Singaporean businesses rely on foreign manpower to fulfill their staffing needs. In addition to making sure that the company fulfills the local-foreign staff ratio and that the foreign staff is granted a Work Permit, companies now need to ensure that their staff undergoes testing, and if necessary, quarantine to avoid the incoming employee being a Covid-19 carrier. However, can the employers pass on these additional Covid-19 costs to such foreign employees?
From general legal principles, it is open for the employer to state in the contract of employment that the employee must foot these costs, as a pre-condition or consideration (providing value to the other party) of the contract. However, such general principles have been overridden by the specific guidelines laid down by the Ministry of Manpower which state that
So on the surface, it seems that employers have no choice but to bite the bullet when it comes to bringing in new Work Permit employees. However, if one looks closer at the guidelines, it contains an exception:
“However, to protect yourself against Work Permit holders who job-hop shortly after starting work, you can review the contractual terms of new Work Permit holders who have yet to come to Singapore to include certain conditions [which] should be:
If your Work Permit holders breach these conditions, they will have to reimburse you. The reimbursement can be partial or full, depending on their length of service.”
Therefore, it is possible to pass on such Covid-19 costs to foreign employees who terminate their employment shortly after entering Singapore, as long as the employee signs the employment contract with the permitted clauses. Such costs could possibly be deducted from the last salary paid, subject to the various restrictions found in the Employment Act. Of course, such deductions would also be limited by other contract law principles, such as penalty clauses.
While these rules are accessible to the public, it may be necessary to obtain professional advice in order to ensure that the clauses in the employment agreement remain enforceable, so that the employer’s interests can be protected.
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