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Terminating an Employment Contract

Terminating an Employment Contract

Terminating an Employment Contract

1. Can the parties terminate the contract before the expiry of the contract period?

Yes. Either party may terminate the contract by giving the other party one month’s written notice or one month’s wages in lieu of notice.

2.What should the parties do when the contract is terminated or expires?

a. Employer:

● Should settle all outstanding wages and other payments due, preferably by depositing the money into the helper’s account and taking back a receipt.

● Must notify the Foreign Domestic Helpers Section of the Immigration Department in writing of the termination within 7 days of the termination date, but there is no need to inform the Labour Department.

b. Helper:

● Should settle any outstanding payments with the employer and ensure receipt of all monies before signing any receipt.

● Must notify the Foreign Domestic Helpers Section of the Immigration Department in writing of the termination within 7 days of the termination date, but there is no need to inform the Labour Department.

3.Can the parties terminate the contract without giving notice or payment in lieu?

a. Employer: An employer may summarily dismiss a helper without notice or payment in lieu if the helper:

● Intentionally disobeys a lawful and reasonable order;

● misconducts himself/herself;

● is guilty of fraud or dishonesty;

● or is habitually neglectful in his/her duties.

b. Helper: A helper may also terminate the contract without giving notice or payment

in lieu if:

● he/she reasonably fears physical danger or disease;

● is abused by the employer;

● or has been employed for not less than 5 years and produces a medical certificate stating permanent unfitness for the current work.

4.What should I consider before summarily dismissing a helper?

a. Summary dismissal often arises from disagreements between employers and helpers. In heated arguments, things can get exaggerated and either party may feel justified in summarily dismissing the other or treating the contract as terminated. But such views are often wrong. Also, there are usually no  independent witnesses in a household to reconstruct disputed events and judge whether the actions taken were reasonable.

b. The best way to resolve disputes is for both parties to talk it out directly. When views differ, be accommodating and tolerant of each other. Many problems can be resolved without drastic action.

c. The law only allows summary dismissal in exceptional cases. Be sure there are sufficient grounds before doing so, otherwise claims are likely from the other side.

5.What should I do if the helper leaves without notice or payment in lieu? Or what should the helper do if dismissed without notice or payment in lieu?

a. If you feel the other party has unilaterally terminated the contract, inform the Foreign Domestic Helpers Section of the Immigration Department. If the helper has absconded, consider reporting to the police.

b. If you feel there were no grounds for termination without notice and wish to claim in lieu of notice, approach the Labour Relations Division of the Labour Department as soon as possible. They will conciliate the dispute.

c. You can of course choose to waive your right to require proper notice from the other party.

6.What payments should I make to the helper when the contract is terminated or expires?

Payments to a helper on termination or expiry depend on factors like period of employment and reason for termination. But they generally include:

a. Any outstanding wages;

b. Payment in lieu of notice, if applicable;

c. Wages in lieu of any untaken annual leave, plus pro rata annual leave pay for that leave year;

d. Long service payment or severance payment, if applicable;

e. Other sums payable under the contract e.g. provisions for return passage and food/transport allowances.

You should keep receipts for payments made.