Introduction

1. Besides the statutory rights and obligations of the employees and employers which are found in Acts of Parliament such as the Employment Act, the rights and obligations of the employers and the employees (“the parties”) are to be found in the terms and conditions (“the terms”) of the employment contract. The terms of the employment contract may be expressly agreed by the parties or implied into the employment contract. 

2. In the employment context, normally, the express terms of the employment contract are contained in the letter containing the Offer of Employment or Letter of Appointment issued by the employer and accepted by the employee (“the Letter of Appointment”). The express terms of the employment contract can also be found in other documents such as:

(a)  Collective Agreements;

(b)  Forms and Notices;

(c)  Company Rules and Regulations;

(d)  Human Resource Manual or Staff/Employee Handbooks.

3. In this article, the words “employment contractual documents” refers to the Letter of Appointment and all or any of the documents referred to in paragraph 2 (a) to (d) above. Normally, disputes between the parties arising out or in connection with the contractual documents are determined by way of proceedings in the Courts. 

Arbitration

4. Proceedings in the Courts are heard in public where the members of the public, if they want to, have the right to be present in Court. However, proceedings in the Courts are not the only way of resolving all kinds of civil disputes, including disputes arising out of or in connection with employment contracts. 

5. Generally, arbitration is the resolution of any dispute between parties who have agreed to refer their dispute to an independent individual or tribunal, comprising usually of 1 or 3 persons, appointed privately by the parties themselves and whose findings or awards with regards to the dispute shall be binding upon the parties by agreement. Both parties can be represented by lawyers in arbitration proceedings.

6. As stated earlier, proceedings in the Courts are heard publicly in Court where the members of the public have access. In other words, parties wash their dirty linen in public, so to speak, where the parties’ private arguments are made known when others are present. One of the main reason why arbitration is attractive to parties in all kinds of civil disputes, including disputes between parties in the area of law of employment, is the confidential nature of arbitration proceedings. This is because proceedings in arbitration are heard privately. The members of the public have no right to be present in arbitration proceedings.

Conclusion

7.  Employers may wish to consider inserting or amending their present letters containing the Offer of Employment or the Letter of Appointment with a well-drafted arbitration clause so that any dispute arising out of or in connection with the employment contractual documents shall be determined by arbitration in Singapore. Arbitration clauses can also be inserted in any other Contract or Agreement, not only in employment contracts.

By Dravida Maran, Lawyer

All information contained herein is intended only for your general information. It is not intended and/or should not be regarded under any circumstances as legal advice.