue contributing to the retirement funds of your lawyers.

An experienced legal professional will be able to advise you on whether a trial or settlement is the better approach.

What happens if I ignore the Writ of Summons?

Unfortunately, the Writ of Summons is a legal document. Just like those dirty dishes in your sink, ignoring it won’t magically make the problem go away.

If you don’t respond to the Writ of Summons, the plaintiff can apply to the Court for a default judgement against you. This means that you, as the defendant, will have no chance to present your case. The Court will decide the outcome. This is not recommended, since you could face a judgement that is highly unfavourable.

A default judgement will allow the plaintiff to take various actions against you. This may lead to disastrous situations like your monthly salary being garnished (i.e. the plaintiff has the power to take a % of your salary), your house, car and other belongings can be seized and sold. If the claim amount exceeds the value of your personal assets, plaintiffs can even file a motion to have you made a bankrupt. Don’t be a sitting duck and leave yourself exposed to a default judgement!

#4. Serve a Defence Pleading

After you serve your Memorandum of Appearance, you have 14 days to serve a Defence pleading on the plaintiff. Your lawyer will do this for you. If you go past this 14-day window, the plaintiff can move to file a default judgement against you.

The Defence pleading lays out arguments for why you are not liable for the claims being made against you.

Counterclaim (i.e. counter sue)

You can also file a Counterclaim if you have a legal claim against the plaintiff. This is commonly known as counter-suing the other party. Your lawyer will file this together with your Defence pleading.

The plaintiff will have the ability to file a reply to your defence pleading. They will also be able to file a reply to your counterclaim. They have up to 14 days after you file your defence/counterclaim to do so.

#5. Start Pre-Trial Conference (PTC)

After your Defence pleading and the plaintiff’s Reply has been entered, you’ll enter the Pre-Trial Conference phase.

The PTC session is usually arranged within 2 months from the date that the Writ of Summons was served, or the date that Memorandum of Appearance was filed.

A judge will chair the PTC. They will ask for updates on the legal proceedings, and evaluate the case. The judge will evaluate whether the dispute can be resolve via a settlement, or whether a trial is absolutely necessary. If a settlement is reached at the PTC phase, the legal proceedings will stop. If the judge determines that the case cannot be resolved via a settlement, then they may set a date for trial.

Your trial will generally start within 28 days after the PTC.

#6. Getting ready for trial

Getting ready for trial is a highly time-consuming and complex process. During the pre-trial preparations, your lawyers will be filing one or more interlocutory applications. An interlocutory application is a request for the Court to compel the other party to perform certain actions, such as provide access to documents, or to call for witnesses.

Some common interlocutory applications are:

  • Discovery: This is one of the most important aspects while preparing for trial. Discovery is the process where both parties disclose relevant documents and other evidence. This will help both sides build their case. Remember that discovery is a double-edged sword. It can expose important evidence that your lawyers can use against the other side, but it can also expose evidence that your opponent can use against you.
  • Amendments: If submitted documents need to be edited, your lawyers will file an amendment request.
  • Subpoenas: This compels witnesses to attend the trial and testify. It is legally compulsory for subpoenaed individuals to attend court.
  • Mareva Injunction: This freezes the other party’s assets. Assets can be local or foreign. It prevents the other party from selling the assets in order to avoid paying the plaintiff.
  • Anton Piller Order: This allows permitted individuals to enter the other party’s premises to search and seize evidence. This prevents the other party from destroying incriminating evidence.
  • Security for costs: This compels the plaintiff to put up a security deposit for court costs. This ensures greater financial security for parties involved in the suit, if the Plaintiff doesn’t win the case.
  • Interlocutory injunction: Prevents the other party from taking certain actions. For example, if you are being sued for defamation, the plaintiff may file an interlocutory injunction to have you stop making defamatory statements about the plaintiff until the end of the trial.

#7. Begin trial

The battle begins. The plaintiff’s lawyers will usually kick off the trial by presenting their case. The plaintiff will present their witnesses. Your lawyers will then have the opportunity to cross-examine each of the plaintiff’s witnesses. Your lawyers will then call for your witnesses to testify. The plaintiff’s lawyers will in turn cross-examine your witnesses. After both parties have provided their evidence, both sides’ lawyers will present their closing submissions.

Depending on the complexity of the case, the trial itself can be concluded the same day, or take several days or weeks for particularly large cases.

#8. Judgement and enforcement

The judge can pass a decision immediately after the trial. Alternatively, the judge can call for an adjournment, if the Court needs more time to decide on a judgement.

The judge may decide that you must pay all, or a portion, of the all legal cost incurred by both parties.

If you lose the case, you will probably be ordered to pay damages to the plaintiff, and/or to pay additional damages to the plaintiff.

If you don’t have the money or are unwilling to pay these costs, then the plaintiff can apply to the Courts to enforce the judgement against you. Here are some common ways that Courts can enforce their judgements:

Examination of a Judgement Debtor:

The Court will compel you to provide information on your assets. The Court will use this information to assess the best way to compensate the winning party. If you don’t provide this information, you can face prison time.

Writ of Seizure and Sale:

The plaintiff can apply to the Court for a Writ of Seizure and Sale. Yes, that Writ does exactly what it sounds like. This is a legal document empowering Court bailiffs to seize your assets, and then sell them off at auction to pay the plaintiff their damages.

Under the Subordinate Courts Act, Court bailiffs have the power to enter your home without your permission. They are allowed to break doors or windows to gain entry.

Garnishee Proceedings:

The plaintiff can apply to the Court for Garnishee Proceedings. This allows them to gain access to your bank account.

If you can’t pay the damages assessed against you, the plaintiff can apply for a bankrtupcy order against you. You can also declare yourself as a bankrupt.

#8. Appeal the judgement (if applicable)

Appeals are only available if there are legal grounds to do so. Speak with your lawyer to determine whether there is legal case for an appeal. You cannot file an appeal simply because you don’t agree with the Court’s decision, or you want to get a second hearing. For claims under $60,000, you can only appeal if you apply for permission to the Court, and the Court accepts your submission.

Protect yourself from lawsuits

As you can probably tell by now, lawsuits are incredibly expensive. Getting sued is such a risky proposition. You could lose your personal assets if you can’t pay for the lawsuit and damages! That’s why it’s vitally important that you carry Professional Indemnity Insurance. Professional Indemnity covers you against a really wide variety of lawsuits.

Professional Indemnity policy covers:

  • Lawsuits from negligence, errors, & omissions in your work or advice you provide
  • Lawsuits from defamation
  • Lawsuits from breach of confidentiality
  • Lawsuits from IP infringement
  • Automatic cover for subsidiaries
  • …and more

Get Professional Indemnity Insurance from $42/month – lowest prices in Singapore

 

Categories Law

Best Paternity Leave Guide in Singapore: 11 Must-Knows For Employers

paternity leave

There’s often a lot of confusion surrounding paternity leave. How much paternal leave can fathers take in Singapore? Can self-employed men qualify? Is it paid or unpaid? Do foreigners qualify? Can employers deny paternity leave? Just like in the previous article we did on maternity leave, we’ll demystify these questions, and more. We’ll discuss:

  1. What is paternity leave?
  2. Who is entitled to paternity leave in Singapore?
  3. Paternity leave vs maternity leave
  4. How much paternity leave must employers provide?
  5. How much must employers pay for paternity leave?
  6. When can employees take paternity leave?
  7. Can employers seek reimbursement for paternity leave?
  8. Can employers terminate employees on paternity leave?
  9. Can employers deny employees paternity leave?
  10. Can fathers share parental leave with their wives?
  11. How should employers support soon-to-be fathers?

#1. What is paternity leave?

Paternity leave is a guaranteed employment right in Singapore, for fathers whdio qualify. The right to paternity leave is an condified in the Employment Act. This means that as an employer, you must grant paternity leave to your male employees who are expecting children. It is illegal to deny this leave, and punishments can range from a fine to jail time. Self-employed fathers can also claim paternity leave, subject to certain conditions.

Along with maternity leave, paternity leave is an important part of social policy to encourage childbirth. It helps working parents balance their commitments at home and at work, particularly during the crucial period when a child is newly born.

#2. Who is entitled to paternity leave in Singapore?

For fathers to be entitled to paternity leave, they must satisfy the all of the 3 following criteria:

  1. His child must be a Singapore citizen, AND
  2. He must either be currently married to the child’s mother, or have previously been married to the child’s mother from conception till the child’s delivery, AND
  3. He must have worked for his employer, or been self-employed for at least 3 months before the child’s delivery

Let’s unpack these points so we get a better understanding of who does or doesn’t qualify for paternity leave.

Criteria 1 – Child’s citizenship:

An employee will fulfill this criteria if his child is either a Singapore citizen by birth, or if his child becomes a citizen within 12 months of birth. A child automatically becomes a Singapore citizen from birth if they are born in Singapore, and at least one parent is a Singapore citizen.

Since paternity leave has to be consumed within 12 months of the child’s birth, realistically, the child has to become a citizen within 11 months after birth if the father still wants to take paternity leave.

Criteria 2 – Marriage:

Paternity leave is different from maternity leave in that the father must currently be, or have been, married to the child’s mother.

Marital status of male employee Paternity leave eligibility
Currently married to child’s mother Eligible
Currently divorced, but was married to child’s mother from conception of child till birth Eligible
Never married to child’s mother Not eligible

 

Criteria 3 – Employment duration before child’s delivery:

Finally, the father must have been working for a company, or been self-employed, for at least 3 months before the child’s birth.

Can foreigners claim paternity leave in Singapore?

Yes. Foreigners are entitled to paid paternity leave in Singapore, as long as:

  • The child is a Singapore citizen, AND
  • They are married to their spouse or were married from child’s conception till birth, AND
  • Been employed or self-employed for at least 3 months before child’s birth

Basically, the 3 criteria outlined above.

Can fathers claim paternity leave for adopted children?

Yes. Fathers of adopted children are entitled to paid paternity leave, but they must meet certain requirements.

To qualify for paternity leave for adopted children, the following criteria must be fulfilled:

  • The child must be adopted within 1 year of of the date of the “Formal Intent to Adopt”.
  • The adopted child must be below 12 months old when the “Formal Intent to Adopt” is declared.
  • The child must be a Singapore citizen. If the child is a foreigner, at least one parent must be a Singapore citizen, and the child must acquire citizenship within 6 months of adoption.
  • The father claiming paternity leave must have worked for his employer for at least 3 months, or been self-employed for at least 3 months, before the date of declaring his formal intent to adopt

The meaning of “Formal Intent to Adopt” is as follows:

  • For adopted child who is a Singapore citizen: Formal intent is declared on the date the father files court application to adopt
  • For adopted child who is a foreigner: Formal intent is declared on the date of in-principle approval for child’s Dependent Pass

Adoption paternity leave can start when the employee declares their formal intent to adopt. This means that adoption leave can begin from the following dates:

  • Date of filing of the court application to adopt (for children who are Singapore citizens), or
  • Date of in-principle approval for a Dependent Pass (for children who are foreigners)

Similar to maternity leave, the entire 2-weeks of adoption paternity leave must be utilised before the child turns 1-year old. Any unused paternity leave will expire after the child turns 1.

#3. Paternity leave vs Maternity leave

Here’s a helpful comparison between the two types of leave.

Paternity Leave vs Maternity Leave: Comparison Table

  Paternity leave Maternity leave
Duration 2 weeks 12 weeks to 16 weeks, depending on various criteria
Child’s citizenship as eligibility criteria Singapore citizen only

 

 

If child is foreigner/PR: No paternity leave

If child is Singapore Citizen: Up to 16 weeks of leave

 

If child is foreigner/PR: Up to 12 weeks of leave

Marriage as eligibility criteria Yes

 

Must be, or had been, lawfully married to child’s mother from conception of child to birth

No

 

No need to be, or have been, lawfully married to child’s father

Employment duration as eligibility criteria Yes

 

3 months minimum before child’s birth

Yes

 

3 months minimum before child’s birth

Foreigner/PR paid leave eligibility Foreigners and PRs can apply for paternity leave Foreigners and PRs can apply for maternity leave
Paid vs unpaid leave Paid only If employee has worked for employer for under 3 months before childbirth, unpaid

 

Otherwise all other maternity leave is paid

Can employers claim reimbursement for paid paternity/maternity leave Yes Yes. Must meet certain criteria.
Maximum amount of paid leave $2,500 per week $10,000 for every 4 weeks (which is equal to $2,500 per week)
Does employer reimbursement increase with more children No Yes, reimbursable amount increases from 8 weeks to 16 weeks from employee’s 3rd child onwards

 

#4. How much paternity leave must employers provide?

Employers must provide 2 weeks of paid paternity leave, to employees who qualify.

Does paternity leave include weekends? What days should be counted?

Paternity leave includes weekends, rest days, and non-working days. Essentially, it’s all the days in a calendar.

#5. How much do employers have to pay for paternity leave?

Use the formula below:

Number of working days per week * weekly salary

The maximum paid paternity leave rate is $2,500 per week, including CPF contributions. Fathers can only be paid for a maximum of 6 work days per week, even if they normally work for 7 days per week.

Example: Mike works for your company. His monthly salary, including CPF, is $4,000. His regular work days are Monday to Friday (5 days per week). He takes 2 weeks of paternity leave to care for his newborn. You must pay Mike $2,000 for his 2 weeks of paternity leave.

#6. When can employees take paternity leave?

MOM has published guidelines on when paternity leave should be taken.

Duration Mutual Agreement
A 2-week continuous block. Must be taken within 16 weeks of child’s delivery. No requirement for mutual agreement between employee and company
Flexible leave, taken through the year. Must be consumed within 12 months of child’s birth.

 

OR

 

A 2-week continuous block. Taken after 16 weeks of child’s delivery, but within 12 months of child’s birth.

Must have mutual agreement between employee and company

 

If your employee wishes to take paternity leave in a single block within 16 weeks (4 months) of their child’s birth, they don’t need to reach a mutual agreement with their company. Remember, paternity leave is an entitlement, after all.

However, if the employee wants to schedule their paternity leave on an ad-hoc basis through the year, then they’ll have to get their company to agree to this. For instance, some fathers may want to spread their 2 weeks of leave bit by bit through the year. This way, they have more flexibility to quickly relieve their spouses or other caretakers looking after the child.

Self-employed fathers

Self-employed fathers can use their paid paternity leave at any time within 12 months of their children’s birth (or adoption), depending on their work commitments. For self-employed fathers, they must show proof they have lost income during their paternity leave

#7. Can employers seek reimbursement for paid paternity leave?

Yes. Under the Government Paid Paternity Leave (GPPL) scheme, the government will compensate businesses for the 2 weeks of leave pay.

Businesses must pay their employees’ the paternity leave compensation first, then file a claim for reimbursement with the government.

#8. Can employers terminate employees on paternity leave?

The ability to terminate workers on parental leave is a common question that employers have. The answer is the same for both paternity and maternity leave, and that is: it depends on the reason for termination.

Terminating an employee on paternity leave is a serious matter. It can only be done for just or sufficient cause. Examples of such causes include:

  1. Termination due to misconduct: E.g. Fraud, theft, insubordination
  2. Termination due to performance: Poor performance at work
  3. Termination due to redundancy: The position is no longer required

Sometimes, employers may have self-centered reasons for wanting to remove employees who are on paternity leave. For instance, some companies may want to save on paying the worker salary while on paternity leave. It’s important to take note that the following reasons for termination of a worker on paternity leave is not allowed:

  1. Termination to deprive employee of entitlements
  2. Termination due to discrimination: e.g. age, parental commitments, marital status, etc.
  3. Termination to take revenge on employee: e.g. firing someone after they file a legal claim against you

Companies cannot terminate employees to deprive them of entitlements or benefits. Paternity leave is one such entitlement. If a company does so, those responsible can be charged with an offence.

What happens to paternity leave benefits if the employee resigns?

Any remaining paternity leave benefits are forfeited. If the employee is joining another company, there can be no transfer of paternity leave benefits from one company to the next.

#9. Can employers deny paternity leave?

No. Paternity leave is an employment right that is enshrined in Singapore law. It is not merely a benefit that can be taken away as one pleases. Employers must grant paternity leave to employees who request it. The precise dates and scheduling of paternity leave can always be discussed between employer and employee, but it is illegal for employers to deny this right.

Penalties for denying paternity leave

Employers who deny eligible employees from accessing their paid paternity leave will face serious consequences. Offenders may be jailed up to 12 months, and/or fined up to $10,000.

#10. Can fathers share parental leave with their wives?

In Singapore, husbands can tap into their wives’ maternity leave. This is useful, since maternity leave can be up to 16 weeks long, while paternity leave is 2 weeks long. Your employee can use up to 4 weeks of their wife’s paid maternity leave. This allows for a more equal sharing of parenting responsibilities between dads and mums.

Example: John and Tricia have just had a child. Tricia qualifies for 16 weeks of maternity leave. Tricia wants to get back to work quicker, so John steps in shoulder more childcare responsibilities. John taps into 4 weeks of Tricia’s maternity leave. This gives John 6 weeks of paternity leave. Tricia now has 12 weeks of maternity leave remaining.

The qualification criteria for shared parental leave are:

  1. The child’s father must qualify for paid paternity leave, and
  2. The child’s mother must qualify for paid maternity leave, and
  3. The child must be a Singapore citizen

The compensation for shared parental leave (for dads) is the same as paid paternity leave. It’s a maximum of $2,500 per week, including CPF contributions.

#11. How should I support my employees who are about to become fathers?

It’s an exciting but stressful time for workers who are about to become dads. Employers should try to support their soon-to-be-fathers. Here are some helpful tips that you can implement to make your workers feel more supported:

  1. Create support groups: Organise the people in your company who’ve experienced fatherhood. Have them link up with their colleagues who are about to become fathers themselves. It’s a great way for first-time dads to learn from their more experienced colleagues about the joys and challenges of being a working dad. Also, such support groups can help create a more tight-knit company culture.
  2. Be understanding: Juggling fatherhood and work life isn’t easy. Babies could have medical emergencies. Stress at home could eat into work. Whatever the case, it’s a good idea to be more understanding of your employee’s circumstances. If someone’s just had a child, and maybe they made a mistake at work, it’s a good idea to empathise rather than criticize. Constructive feedback paired with empathy can help you build long-term loyalty between your company and your dad-employees.

Protect your employees with Work Injury Insurance, from $5/month

Maternity Leave Guide for Singapore Companies: 9 Must-Knows

maternity leave singapore

Business owners and HR directors often have questions regarding maternity leave policies. Do all pregnant workers qualify for it? How much maternity leave must I provide? Can maternity leave be staggered to reduce work disruptions? We’ve put together this helpful guide to walk employers through the A-Z’s of maternity leave in Singapore.

We’ll address the following points on maternity leave:

  1. What is maternity leave?
  2. Which employees are entitled to maternity leave?
  3. How much maternity leave must employers provide?
  4. How much must employers pay for maternity leave?
  5. Can employers claim reimbursement for paid maternity leave?
  6. What are the rules on adoption leave?
  7. What are the penalties for denying maternity leave?
  8. What happens if there’s a dispute over maternity leave?
  9. How should I support employees who are expecting?

What is maternity leave?

Maternity leave is leave that mothers can apply for, to prepare for the responsibilities of childbirth. Maternity leave is a legal entitlement in Singapore. This legal entitlement is enshrined in Part IX (“Maternity Protection and Benefits and Childcare Leave for Parent) of the Employment Act. This means that, under the force of law, you must grant maternity leave to your female employees who are expecting children. You cannot legally deny this leave to them.

Maternity leave plays an important policy function in encouraging workers to start families. It helps employees balance work-life responsibilities, and helps women remain employed when having children.

Which employees are entitled to maternity leave?

In the private sector, the only employees who do not qualify for paid maternity leave are:

  1. Employees who’ve worked for your company for less than 3 months, before delivery date
  2. Seafarers
  3. Domestic workers

As long as your employee doesn’t fit into any of the 3 categories, above, you must provide maternity leave for them. This means that virtually all female workers will be entitled to paid maternity leave.

If an employee has worked for less than 3 months for your company before childbirth, they will still qualify for 12 weeks of unpaid maternity leave.

Are PRs and foreigners entitled to maternity leave?

Yes. Employers must provide PRs and foreigners with maternity leave. All female workers regardless of nationality will qualify for this.

The only difference is that the duration of maternity leave will differ, depending on the citizenship of the child. We’ll discuss this point a few paragraphs down.

When can my employees begin maternity leave?

Your employees can start their maternity leave 4 weeks before their estimated delivery date. They may start later than 4 weeks before their expected delivery, but they cannot start earlier than this.

How much maternity leave must employers provide?

The duration of maternity leave depends on how long your employee has worked at your company before delivery, and whether the child is a Singapore citizen.

Length of employment before childbirth Child’s citizenship status Duration of maternity leave Paid/unpaid maternity leave Can employer claim maternity leave pay from government
Under 3 months Singapore citizen 12 weeks Unpaid No
Under 3 months PR or foreigner 12 weeks Unpaid No
At least 3 months & above Singapore citizen 16 weeks Paid Yes
At least 3 months & above PR or foreigner 12 weeks Paid No

 

Maternity leave must be consumed in the following manner.

Leave Length Length
1st block of maternity leave Starts no earlier than 4 weeks before expected delivery date 8 weeks.

 

Must be consumed in one continuous block only.

2nd block of maternity leave Ends no later than 12 months after child’s birth. 4 weeks, if total leave qualified for is 12 weeks.

 

8 weeks, if total leave qualified for is 16 weeks.

 

Can be consumed in one continuous block

 

OR

 

Taken flexibly* through the year, with mutual agreement between employee and employer.

*Notes on flexible maternity leave:

There are limits on how much maternity leave can be used flexibly.

For mothers with 12 weeks of maternity leave, the formula is: 4 weeks x the number of working days per week. Flexible leave is capped at 24 days.

Example: Megan’s job requires her to work 5 days a week. Megan is entitled to a maximum of 20 days of flexible leave.

For mothers with 16 weeks of maternity leave, the formula is: 8 weeks x the number of working days per week. Flexible leave is capped at 48 days.

Example: Janice’s job requires her to work 4 days a week. Sarah is entitled to a maximum of 32 days of flexible leave.

These limits help to balance the need for new mothers to manage their personal responsibilities, with the employer’s need to ensure smooth work schedules.

Examples of Maternity Leave scheduling

Let’s look at some examples of how employees are able to schedule their maternity leave.

Example: Sarah has worked for 2 years at your company as a management associate. Sarah’s child is a Singapore citizen. She is therefore entitled to 16 weeks of paid maternity leave. She works a regular 5-day week. This means that Sarah is entitled to consume 40 days of maternity leave flexibly (8 weeks times 5 working days), if you agree with it.

Sarah schedules a 14-week block of maternity leave about a month before her estimated due date, to prepare for childbirth. She wants an uninterrupted break from work so she can care for her child, and to recuperate. Sarah is now left with 2 weeks of maternity leave. She decides to use these 14 days flexibly through the rest of the year.

How many weeks of maternity leave will employers have to pay for?

Number of children Amount of paid maternity leave employer is responsible for
1st and 2nd child 8 weeks of paid maternity leave
3rd child onwards 16 weeks of paid maternity leave

Which days are included in maternity leave?

Maternity leave includes weekends, rest days, and public holidays. Just count every day in the calendar!

So, 12 weeks of maternity leave would mean 84 days of leave (12 times 7). 16 weeks of maternity leave would mean 112 days (16 times 7).

Can employers claim reimbursement from the government for paid maternity leave?

Yes. Under the Government Paid Maternity Leave (GPML) scheme, the government will compensate businesses for paid maternity leave.

The criteria to qualify for the GPML are:

  1. Employee must have worked for your company for at least 3 months, before delivery
  2. Employee’s child must be a Singapore Citizen

The reimbursement amount increases with the number of children your employee has.

Number of children Government’s reimbursement to employer Reimbursement amount
1st and 2nd child 8 weeks of paid maternity leave Up to $10,000 per 4 weeks. Maximum of $20,000 total, per child.
3rd child onwards 16 weeks of paid maternity leave Up to $10,000 per 4 weeks. Maximum of $40,000 total, per child.

 

The old criteria of being legally married is no longer required. Single parents can now qualify for paid maternity leave. Employers can apply to be reimbursed for maternity leave for single mothers.

Businesses must pay their employees their maternity leave first, and then file a reimbursement claim with the government.

However, if she does not give her employer at least a week of notice before going on maternity leave (and does not have a good reason for not giving such notice), she is only entitled to receive half the payment.

Adoption leave

If your employee adopts a child, they also qualify for maternity leave entitlements. If your employee meets the qualification criteria, then you have to provide them with 12 weeks of paid maternity leave.

Employees can qualify for adoption leave if:

  1. The adopted child is below 12 months of age when the employee declares their formal intent to adopt. The meaning of formal intent is as follows:
    1. For child who is a Singapore citizen: Date employee files court application to adopt
    2. For child who is a foreigner: Date of in-principle approval for child’s Dependent Pass
  2. The child must be a Singapore citizen. If the child is a foreigner, at least one parent must be a Singapore citizen, and the child must acquire citizenship within 6 months of adoption.
  3. Employee must have worked for employer for at least 3 months, before formal intent to adopt

Adoption leave can start when the employee declares their formal intent to adopt. This means that adoption leave can begin from the following dates:

  1. Date of filing of the court application to adopt (for children who are Singapore citizens), or
  2. Date of in-principle approval for a Dependent Pass (for children who are foreigners)

Like with maternity leave for childbirth, the entire period of leave must be consumed before the child turns 1-year old.

Can employees share their maternity leave with their spouses?

Yes. Your employee can share up to 4 weeks of her maternity leave with her husband.

Can I ask my employee to work during maternity leave?

If your employee is on maternity leave in the first 4 weeks after giving birth, you are not allowed to ask them to work. The first 4 weeks after childbirth is reserved for the employee to recuperate.

Employers can request for employees to work during the remaining 8-12 weeks of their maternity leave. Working during maternity leave must be mutually agreed upon. If your employee works on any day during the remaining duration of her maternity leave, you must either:

  • Offer her off-in-lieu, or
  • Pay her 1 day’s extra salary (in addition to her paid maternity leave, for that day).

Maternity leave in exceptional circumstances

Giving birth to twins (or more): This is counted as a single delivery. Delivering twins does not double the maternity leave entitlement.

Premature births: Employers must provide the mother with 16 weeks of maternity leave.

Still birth: Employers must provide the mother with the full amount of maternity leave she qualifies for (i.e. either 12 or 16 weeks).

Still births are not counted when determining maternity leave benefits that scale with the number of children.

Miscarriage or abortion: No maternity leave benefits. Employees will have to use sick leave or other types of leave.

An employer’s obligations to pregnant employees

Can a business terminate an employee who is on maternity leave?

It is an offence for a business to dismiss an employee who is on maternity leave without just or sufficient cause.

Here are some reasons that qualify as just or sufficient cause:

  1. Misconduct: Dishonest or unruly behaviour at work. E.g. Employee engaged in theft, fraud, insurbordination, etc.
  2. Performance: Employee is not performing their job to required standards.
  3. Redundancy: The position is no longer required.
  4. Moonlighting: The employee is secretly working for someone else during maternity leave.

Here are some reasons that are illegal:

  1. Deprivation of benefits/entitlements: E.g. wanting to save on maternity leave pay by firing worker
  2. Discriminatory grounds: E.g. firing worker based on level of family commitments, marital status, disability, etc.
  3. Retaliating against employees exercising employment rights. E.g. firing worker to take revenge on them for submitting a mediation claim against you.

So even though businesses are technically allowed to dismiss employees on maternity leave, the justification that companies have for the dismissal is extremely important. If a business is thinking of saving themselves the expense of maternity leave pay by removing workers on maternity leave, that would be illegal. If a business wants to dismiss employees who are new mothers because they think that new mothers won’t be able to focus on work anymore, that would be discriminatory, and therefore illegal. This guards against workplace discrimination. Employers must have specific reasons, and be able to prove these reasons, to dismiss workers on maternity leave.

Today, many employees are aware of their maternity leave rights. Such information is readily available on government channels, like MOM’s website. If a business dismisses workers who are on maternity leave, they should expect a high probability of receiving an unfair dismissal claim lodged against them. If businesses are planning to let go of employees on maternity leave, they must make sure that it is only done for the justifiable reasons outlined above. They should also have solid evidence to prove their case in a mediation tribunal or in court.

Can businesses terminate pregnant employees?

If you terminate a pregnant employee within 6 months the employee’s estimated delivery date, or on the delivery day, without just or sufficient cause, then you must pay the worker the full amount of paid maternity leave.

If you retrench a pregnant employee within 3 months of their estimated delivery date, or the date of her confinement, then you must pay the employee the full amount of paid maternity leave.

Example: Jane works for a retail business. Jane is 8 months pregnant. Jane qualifies for 12 weeks of paid maternity leave. The chain is downsizing due to financial difficulties, and Jane is retrenched. The retail business must pay Jane her 12 weeks of maternity leave salary, since she was let go within 3 months of her delivery date.

Penalties for firing pregnant employees

If a business terminates a pregnant employee without just or sufficient cause, the affected employee can file a claim with TADM. The TADM will mediate the case. If no solution is found, the case will be sent for review in the Employment Tribunal Court. Judges can impose penalties on companies who are found to deliberately fire pregnant workers.

Also, the Minister for Manpower has the power to intervene personally. The Minister for Manpower can:

  • Order the employer to reinstate the terminated employee their former position, and pay for the lost income if she had not been terminated, or
  • Pay the terminated employee damages as compensation for the unfair firing

Can employees sue employers for maternity-leave related disputes?

If your employees and you face a dispute related to maternity leave, they can file a mediation claim with the Tripartite Alliance for Dispute Management (TADM). For instance, pregnant workers who have been terminated while on maternity leave can file a claim if they feel you unfairly dismissed them.

If mediation talks break down, the case will be sent to the Employment Tribunal Court (ETC). A judge will hear the case and make decision on the dispute, and what resolutions (if any) are necessary.

Some examples of corrective actions that an ETC judge may make:

  • Employer must pay damages to the employee, or
  • Employer must reinstate employee to their previous role, and compensate the employee for lost income due to the wrongful termination

If your employee is a member of a trade union, they can also approach the union to advocate for them.

Can employees moonlight for another employer during maternity leave?

No. Employees cannot work for someone else during maternity leave. If you discover that your employee is working elsewhere when they’re on maternity leave, you are allowed to dismiss them. Any remaining maternity leave benefits will be forfeited. Employers won’t be liable for the remaining paid maternity leave.

What happens to maternity leave benefits if the employee is terminated for just or sufficient cause?

Pregnant employees, or employees on maternity leave, who are terminated justifiably will not be entitled to receive their maternity leave benefits. If they have already claimed some maternity leave pay, the remainder of their maternity leave benefits will be forfeited.

What happens to maternity leave benefits if the employee resigns?

Pregnant employees, or employees on maternity leave, who resign will not be entitled to receive any remaining maternity benefits.

Supporting your employees who are expecting

Here are some helpful tips to supporting employees who are expecting children.

  1. Guide expecting employees on available maternity benefits: Pregnancy is stressful enough. Add to that the stresses of having to work while preparing for birth, and expecting employees can feel overwhelmed. Make it easier on your workers by briefing them on their maternity leave entitlements. If your company has additional benefits that you provide to pregnant workers, educate them on that also. Employees might have received a pamphlet or “briefing day” when they first joined, but HR policies may not be something that everyone is familiar with.Walking through the various benefits available helps to take off lots of stress from your employees. It allows them to easily apply for the right benefits. They’ll certainly appreciate this gesture from you as their employer.
  2. Create support networks: If you have employees who are mothers, it’s a good idea to organise an informal support network in your company. This way, employees who’ve been through childbirth before can support other employees who may be going through it for the first time. This not only helps your employees feel supported, but can also make your team bonds stronger.

Protecting pregnant employees (and all other employees)

If your employees suffer work-related injuries/sickness, you are liable to pay for their medical expenses. You must also pay for their wages while they’re on MC. If your expecting employees suffer injuries or illness at work, you could be facing some seriously high medical bills. For instance, a pregnant employee could trip and fall at work, which might cause serious harms to herself and her baby. Make sure you get Work Injury Compensation Insurance, which pays for medical bills, and lost wages while on MC.

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Can You Make Employees Work On Public Holidays In Singapore?

employee work on public holiday

You’re planning your company’s manpower roster for the next month. You realise there’s a public holiday, but you need to get workers to work on that day. You know that you have to pay workers some kind of extra compensation to work on public holidays, but you’re not fully clear on the legal specifics. We’ve written this guide in layman’s terms to help employers better understand whether they can make employees work on public holidays, and how much they have to compensate employees for doing so.

We’ll answer the following points below, which are amongst the most common questions that employers have:

  1. Do employers have the power to get employees to work on public holidays?
  2. What are the official public holidays in Singapore?
  3. How much must you pay employees who work on public holidays?
  4. What are the various forms of compensation available for working on public holidays?
  5. How much must you pay part-timers who work on public holidays?
  6. How much overtime pay do you have to contribute for working on public holidays?
  7. Is it legal to withhold public holiday pay?
  8. How should I protect employees from injuries and illness?

Do employers have the power to get employees to work on public holidays?

Yes, you certainly can. Employers in Singapore are allowed to require employees to work on Public Holidays.

If your employee is governed by the Employment Act, then there are some conditions that you must adhere to. You can pay your worker additional wages for working on that public holiday. Or, if your worker falls in certain categories, you can grant your worker an additional day off. We’ll delve into the specifics of these later on.

Let’s first define what the public holidays are in Singapore.

What are the public holidays in Singapore?

Singapore recognises 11 public holidays each year. These are, in chronological order:

  1. New Year’s Day
  2. 1st day of Chinese New Year
  3. 2nd day of Chinese New Year
  4. Hari Raya Puasa
  5. Hari Raya Haji
  6. Good Friday
  7. Labour Day
  8. Vesak Day
  9. National Day
  10. Deepavali
  11. Christmas Day

The dates of public holidays are announced by MOM each year. Some dates of public holidays are the same every year. For instance, the Christmas holiday falls on the 25th of December each year, and National Day falls on the 9th of August each year. Other public holidays will vary their dates from year to year. For instance, Hari Raya Puasa can begin on different dates each year, and the same applies to the Chinese New Year holidays. Public holiday dates are available here.

Special note for Polling Day

In addition to these annual public holidays, other events also constitute public breaks. Polling Day (a.k.a. voting day), for both the General Elections and the Presidential Elections, is a public holiday. Voting days for by-elections, however, are not public holidays. Employers should note that they must allow adequate time-off for their employees to vote. Employers cannot unreasonably withhold employees from voting, just because they have scheduled work commitments on Polling Day. This allows the maximum turnout possible for the important process of selecting public leaders.

Compensation rates for working on public holidays

If you require your employees to work on a public holiday, then you must pay them additional wages. These additional wages must equal to the basic rate of pay + gross rate of pay. Here’s an explanation of both pay rates:

Basic pay rate: This refers to the basic pay that you pay your worker, as stipulated in the employment contract. It excludes additional payments like overtime pay, allowances, and benefits.

Gross pay rate: This refers to the basic pay, plus any allowances given under the employment contract. It does not include payment for overtime work.

Example: Eric works as a computer repairman for your company. On a public holiday, your computer servers break down, and you require Eric to repair them urgently. You call him back to work, and Eric spends a full working day attending to the repairs. Eric’s basic pay is $4,000/month. His allowances are $500/month, for travel and meals.

Pay type Monthly amount Number of work days in a month Pay rate
Basic pay

  • Includes basic salary only
  • Excludes allowances, CPF, overtime, bonuses, etc.
$4,000 20 $200/day
Gross pay

  • Includes basic salary + allowances only
  • Excludes CPF, overtime, bonuses, etc.
$4,500 20 $225/day

Eric’s basic pay rate of $200/day is already accounted for in his monthly basic salary. The additional compensation you owe Eric is his gross pay rate. You must therefore compensate Eric an additional $225, for his work on a public holiday.

Compensating employees who are not working on public holidays

For your workers who are paid a monthly salary, you don’t have to factor in additional pay if they’re not working on public holidays.

For your workers who are paid a daily salary, you must still pay them if they don’t work on a public holiday. You must pay them 1 days’ salary at their gross pay rate.

Employees who aren’t working on a public holiday must still be paid. They will draw 1 day’s salary at their gross pay rate.

Tip: You do not have to pay employees who don’t work on public holidays if the employee does not show up for work on the day and or after a public holiday, without seeking your approval (i.e. goes AWOL). This prevents employees from trying to maximise time off by disappearing around a public holiday.

Compensating employees who work on public holidays

If you work on a public holiday, the types of compensation you are entitled to depends on what day the public holiday falls on (e.g. working or non-working day), and also your role in the organisation. The following tables summarise the different ways you can compensate employees who work on public holidays:

Use this first table for the following workers:

  • Manual workers earning more than $4,500/month
  • Non-manual workers earning more than $2,600/month
Work day Compensation
Public holiday is on a working day Pay the worker 1 day’s extra salary. Use the basic rate of pay.

 

OR

 

Provide off-in-lieu

Public holiday is on a non-working day Pay the worker 1 day’s extra salary. Use the gross rate of pay.

 

OR

 

Provide off-in-lieu

Public holiday is on an employee rest day Pay the worker 1 day’s extra salary. Use the basic rate of pay.

 

The worker must also be given paid leave the next working day, right after the public holiday.

Use this second table for the following workers:

  • Manager or executive (e.g. PMET)
  • Manual workers earning $4,500/month or less
  • Non-manual workers earning $2,600/month or less
Day Compensation
Public holiday is on a working day Pay the worker 1 day’s extra salary. Use the basic rate of pay.

 

OR

 

Provide off-in-lieu

Public holiday is on a non-working day Pay the worker 1 day’s extra salary. Use the gross rate of pay.

 

OR

 

Provide off-in-lieu

Public holiday is on an employee rest day Not applicable. Managers, executives, manual workers earning

Requesting employees to work on a public holiday, that falls on a working day

Option 1: Extra pay

For workers on a monthly salary: There’s no need to pay monthly-salaried employees extra salary. Their monthly salary will already take into account compensation for any potential public holidays.

For workers on a daily salary: If the public holiday falls on a working day, then you have to pay your daily-salaried employees one extra day’s salary. This extra salary is calculated using the employee’s basic pay rate. (Basic pay rate = basic salary only. This excludes allowances, CPF, overtime pay, bonuses, etc.)

Even if the working day is a half-day, you must still pay your workers the full day’s rate.

Example: Mark is an engineer at your company. You ask him to work on a public holiday. His basic salary is $5,000/month. He works 20 days a month. This means his basic pay rate is $250/day ($5,000 divided by 20 work days).
You must pay Mark an additional $250 for his work on a public holiday.

Option 2: Off-in-lieu

Instead of paying your workers, you can provide them with a day off on another date.

Option 3: Time off

Time off is only available for the following employees:

  • Managers and executives (e.g. PMETs)
  • Manual workers earning more than $4,500/month
  • Non-manual workers earning more than $2,600/month

Here are examples of time-off:

  • If your employees work under 4 hours on a public holiday: You must give them 4 hours time-off-in-lieu
  • If your employees work over 4 hours on a public holiday: You must give them 1 day off-in-lieu

If you have manual workers earning less than $4,500/month, or non-manual workers earning less than $2,600/month, you cannot simply offer time off for work done on a public holiday. Instead, you must provide them with a rest day. A rest day is 24 hours without work. This is intended to protect lower-wage workers from overwork.

Requesting employees to work on a public holiday, which falls on a non-working day

Non-working days are days which you do not have to work. For most employees on a regular schedule, this will be Saturdays and Sundays. However, for some employees who do shift work, their days off will differ. For example, some employees may work 4 days on, 2 days off. This is common in the F&B, retail, manufacturing, or customer service sectors.
For workers on a monthly salary: There’s no need to pay monthly-salaried employees extra salary. Their monthly salary will already take into account any potential public holidays.
For workers on a daily salary: If the public holiday falls on a working day, then you have to pay your daily-salaried employees one extra day’s salary. You should use the employee’s gross pay rate. (Basic salary + allowances. This excludes bonuses, CPF, overtime, etc.)
Even if the working day is a half-day, you must still pay your workers the full day’s rate.

Option 2: Off-in-lieu

Instead of paying your workers, you can provide them with a day off on another date.

Option 3: Time off

You can provide workers with time-off-in-lieu. You can only do this for the following workers:

  • Managers and executives (e.g. PMETs)
  • Manual workers earning more than $4,500/month
  • Non-manual workers earning more than $2,600/month

Requesting employees to work on a public holiday, which falls on their rest day

Rest days are days where you don’t work, and you’re not paid because you’re not working.
Rest days only apply to manual workers earning under $4,500/month, or non-manual workers earning under $2,600/month.
You cannot make your employees work on their rest day, unless there are exceptional reasons to do so. Examples of exceptional reasons:

  • The employee is engaged in shift work, and there cannot be gaps in the shift, hence necessitating them working on their rest day
  • There is an accident or emergency situation at work, and you need the employee to help
  • The employee must perform urgent work for machinery or equipment
  • The employee must perform work that is essential to the “life of the community” (e.g. healthcare services)
  • The employee must perform work that is essential to the economy of Singapore
  • The employee must perform work to defend Singapore

Compensation for employees working on a rest day depends on whether you told your employee to work on a rest day, or whether your employee requested to work on their rest day themselves.

Employer requesting employee to work on rest day: If your employee works 50% of their regular working hours, you must pay 1 day’s extra salary. If your employee works over 50% of their regular working hours, you must pay 2 days’ extra salary.

Use their gross pay rate.

Employers must also provide one day of paid leave, consumed immediately after the employee finishes work on their rest day.

Employee themselves requesting to work on rest day: If your employee works 50% of their regular working hours, you must pay half a day’s extra salary. If your employee works over 50% of their regular working hours, you must pay 1 days’ extra salary.

Use their gross pay rate.

Employers must also provide one day of paid leave, consumed immediately after the employee finishes work on their rest day.

Public holiday pay for part-timers

Part-time employees are also entitled to public holiday pay, just like regular employees. The only difference is that part-time employees working on public holidays will have their pay pro-rated. Here’s the formula for pro-rating part-time employee pay:
(Part timer’s annual hours) / (Equivalent full timer’s annual hours) * Equivalent full timer’s daily hours

This formula looks a little complex, so let’s break it down with an example:
Sarah is a part-time employee working at a restaurant. Her basic pay is $8/hour. She works 20 hours a week. This is half of the 40 hours a week for full-timers. She joined the restaurant on 11 August. This means that there are only 2 public holidays left in the year – Deepavali, and Christmas.

  Part-timer Full-timer
No. of working hours per year 1040 hours

 

(20 hours/week x 52 weeks)

2080 hours

 

(40 hours/week x 52 weeks)

No. of days of public holidays qualified for 2

 

Only 2 remaining public holidays in the year:

–          Deepavali

–          Christmas

2

 

Only 2 remaining public holidays in the year:

–          Deepavali

–          Christmas

No. of working hours in a day for similar full-timer 8

Sarah’s boss requests for her to work on Christmas, for an 8-hour shift. Here’s the amount Sarah’s boss needs to pay her, by law:

Basic pay:

$8/hour multiplied by 8 hours worked = $64

Public holiday additional pay (pro-rated for part-timer):

(Sarah’ s annual hours) / (Equivalent full-timer’s annual hours) * Equivalent full timer’s daily hours

Using the background information above, the equation looks like this:
(1040 hours) / (2040 hours) * 8 hours = 4 hours additional pay

$8/hour multiplied by 4 hours =  $32

The total sum is therefore:

Total part timer pay for public holiday= Basic pay + Prorated public holiday pay

Total part timer pay for public holiday= $64 + $32 =$96

Final result:

Sarah’s boss must pay $96 for having her work on Christmas. If your employment contract provides travel allowances, you must also give the part-timer one day’s worth of travel allowance for working on a public holiday.

Overtime pay during public holidays

Irrespective of whether the public holiday falls on a work day, non-work day, or rest day, your employees will still qualify for overtime pay. This means that if your employees work more hours than usual, you must pay your employees overtime pay.

Example: Sam is a delivery driver working for your company. Sam’s hours, as stipulated in your employment contract with him, are 8 hours a day. It’s the year-end holiday season, and there are lots of extra orders to fulfill. You request for Sam to work on Christmas day, for 12 hours. As an employer, you are legally obligated to pay Sam for 4 hours of overtime.

Overtime limits: Take note that employees can only work 72 hours of overtime per month. You have to apply to MOM for an exemption if you need them to work over 72 hours of overtime. If you don’t have an exemption from MOM, and you’ve already hit this limit, you can’t make them put in more overtime.

Can I not pay my employees for working on public holidays?

No. It is illegal to withhold the legally mandated payments to employees if you have them work on public holidays. You can be charged with a criminal offence for doing so. Your employees can approach the Tripartite Alliance for Dispute Management (TADM) to file a legal claim against you. The TADM will mediate the case between your employee and your company. Your worker can file a claim for up to $20,000.

Employees have a relatively long time to file such disputes. The TADM will hear cases up to 1 year from the date of the dispute. If your employee has left your employment, they have up to 6 months to file a claim against you with the TADM. If mediation doesn’t succeed in producing a solution, then the case will be referred to the Courts. Employee-employer pay disputes will be heard in the Employment Claims Tribunal (ECT).

If the Courts find you guilty of unlawfully withholding payments, it is a criminal offence. You can be jailed up to 12 months, and/or fined up to $10,000.

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Reimbursements and Claims: Ultimate Guide for Singapore Companies

employee reimbursement

When you run a business, you’ll likely have to reimburse your employees for various expenses and costs. The most common type of reimbursement is for business-related expenses. For instance, your salespeople may entertain clients, and will likely need to be compensated for meals and other gifts they provide to customers. You will also have to reimburse employees for medical expenses, particularly if these expenses stem from work-related injuries/diseases. You may also need to file reimbursement claims as a business owner, such as when claiming compensation for maternity leave benefits from the government. This guide will go over the key aspects of employee reimbursements.

Here’s a summary of the key points:

  1. What is an employee reimbursement?
  2. Reimbursements vs disbursements
  3. Legally mandatory vs optional reimbursements for employees
  4. Do you need to make CPF contributions for reimbursements?
  5. Are you allowed to refuse employee reimbursements?
  6. Can you claim reimbursements for employee benefits?

What are reimbursements?

A reimbursement is money the company pays to employees, to compensate them for expenses incurred.

Example: John works as a sales manager for a company. As part of his job, John has to entertain clients over meals. He also has to travel to meet clients in Singapore and in various parts of Asia. John can file reimbursement claims with his employer for his work-related meals, and transportation expenses.

On the other hand, a disbursement is a sum of money paid by a company to someone when he or she incurred an expense as an agent – in other words, when that person contracts with a supplier in the name of the company or another person.

Reimbursements vs Disbursements

Reimbursement Disbursement
Paid to own employees for expenses incurred Paid to external parties for expenses incurred in your company’s name

Sometimes, people get confused about the difference between reimbursements and disbursements. A disbursement is a sum of money paid to external parties, for expenses ultimately incurred by your company. For instance, let’s say you contract a party planner (company B), to organise a year-end Dinner-and-Dance to reward your staff. The party planner orders a variety of hampers and gifts to present to your staff at the event. The party planner can make an advance payment to the hamper and gifts supplier first. The party planner will then lodge a disbursement claim with your business, to claim compensation for the expenses incurred in planning the event.

Legally mandatory vs optional reimbursements

Employers are legally obligated to reimburse employees for medical expenses, up to a certain amount. All other reimbursements are optional, unless otherwise stated in your employment agreement.

Legally required reimbursements Optional reimbursements
Medical expenses

  • Medical consultation fees only, for paid sick leave
  • Medical expenses up to $45,000, for work-related injuries/sickness
  • Compensation of $225,000, for death of employee in work-related incident
  • Compensation of $289,000, for permanent disability of employee in work-related incident
All other expenses, except medical expenses.

 

Examples include, but are not limited to:

Travel expenses

Meal expenses

Client entertainment expenses

Childcare expenses

Phone bill expenses

Laptop expenses

Clothing/uniform allowances

Leisure allowances (e.g. company benefits like free movie tickets, Zoo passes, etc.)

Medical expense reimbursement:

MOM requires employers to reimburse employees for paid sick leave. This is part of Singapore law.

If your employee takes paid sick leave, you must pay the following expenses:

  1. Medical consultation fee
  2. Employee salary while on paid sick leave

You must reimburse your employee for their medical consultation fee, if the following conditions are met:

  • Your employee has worked for you for at least 3 months
  • Your employee’s medical consultation results in at least 1 day of paid sick leave
  • The medical certificate is issued from a public institution, or a healthcare provider appointed by your company

Common questions about medical expense reimbursements

Q1: Do I also have to pay for my employee’s medication?

Answer: No. You only have to pay for the medical consultation fee. You don’t have to pay for the medication.

Q2: Do I have to pay for my employees’ medical consultation if they visit see a private clinic?

Answer: No. You only have to pay if they visit a public institution, or a healthcare provider appointed by you. See here for the list of approved institutions.

Q3: Do I have to pay for medical consultations for cosmetic procedures/plastic surgery?

Answer: No. Employers do not have to compensate workers for cosmetic procedures. If a member of staff wants a botox shot, or a nip-and-tuck, that’s great. They’ll just have to do it on their own dime!

Take note that the above reimbursements only apply for non-work-related injuries/sickness. If your employee gets suffers a work-related injury/sickness, the types of medical expenses that you have to compensate them for immediately becomes much broader. If the injury/sickness if work-related, you must compensate your employee for all medical costs related to the injury/sickness, up to a maximum of $45,000. This includes medication, and other medical expenses – not just medical consultation costs.

Optional reimbursements:

You are not legally obligated to compensate employees for all other kinds of expenses. Of course, just because it’s not legally obligatory, doesn’t mean it makes good business sense to not pay your employees for certain important expenses. For instance, if you don’t compensate your sales staff for the money they spend on clients, then your salespeople are not likely to go the extra mile to keep your clients happy. You can say goodbye to niceties like hampers, gifts, good meals, and other attractive incentives that your salespeople use to keep your clients close to you. Even though these reimbursements are optional in the eyes of the law, you should think about the ultimate impact on your sales and profits when considering whether or not to reimburse employees for certain expenses.

Here’s a list of common expenses that business owners will typically compensate employees for:

  1. Client entertainment expenses: keeps clients happy and sales coming in
  2. Travel expenses: allows your sales staff to meet clients at their convenience
  3. Meal expenses: nice staff benefit to help employees defray costs while eating out
  4. Clothing/uniform allowances: usually provided if staff have to wear uniforms, e.g. in F&B or service business environments.

Do businesses need to make CPF contributions for reimbursements?

It depends on whether these reimbursements are ad-hoc, or whether they are allowances that form part of your employee’s monthly salary.

Ad-hoc reimbursements: You don’t have to pay CPF contributions for ad-hoc reimbursements to employees.

Example: One of your employees submits a travel and meal reimbursement claim to you. The employee had to take a taxi to meet a client, and had to buy dinner for the client. You don’t have to make contributions to the employees’s CPF for the reimbursements to pay to this employee.

Tip: As part of industry-standard compliance practices, make sure that your employees submit official documents like receipts to substantiate these claims.

Allowances that are part of employees’ salaries: You must make CPF contributions if you provide allowances that form part of your employees’ salary.

Example: Your employee is paid $4,000/month. This is the breakdown of her monthly wage:

  1. Basic salary: $3,000
  2. Allowance for transport, entertainment, and meals: $1,000

You must make CPF contributions on both the basic salary and the allowance component. This is because the allowance is part of an employee’s salary, which means it’s subject to CPF contributions.

Can I refuse to reimburse employees?

Yes, as long as the reimbursement is not related to medical consultations, or work-related injuries/sicknesses. Let’s revisit the table that highlights mandatory vs optional reimbursements.

Legally required reimbursements Optional reimbursements
Medical expenses

  • Medical consultation fees only, for paid sick leave
  • Medical expenses up to $45,000, for work-related injuries/sickness
  • Compensation of $225,000, for death of employee in work-related incident
  • Compensation of $289,000, for permanent disability of employee in work-related incident
All other expenses, except medical expenses.

 

Examples include, but are not limited to:

Travel expenses

Meal expenses

Client entertainment expenses

Childcare expenses

Phone bill expenses

Laptop expenses

Clothing/uniform allowances

Leisure allowances (e.g. company benefits like free movie tickets, Zoo passes, etc.)

Not allowed to refuse reimbursement Allowed to refuse reimbursement

You can refuse reimbursements for the expenses in the right column. Unless you’ve specifically agreed to compensate workers for such expenses in your employment contract, you don’t have to pay your workers for such reimbursement claims.

You cannot refuse reimbursements for claims in the left column. For instance, you cannot refuse reimbursement claims for medical consultations, when workers take paid sick leave. This is a legal entitlement under Singapore law. This is designed to protect workers’ rights to access medical care, and to adequate rest when ill. It is a criminal offence to not reimburse workers for qualifying medical consultation fees. Under the Employment Act, you can be jailed up to 12 months, and/or fined up to $10,000.

If you fail to compensate employees for certain expenses that were agreed upon in your employment contract, your employees can file a legal claim against you. They may do so in the Employment Claims Tribunals (ECT) (for claims under $20,000), or file a civil lawsuit against you. Employees can sue company directors personally in such cases. It’s best to consider getting Directors and Officers (D&O) Liability Insurance, which will cover employee vs director lawsuits.

For lawsuits filed in the ECT, the courts will review several aspects of the claim:

  1. Why the claim was filed, and the facts of the case
  2. How much is being claimed against you
  3. Any efforts made by you or the employee to settle the dispute out of court

The ECT will then decide whether you have to compensate the employee for their claim. If you have an expense that you’ve agreed to compensate employees for in their employment contract, it’s best to honour that agreement. It’s never good to allow cases to go to court, unless the employee in question is truly being unreasonable and making demands that are not within their employment contract. Court proceedings are a big extra expense, suck up lots of time, and are poor for publicity and staff morale.

Can businesses get reimbursed for employee benefits?

Business owners can claim compensation for certain employee benefits that they provide. The most common examples are maternity leave, paternity leave, and childcare leave. The government will compensate you for providing such benefits to your workers. This is designed to encourage employers to provide these benefits to workers. This allows workers a better work-life balance, and also helps the policy goal of increasing the country’s overall births.

As an employer, you must continue paying your employees’ salary while they are on family leave (i.e. childcare leave, maternity leave, and paternity leave). However, you can claim reimbursements for employee benefits for family leave from the government.

Reimbursement for childcare leave

There are two schemes that provides compensation for businesses to grant their workers paid childcare leave. These schemes are differentiated according to how old the employee’s children are.

The first scheme applies to childcare leave taken for children under 7 years of age. It’s called the Government-Paid Childcare Leave (GPCL) scheme. As an employer, you can claim reimbursement from the government. The government will pay for 3 days of childcare leave, for each qualifying employee.

The second scheme applies to childcare leave taken for children between 7-12 years of age. It’s called the Extended Childcare Leave (ECL) scheme. As an employer, you can claim reimbursement from the government. The government will pay for 2 days of childcare leave, for each qualifying employee.

Reimbursable amount:

For the GPCL scheme, the maximum reimbursement that employers can claim is $500/day.

For the ECL scheme, the maximum reimbursement that employers can claim is $500/day.

Qualification criteria for childcare leave:

  1. Childcare leave taken must be for child(ren) must be in the age groups stated above (basically 12 years old or younger)
  2. Child(ren) must be Singapore citizens
  3. Employee must have worked for the employer for at least 3 months

Reimbursement for Maternity leave

Businesses can claim compensation from the government for employees who take maternity leave. You can claim 8 weeks of maternity leave salary for your employee’s first and second child. You can then claim 16 weeks of maternity salary for the third child, and beyond.

Your employee must meet the criteria under the Government-Paid Maternity Leave (GPML) scheme. Read more about maternity leave in Singapore.

Reimbursable amount:

The maximum amount employers can claim is $10,000 for every 4 weeks of maternity leave. This figure includes CPF contributions.

Qualification criteria for maternity leave:

  1. Maternity leave can be taken up to 4 weeks before the child’s birth. All maternity leave must be used within 12 months of the child’s birth.
  2. Child must be a Singapore citizen
  3. Employee must have worked for the employer for at least 3 months

Reimbursement for Paternity leave

Businesses can claim compensation from the government for employees who take paternity leave. You can claim 2 weeks of paternity leave salary. Unlike with mothers, the amount of leave claimable does not increase with additional children. It is capped at 2 weeks, per child.

Your employee must meet the criteria under the Government-Paid Paternity Leave (GPPL) scheme. Read more about paternity leave in Singapore.

Qualification criteria for maternity leave:

  1. Paternity leave can only be taken after the child’s birth. All paternity leave must be used within 12 months of the child’s birth.
  2. Child must be a Singapore citizen
  3. Employee must have worked for the employer for at least 3 months

Reimbursable amount:

The maximum amount employers can claim is $2,500 for every 4 weeks of paternity leave. This figure includes CPF contributions.

Childcare, maternal, and paternal leave reimbursement procedure

You will need to submit your reimbursement claim to the government within 3 months of your employee’s return from childcare, maternal, or paternal leave. You may submit your claim online via the Government Paid Leave (GPL) portal.

Here are quick links to the official application forms that your employees can use to apply for paid family leave.

  1. Childcare leave form
  2. Maternity leave form
  3. Paternity leave form

You will need either the official forms, or your own form (which captures similar information to the official one) as part of your reimbursement submissions. You’ll also need some additional information, which you can find here.

Reimbursement for work-related injuries/sickness

Under Singapore law, all employers must compensate their employees for work-related injuries and sicknesses. This includes work-related Covid-19 infections. This is legislated by the Work Injury Compensation Act.

Work Injury Compensation Insurance is widely purchased in order to alleviate these potentially large costs from employers.

To submit a Work Injury insurance claim, employers must first notify MOM about their employee’s work-related injury or sickness. Employers must provide an incident report, the employee’s personal details, medical documents like doctor’s reports, and other reports like police statements (if applicable).

MOM will then carry out an investigation. After investigations, MOM will issue a Notice of Assessment (NOA), which stipulates the amount of compensation the employer owes to injured/sick employee. After the NOA has been issued, employers can then file a claim with their insurance company to compensate them for these expenses.

Get Work Injury Compensation from $5/month, per worker

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